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The Influence of Virtual Product Presentations on Consumers Purchase Intention

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Master Thesis

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Vrije Universiteit Amsterdam (VU)

This study examines the effect of virtual product presentations on consumers attitudes and purchase intentions, which is an interesting field to study since the world of online shopping is extending rapidly.

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Type Scriptie
Begeleider(s) Alexander schouten & sarah van der land
Jaar 2011

online purchase intention
presence
dimensionality
risk
attractiveness
attitude
virtual worlds
virtual interactivity
flatscreen tv
philips ambilight

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VU UNIVERSITY AMSTERDAM
FACULTY OF ECONOMICS AND BUSINESS ADMINISTRATION

The influence of virtual product
presentations on consumers’ purchase
intention

December 13th, 2010

Master Thesis
Martijn Scheen (1808524), Vrije Universiteit Amsterdam

Written under supervision of dr. A. Schouten and drs. S. van der Land

Abstract

This study examines the effect of virtual product presentations on consumer’s attitudes and purchase
intentions, which is an interesting field to study since the world of online shopping is extending rapidly. An
experiment is conducted amongst 89 participants in which the effect of richness of product presentation (2D
vs. 3D vs. 3D immersive) on purchase intentions was investigated, mediated by perceived virtual
interactivity, presence, attractiveness, online risk, and attitude towards the product. The research showed that
3D product presentations resulted in more purchase intensions (i.e. by creating more presence, more
interaction, more product attraction, and a better attitude towards the product) and thereby provides evidence
that virtual presentations are an exemplary tool to enhance the virtual experience. In short, this study
provides an empirical exploration of presentational modes in an online setting, and found evidence that more
virtual presence will lead to higher purchase intentions.

Keywords: Online Purchase Intention, Presence, Dimensionality, Risk, Attractiveness, Attitude, Virtual
Worlds, Virtual Interactivity, Flatscreen TV, Philips Ambilight

, The influence of virtual product presentations on consumers’ purchase intention

Table of content
1. Introduction ...................................................................................................................................2

2. Theory & Hypotheses .....................................................................................................................6

2.1 Theory............................................................................................................................................ 6

2.2 Hypotheses .................................................................................................................................... 8

2.3 Theoretical Model ....................................................................................................................... 12

3. Methodology ................................................................................................................................13

3.1 Participants .................................................................................................................................. 13

3.2 Experimental design .................................................................................................................... 13

3.3 Procedure .................................................................................................................................... 15

3.4 Task .............................................................................................................................................. 15

3.5 Measures ..................................................................................................................................... 16

4. Results ..........................................................................................................................................18

4.1 Pre-testing ................................................................................................................................... 18

4.2 Testing the model ........................................................................................................................ 20

4.3 Final research model ................................................................................................................... 25

5. Discussion.....................................................................................................................................26

5.1 Key Insights & Implications.......................................................................................................... 26

5.2 Limitations and suggestions for future research......................................................................... 29

References .......................................................................................................................................31

Appendix A - Conditions ...................................................................................................................35

Appendix B – Measurement items ...................................................................................................37

Appendix C – Task description .........................................................................................................39

Master Thesis Martijn Scheen 13-12-2010 1

, The influence of virtual product presentations on consumers’ purchase intention

1. Introduction
The popularity of online shopping is increasing rapidly (NTIA, 2002). According to
Eroglu, Machleit and Davis (2001) this growth is due to the fact consumers are more familiar
with online environments and realize the benefits of online shopping. However, many
websites still fail to reaching the target audience they desire. Kearney (2001) found that more
than eighty percent of online shoppers (82%) leave the purchasing process before the
transaction is completed. Several studies argue that these failures are the result of neglected
consumer needs (Nielsen, 2000; Rosen and Purinton, 2004). In terms of consumer needs, most
websites lack a full customer experience (Richard, 2005). In this era, buying online is much
more than searching for the right product offerings or information (Hausman and Siekpe,
2009). As studies by Constantinides (2004), Jin (2009) and Hausman & Siekpe (2009) argue,
online shopping pertains more to being stimulated by all kinds of new virtual factors, like
three- dimensional surroundings, virtual employees or the increased virtual interactivity.
Nowadays, Web-based environments allow online retailers to present their products in a
variety of formats. Online retailers can choose from simple pictures and videos to three-
dimensional product designs and interactive environments where customers can interact with
the product and learn how the product works. Most interfaces for accessing Web content
employ two-dimensional techniques to present their offerings, while there is a promise in
developing richer environments with three-dimensional interactivity and visualization
capabilities (Hausman & Siekpe, 2009).

Three-dimensional online product presentations are suggested as an extension of traditional
(direct- and indirect) consumer experiences (Heeter, 2000). Li, Daugherty, and Biocca (2001)
conceptualized this challenging development of consumer experience and termed it ‘virtual
experience’. They defined it as “psychological and emotional states that consumers undergo
while interacting with products in a 3-D environment” (p. 1). Additionally, product purchases
are in many ways not the purchase of a physical good itself but of an experience that the
product affords (Pine & Gilmore, 1998). For example, when someone would like to purchase
a boat, he or she is not only interested in the physical characteristics of the product, but also
the perceived non-tangible benefits out of boating experiences such as freedom, a symbol of
status, or a stage for family outings. With the experience affordance in mind, it is interesting
to go further in dept on online product presentations and the virtual experiences they arouse.

