Journal of Research in Interactive Marketing

Home sweet virtual home: The use of virtual and augmented reality technologies
in high involvement purchase decisions
Debika Sihi,
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JRIM
12,4
398
Received 30 January 2018
Revised 15 May 2018
Accepted 21 August 2018
Downloaded by University of Otago At 03:31 17 December 2018 (PT)
Journal of Research in Interactive
Marketing
Vol. 12 No. 4, 2018
pp. 398-417
© Emerald Publishing Limited
2040-7122
DOI 10.1108/JRIM-01-2018-0019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2040-7122.htm
Home sweet virtual home
The use of virtual and augmented
reality technologies in high involvement
purchase decisions
Debika Sihi
Department of Economics and Business,
Southwestern University, Georgetown, Texas, USA
Abstract
Purpose – Digital technologies have made it possible for organizations to enhance service delivery and
provide consumers a way to experience a product or service before even seeing it in person. Prior work has
validated consumer purchase decision-making models like the Engel, Kollat and Blackwell (EKB) model in
digital and multi-channel purchase environments. This research aims to explore the various impacts of digital
technologies, specifically virtual reality (VR) and augmented reality (AR) features, on the different stages of
the EKB model in a high involvement purchase decision context. In addition, the use of such technologies is
examined as a competitive advantage for sales agents.
Design/methodology/approach – An in-depth market analysis of VR and AR technologies related to
residential real estate is conducted. Then the research questions are analyzed through detailed feedback
gathered from 33 prospective home-buyers and realtors in the USA.
Findings – Insights from buyers and sales agents (realtors in the context of this research) suggest that VR
and AR technologies can enhance consumer information search and expedite the time consumers spend
evaluating purchase alternatives. As these technologies advance in their customization features, they may
also increase the conversion between alternative evaluation and purchase, but only if they are realistic and
provide high quality experiences. Finally, digital technologies are viewed as becoming a necessity in high
involvement sales contexts, suggesting that additional features or innovative ways to use these technologies
may serve as sources of competitive advantage for sales agents.
Originality/value – This is one of the first research studies to explore the perceived impacts of VR and AR
technologies on the stages of the EKB model consumer decision model. It builds on prior work and offers
direction for future research.
Keywords Interactivity, Decision-making, Virtual marketing, Digitalizations, Real estate marketing
Paper type Research paper
1. Introduction
Digital technologies like virtual reality (VR) and augmented reality (AR) have impacted
consumer decision-making as it relates to purchase decisions. VR involves the creation of
virtual elements through computer graphics and other visual elements (Lister et al., 2008).
Users are immersed into a virtual space which is a separate reality from physical reality.
This could be the use of a virtual clothing trial in an online purchase (Kim and Forsythe,
2008). AR embeds VR into physical reality (Javornik, 2016). An example of this is using a
smartphone to scan a brand logo in a magazine to trigger a video about a product on a
consumer’s phone (Javornik, 2014). Location-based games involving AR like Pokémon GO
can be used to enhance the brand image of the sponsors featured in the games (Wu and
Stilwell, 2017). These technologies have also enhanced service delivery in contexts like
tourism (Huang et al., 2016) where the purchase decision often includes a sales agent who is
 integral in the decision-making process. Consumers can be virtually transported to travel Virtual and
destinations when deciding which vacation to take or destination to visit. Providing the augmented
consumer a more vivid understanding of a product or experience may impact different stages
reality
of the consumer search process and have implications for the sales agent. This research
explores the use of VR and AR technologies in a high involvement purchase context in which technologies
a sales agent generally has an important role in the decision-making process.
Digital technologies have transformed the consumer experience in a number of industries
including financial services (Stone and Laughlin, 2016), tourism (Huang et al., 2016) and
399
healthcare (Zahedi et al., 2016). Consumer decisions are now made in an increasingly social
and participatory purchase culture (Ashman et al., 2015), in multi-channel (both offline and
online) environments (Wolny and Charoensuksai, 2014) and even within virtual worlds
(Second Life) (Animesh et al., 2011; Mäntymäki and Salo, 2015). Given this rapidly evolving
consumer context, Kannan and Li (2017, p. 31) call for more research to understand the
impacts of digital technologies on consumers’ search and purchase behaviors and the roles
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of these technologies as competitive assets for firms (2017, p. 39). This research extends the
existing literature and answers this call by examining the impacts of VR and AR
technologies in a high involvement purchase context requiring the assistance of a sales
agent. Involvement can be characterized by whether it is enduring or situational (Houston
and Rothschild, 1977), emotional or non-emotional (Vaughn, 1980) and personal in nature
(Sherif and Cantril, 1947). The high involvement purchase context examined in this research
is enduring, emotional and personal in nature. The purchase process is analyzed from both
consumers’ and sales agents’ perspectives to gain a deeper understanding about the
different ways VR and AR technologies affect the purchase process.
In addition, advances in digital technologies have generated ecosystems of companies
which work in synergy with each other, as all the technical expertise may not reside in one
organization. For example, a digital marketing ecosystem may consist of data brokers,
market agencies, analytics consultants and other partners (Stone, 2014). The technologies
provided by these partners may be leveraged by organizations as sources of competitive
advantage. Thus, this project examines how VR and AR technologies can benefit companies
(Kannan and Li, 2017, p. 39). Specifically, this research explores whether the use of digital
technologies may serve as a source of competitive advantage for sales agents on the sales
side of a high involvement purchase decision.
This work offers implications for managers, across industries, to understand how digital
technologies may be used to enhance their own service delivery. In addition, it addresses the
changing role of a sales agent with the advent of technologies which enable the consumer to
be a more proactive and informed decision-maker. The research questions are examined in
the home-buying context, a high involvement consumer purchase decision typically
involving the use of a real estate agent (realtor). The VR and AR technologies currently
available in this industry are analyzed and described. Data are collected from prospective
home-buyers in an active residential real estate market and from realtors in high demand
housing markets across the United States of America (USA).
Section 2 provides an overview of research related to consumer decision-making,
including the impact of digital technologies. The scope of this project within that work is
provided, and specific research questions are posed. A detailed discussion of the research
context and research approach used to answer the questions are provided in Section 3. The
analysis and results are described in Section 4. Next, the theoretical and managerial
implications of the project are offered in Section 5. The paper concludes with a discussion of
the limitations of this work and areas for future research in Section 6.
 JRIM 2. Literature review
12,4 2.1 Consumer decision-making and digital technologies
There are a number of models for consumer decision-making, including the Nicosia model
(Nicosia, 1966), the Engel, Kollat and Blackwell (EKB) model (Engel et al., 1968), the Howard
and Sheth model (Howard and Sheth, 1969) and the McCarthy, Perreault and Quester model
(McCarthy et al., 1997). The Nicosia model is one of the earliest models of consumer decision-
400 making in a purchase context and can be divided into four stages: information provided by
an organization to a consumer, use of the information by the consumer to form preferences
and attitudes, a purchase decision and then feedback about the purchase (Nicosia, 1966). The
five-stage EKB model expanded on this by separating out motivation, information search
and alternative evaluation into three stages and accounting for partial decision-making. The
Howard and Sheth model includes perceptual and learning constructs in the decision-making
model; however, its framework has been criticized for being overly complex (Olshavsky and
Granbois, 1979). Finally, the McCarthy, Perreault, and Quester model builds on the EKB
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Model by integrating choice into the evaluation stage (Milner and Rosenstreich, 2013).
The EKB and the McCarthy, Perreault and Quester Models have been criticized for the
linear depiction of the decision process and having a market (versus consumer) focused view
(Phillips and Bradshaw, 1993). However prior research suggests (Ashman et al., 2015) that
the five-stage EKB model, outlined in Figure 1, is still considered highly applicable to
consumer purchase decisions. In addition, the five stages account for information search and
alternative evaluation in a way that mirror high involvement purchase decisions.
Further, the use of the model has been applied in online contexts (Darley et al., 2010; Punj,
2012) and multi-channel decision-making contexts (Wolny and Charoensuksai, 2014). The
use of the model is also substantiated in an increasingly participatory (Ashman et al., 2015)
digital culture in which social influence may impact different stages of the consumer
decision-making process.
This research extends the current literature by examining the various ways digital
technologies, specifically VR and AR, are perceived by consumers and sales agents to

