We will kick off a new blog series about virtual reality (VR) with two posts about VR as a potential tool along the customer journey. Additionally, we will publish two posts regarding studies, which examined VR as a tool in user research, which we have already started to report on in this post.
The concept of “try before you buy” is widely popular to reduce uncertainties for consumers before the purchase of a product and to provide support in the purchase decision. When buying goods in real-life stores, customers are able to actually touch and test the products which aids them in evaluating the product quality before buying. This sales concept can be implemented in many online stores as well, as customers are given a specified test period without having to pay for the product immediately (Allen, 2016; Avampato, 2018). However, applying this sales approach to the tourism industry is practically impossible due to the immateriality of the product. In fact, customers have to make a decision based on the available information, provided on the internet, for instance. Yet, they only find out upon arrival at the destination whether the booked service actually meets their expectations (Bruhn & Hadwich, 2004; Hartmann, 2018). Hence, from the consumer’s perspective, this results in a perceived purchase risk, as booking a vacation trip is usually associated with a certain degree of uncertainty (Bär, 2006; Syrek et al., 2017). Virtual reality (VR) can aid consumers during the decision process and minimizes this purchase risk as it presents the destination in a virtual world and gives the customer an active role to discover it.
Research goal
The main goal of this research was to investigate the usage of VR and the resulting impact on the consumers’ behavior within the tourism industry. Specifically, the factors movement radius (high or low) and voice assistant (present or not present) were examined throughout this study. In this case, a high movement radius expresses that the participant can move completely freely by teleportation in the VR environment, while a low movement radius means, that only a 360° rotation is possible for the participant. Using a human, female voice, the voice assistant was specifically created for this experiment and supposably provides additional security throughout the buying process to the customer.
Study overview
An experiment was conducted whereas each participant was allocated to one of four different scenarios/ groups which represent the two factors movement radius (high or low) and voice assistant (present or not present). Respondents were given the following scenario: while researching suitable accommodation for their next vacation, they decided to utilize a provider which made it possible to discover the accommodation before the booking via VR. The shown VR accommodation was a vacation apartment in Bali.
Data was then collected via an online questionnaire. The final data set included 153 participants, of which more than half (58%) were female and whose mean age was 20 years, with 17- and 18-year-olds representing the majority. Most of the respondents were college (44%) or high school students (54%) which explains the rather low income level. Yet, approximately 54% of participants reported to go on vacation at least once or twice per year. Besides, 43 % of respondents have had experiences with VR glasses before the study.
Main findings
Dependent variable: perceived risk
- The study showed a significant effect of the (high) movement radius towards (low) perceived risk, whereas the perceived control moderates this relationship, meaning that high perceived control strengthens the impact of the movement radius on the perceived risk.
- The voice assistant did not have an effect on perceived risk, potentially due to the limited provided information and interaction between the assistant and the user, or possible confusion about it.
Dependent variable: escape experience
- The movement radius did not have an effect on the escape experience, meaning that users forget about the real world, likely due to the short time in the experiment as well as limited possible surprises and size of the virtual vacation scenario.
- The voice assistant did not have an impact on the escape experience either, possibly because of the choice of voice for the assistant or overstimulation for the mainly unexperienced VR users.
General findings
- The movement radius has a positive impact on the sense of presence, i.e. the feeling of actually being in the virtual environment.
- The study confirmed that a high escape experience led to a higher booking intention, but the higher the perceived risk, the lower the booking intention.
Conclusion
This research examined the impact of using VR with consumers in the tourism industry by simulating a vacation booking. The study confirmed that the evaluation of the destination quality can be improved by using VR. Indeed, the fear of making a wrong decision during the booking process can be minimized through VR as customers gain a realistic idea about what to expect at the destination. Furthermore, this study presented evidence, that the perceived control not only impacts consumer behavior in real-life, but in virtual scenarios as well. Ultimately, providing VR in the booking process and the resulting quality assurance can aid companies in the tourism industry to gain a competitive advantage. In fact, this study verified that travel agencies should not limit the customers’ booking process to 360° videos of accommodation options, as the resulting active role of the user in a VR setting decreases the perceived risk. Especially stationary travel agencies should consider offering customers a VR booking option, as most consumers do not own VR technology privately (Deloitte, 2018) which then presents an advantage over online agencies.
In our next post, we will highlight another case of VR providing added value to cross-channel customers. In this case, VR becomes an additional step in the customer journey of shopping for clothes which may increase the customer’s interest in visiting the physical store. VR can, thus, highlight the advantages of visiting real store compared to a mere online shopping experience.
References
Allen, R. (2016). 5 digital marketing trends transforming the travel industry. https://www.smartinsights.com/digital-marketing-platforms/big-datadigital-marketing-platforms/digital-trends-transforming-travel-industry. Last access: 22.11.20
Avampato, C. (2018). 5 online stores that let you try before you buy. https://www.wisebread.com/5-online-stores-that-let-you-try-before-you-buy. Last access: 22.11.2018.
Bär, S. (2006). Ganzheitliches Tourismus-Marketing: Die Gestaltung regionaler Kooperationsbeziehungen (1st edition). Wiesbaden: Deutscher Universitäts-Verlag/GWV Fachverlage.
Bruhn, M. & Hadwich, K. (2004). Qualitätswahrnehmung und Qualitätszeichen bei touristischen Dienstleistungen. In K. Weiermair, & B. Pikkemaat (Hrsg.), Qualitätszeichen im Tourismus. Vermarktung und Wahrnehmung von Leistungen (S. 5-19). Berlin: Erich Schmidt Verlag.
Deloitte Touche Tohmatsu Limited (2018). The Reality about Virtual and Augmented Reality: An Immersive customer Perspective. https://www2.deloitte.com/content/dam/Deloitte/de/Documents/technolog y-media-telecommunications/TMT_Virtual_Reality_Deloitte_Cebit_2018.pdf, Last accessed: 16.03.2019.
Hartmann, R. (2018). Marketing in Tourismus und Freizeit (2nd edition). München: UVK Verlag.
Syrek, C., De Bloom, J., Burkardt, S. & Rehberg, J. (2017). Zutaten für eine gute Erholung im Urlaub. In M. Brohm-Badry, C. Peifer & J. M. Greve (Hrsg.), Positiv-Psychologische Forschung im deutschsprachigen Raum–State of the Art (S. 54-73). Lengerich: Pabst Sience Publishers.