Therefore, to enhance richer consumption of experiences the online environment needs to
create a sense of ‘presence’ in which the customer perceives the experience of actually ‘being

Master Thesis Martijn Scheen 13-12-2010 2

, The influence of virtual product presentations on consumers’ purchase intention

there’. Presence is also known in literature as ‘Sense Data’, which are mind-dependent objects
that we are directly aware of in perception, whose existence and properties are known directly
to us (Bion, 1962). In other words, the visual experience can be different from a person’s
previous experiences with a certain product. Presence, created by online surroundings, can be
defined as the feeling of perception represented by online objects, whose properties give us
the feeling of ‘real’ experience (Walsh and Pawlowski, 2002). The more presence the
consumer experiences in an online environment, the more he or she feels converged with the
online environment as if he or she is ‘navigating’ through the real world. Therefore, more
‘real’ and detailed product information is an essential part to the success of e-commerce. In
general, the consumer wants to access all information available that might be necessary for
evaluating a product and to make informed product choices (O’Keefe & McEachern, 1998).

Next to presence, ‘virtual interactivity’ of Web applications also allows online retailers to
enhance Web experiences by presenting more personalized services to customers and
facilitating interaction with the product (Constantinides, 2004). Accordingly, Jin (2009)
investigated the level of perceived interactivity in Web pages and stated that “a key feature
distinguishing 3D virtual worlds from standard Web pages is the increased ‘interactivity’ in
presenting multi-model product information” (p. 235). Together, presence and interactivity
may explain why 3D product presentations affect customers purchase intentions.

To date, scholars have examined the impact of information presentation modes on online
shopping (Chau & Tam, 2000), the effect of the product presentation on mood, perceived risk
and purchase intention (Park, Lennon & Stoel, 2005), and the influence of the functional
mechanisms of online product presentations (Jiang & Benbasat, 2007). Other research has
investigated the effectiveness of interactive advertising by measuring attitudes, behaviors and
cognitive and affective responses (Pavlou & Stewart, 2000). However, the influence of
different product presentations on presence and purchase intention has been overlooked.
Simple two-dimensional product presentations may not stimulate someone to buy online
rather than offline, but what happens when consumers are able to see the product in three-
dimensions and are able to interact with the product, remains unclear.

Park, Lennon and Stoel (2005) stated in their research that, “there is a strong need to
develop better visual product presentations online that may give some sense of fit and other
tactile experience to reduce perceived risk and create pleasurable shopping experiences” (p.
1). When visiting an online store, the product has to trigger consumers in many ways to get
their attention. Additionally, other online stores are only one click away. However, newer

Master Thesis Martijn Scheen 13-12-2010 3

, The influence of virtual product presentations on consumers’ purchase intention

forms of product presentations are increasingly employed. “With the increase in online traffic
and sales, many e-commerce merchants are turning to three-dimensional product/
environmental presentations to stand out in such a competitive environment and to provide
consumers with greater sensory experience” (Nash 2000, p. 2).

However, exactly how these presentational modes affect perceived presence and
interactivity, and how these in turn affect someone’s attitude and perceptions about a
particular product, has not been studied before. Previous research on virtual presentation
modes tends to focus on technical processes, such as sensory capabilities, information
visualizations, and spatial memory (Neches et al., 1991; Hendriks, 1999; Risden, Czerwinski,
Muzner & Cook, 2000; Cockburn & McKenzie, 2002), whereas little empirical research has
focused on presence and interactivity within product presentation modes. Furthermore,
previous studies on virtual presentations tend to lack a theoretical rationale for how concepts
such as presence and virtual interactivity may influence a consumers’ purchase intention and
may differ throughout product presentations (Cooper, 1994; Nash, 2000; Freemantle, 2002;
Carr, 2004). For instance, by adding more ‘real’ attributes to an online environment people
may feel less at risk when buying something from a website or may perceive the product to be
more attractive.

This study contributes to the field of online shopping by providing an empirical
exploration of product presentation modes, and by combining both technological (i.e.
presence and virtual interactivity) and social attributes (i.e. risk, attractiveness, and attitude)
as theoretical basis to explain how online product presentations affect purchase intention.
Thereby, the online presentational modes will be theorized on a continuum (i.e. from a two-
dimension presentation at one end, to an interactive three-dimensional presentation at the
other end of the spectrum), in which a two-dimensional (begin-), three-dimensional (middle-),
and three- dimensional interactive environment (end of spectrum) will be examined. The goal
of this study is to investigate how virtual product presentations may affect purchase intention
through presence and interactivity, perceived risk, attractiveness, and attitude. An empirical
investigation of the value of online product presentations within different buying modes is not
only scientifically relevant, since it adds to the scarce knowledge on presence within those
modes, but also serves a practical purpose in that it identifies the processes through which
virtual product presentations influence purchase intentions, and provides management with
guidelines on how to use derivative optimum value from these presentational modes. The
research question which derives can be noted as follows:

Master Thesis Martijn Scheen 13-12-2010 4

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