Figure 1.
EKB consumer
decision model
 impact the different stages of the EKB model. These technologies enable consumers to move Virtual and
beyond simply gathering more information about a product or service to experiencing augmented
elements of the product/service. Through media richness and high interactivity, VR allows
the experience of telepresence or experiencing an environment through digital means (Klein,
reality
2003). In a tourism context, use of VR experiences such as 360-degree videos results in technologies
greater likelihood of consumers wanting to visit a destination (Gibson and O’Rawe, 2018).
Suh and Lee (2005) find that VR interfaces increase consumers’ actual and perceived product
knowledge. 401
The use of AR technologies in a purchase context provide consumers the ability to
digitally project items like clothing and jewelry on themselves or to visualize how furniture
or other objects would look in a given space. These realistic and personalized (Javornik,
2016) digital experiences have increased customer satisfaction in the purchase process
(Pantano, 2015) by providing a fun, interactive way to examine different products a
consumer is considering for purchase.
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This research builds on such findings which have established impacts of VR and AR
technologies on consumer learning, satisfaction and consumption intent. Specifically, the
first objective of this project is to more deeply examine the ways VR and AR technologies
impact different stages of the consumer decision-making process. Because VR experiences
allow consumers to obtain greater product knowledge (Suh and Lee, 2005), it is plausible
that this enhanced experience reduces that amount of additional information that a
consumer seeks in a purchase decision, shortening the information search stage.
Furthermore, use of AR (e.g. in a clothing trial or AR staging features in real estate) may
help a consumer narrow down their consideration set, reducing the time spent in evaluating
alternative products. Because the goal of this research is to explore the different ways VR
and AR technologies impact consumers’ decision-making, research questions rather than
directional hypotheses are posed. Understanding the various ways the technologies impact
the decision-making process also uncovers the specific stages affected in the process:

RQ1. In what ways do digital technologies, specifically VR and AR technologies, impact

different stages of a high involvement consumer decision-making process?

2.2. Digital technologies as a source of competitive advantage

The second objective of this research is to examine whether digital technologies can be
leveraged as a competitive asset and source of differentiation for sales agents. Often digital
disruption is viewed as a source of obsolescence for existing processes and roles. For
example, automation has changed the way that vehicles are manufactured and replaced
many roles on the automobile factory line (Acemoglu and Restrepo, 2017). However, it is
possible that digital technologies can be used as a strategic asset and a source of
differentiation rather than a replacement of a sales agent. Specifically, this research explores
the role of sales agents in a high involvement decision-making context such as the role of a
financial advisor, travel agent, healthcare provider or realtor. In such high involvement
contexts, digital technologies provide tools that can be used to enhance service delivery
rather than diminish the role of the sales agent. For example, in healthcare, digitization can
offer a more personalized service delivery experience for patients (Rosenbaum et al., 2017).
In travel, virtual vacations may allow a travel agent to not only expedite the sales process
but also provide a customer a vacation more in line with their expectations as formed
through the virtual vacation. AR technologies have been used by real estate agents to
enhance classified advertisements (de Macedo et al., 2014) and real estate search functions.
In addition, a growing number of technologies are being developed related to interior design
 JRIM and planning (Lang and Sittler, 2012). Further, in markets where there may be a substantial
12,4 supply of sales agents, digital technologies may be a point of differentiation in attracting
potential customers (Huang et al., 2016). Therefore, RQ2 is posed:

RQ2. In what ways do digital technologies, specifically VR and AR technologies, serve

as a source of competitive advantage for sales agents?
402 The following section provides an overview of the research context and related digital
technologies. Then the research methodology is described including a detailed description of
the data and analysis.

3. Methodology
3.1 Context and market research
First, a context was selected in which consumers make high involvement purchase decisions
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with the aid of a sales agent. Home-buying is a highly involved purchase decision for
buyers. In addition to the large associated cost with the purchase, it is a decision which can
have significant impacts on a buyer’s life including his/her commute to work, potential
family impacts like school district access, and even access to healthcare providers and other
services. Thus, the purchase process for a home-buyer is typically a lengthy process
involving the services of a realtor, visits to multiple homes and then a thorough evaluation
of the buyer’s needs, wants and finances. Online listings and tours have made the process
more expedient by allowing a buyer to narrow down his/her consideration set at the
convenience of a few mouse clicks or scrolls on a smartphone. VR and AR technologies have
the capabilities to enhance the purchase process even further.
An analysis of current VR and AR technologies was conducted to understand the
capabilities as they apply to the residential real estate market. VR technologies allow a user
to be immersed into a virtual space (Lister et al., 2008) or home in this context. Matterport,
founded in 2011, in Sunnyvale, California, is one of the leaders in immersive media
technologies in the real estate domain. Matterport offers technologies that allow three-
dimensional virtual walkthroughs for home-buyers and provide a “dimensionally accurate
model of a space exactly how the human eye would see it” (Athwal, 2017). Residential real
estate companies like Redfin are already utilizing Matterport’s 3-D tours. The virtual tours
can be accessed through VR headsets like the Samsung Gear VR, shown in Figure 2, which
are utilized by Sotheby’s International Realty (Gaudiosi, 2015). These headsets are worn by
individuals over their eyes and the top of their faces (attached by a strap) so they can be
completely immersed in a virtual home.
Realtors affiliated with Sotheby’s use VR gear for virtual tours in cities like Los Angeles
where traffic is so congested that visiting multiple houses can take days. The VR tours offer
a huge time convenience for both the buyers and realtors. They also make it possible for
buyers to more easily tour homes in different geographic locations. Smaller companies like
Walkthrough, based out of Denver, Colorado, also offer realtors packages which include
high-quality photographs and a 3-D home tour (Karolyi, 2017). Currently, the photographs
drive most of the company’s revenue; however, in the future the emphasis is likely to shift
toward VR walkthroughs.
VR walkthroughs are also making it possible for home-owners to visualize houses in
development or still under construction, providing a more immersive alternative to a model
home or rendering (Bonislawski, 2017). Virtual experience allows both investors and buyers
to have full walkthrough experiences before construction has even started (Athwal, 2017).
Finally, technologies like roOomy use both VR and AR technologies so home-buyers can
experience how a room or space would look with customized furniture and colors. AR
 Virtual and
augmented
reality
technologies

403
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Figure 2.
VR headset

technologies introduce a virtual element into a physical environment (Javornik, 2016). This
allows a buyer to experience a physical empty space with virtual furnishings from an
application on their phone, as shown in Figure 3.
The buyer can imagine what it may be like to actually decorate and live in the space.
Overall, the current digital technologies provide buyers the ability to:
(1) walk through and explore a house as if they were taking a physical tour;
(2) imagine a home still under construction; and
(3) view an empty space staged with furniture.

To explore the research questions, insights about these three features were gathered from
both prospective home-buyers and realtors.

3.2 Research approach and key informants

Qualitative research was used to address the research questions because it allowed buyers
and sales agents (realtors) to provide descriptive details and opinions about the impacts of
 JRIM
12,4

404
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Figure 3.
AR phone application
for virtual staging

VR and AR technologies on the purchase decision process (Saunders et al., 2009). Detailed
insights were gathered from 20 participants across two home-buyers’ education classes in
Austin, Texas, USA. Responses were gathered during the class when the participants were
involved in discussions about home purchases. Participants in a home-buying class were
selected because they are actually in the midst of the home-buying process and reflect a
purposeful sample (Silverman, 2010). They are able to offer more realistic assessments of
digital technologies in the home-buying process compared to an individual asked to imagine
the context. In addition, individuals in this class had already recognized a need (the
purchase of a home), which is the first stage in the EKB model (Engel et al., 1968). Austin,
Texas was selected as the location for the home-buying class because of its highly
competitive real estate market (PwC and Urban Land Institute, 2016), in which the home
purchase process is likely to be a very high involvement decision (e.g. require multiple bids
and negotiation) and requires the aid of a realtor. The participants were in various stages of
the home purchase process: less than 1 month of searching (six buyers), 1-3 months of
searching (six buyers), 4-6 months of searching (three buyers), 7-9 months of searching (one
buyer), 10-12 months of searching (one buyer), and in the closing process of purchase (three
buyers). Twelve of the 20 home-buyers were purchasing the home jointly with a spouse or
partner, and 8 were purchasing a home individually. For 11 of the buyers, this was their first
home purchase.
Insights were also gathered from realtors to understand their perspectives on the
impact of VR and AR technologies on the consumer home-buying process. Feedback was
obtained from 13 realtors in highly competitive real estate markets across the USA as
rated by PwC and Urban Land Institute (2016) and Realtor.com (2017). The realtors were
 located in Austin, Texas (four realtors); Boston, Massachusetts (three realtors); Virtual and
Columbus, Ohio (one realtor); Colorado Springs, Colorado (one realtor); Fort Wayne, augmented
Indiana (two realtors); Forth Worth, Texas (one realtor); and San Jose, California (one
realtor). Their tenure working in residential real estate varied: 1-3 years working in
reality
residential real estate (one realtor), 4-6 years working in residential real estate (two technologies
realtors), 7-9 years working in residential real estate (two realtors), 10-12 years working
in residential real estate (three realtors), and over 12 years of experience (five realtors).
Due to the realtors’ hectic schedules, insights were gathered over email so they could
405
respond in between home showings or in the evening after work.
The prospective home-buyers and realtors were asked a combination of rating and
open-ended questions about the three main ways VR and AR technologies are used in
residential real estate, as identified through the market analysis in Section 3.1. The
questions focused on whether such technologies would be used, when in the purchase
process they would be used, and whether they would impact the speed of the home-
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buying process to assess implications on the EKB model. Open-ended questions allowed
for detailed explanations that reflected opinions, attitudes and concerns. The rating
questions were used as another way to assess patterns in the responses. The questions
were pre-tested with five individuals going through the home-buying process (buyers)
and five realtors. The pre-test buyers and realtors provided feedback on the clarity of the
questions and their understanding of the questions. The questions were refined based on
this feedback and are provided in the Appendix. Before answering any of the questions,
the buyers and realtors were provided detailed explanations about VR and AR
technologies and encouraged to ask questions if they had trouble understanding the
technologies they were asked to evaluate. Only two home-buyers stated any confusion
about the technologies and declined to participate.
To address RQ1, the home-buyers and realtors were asked to rate the usefulness of a VR
tour of a built home, a VR tour of a home not yet built or under construction and the ability
to customize a home with VR/AR accents like furniture. The home-buyers and realtors were
also asked to explain:
 if and how they would use these three technologies;
 when they would use these technologies in the purchase process; and
 provide their assessments about whether these technologies would impact the speed
of the search process.

If they did not think these features would be useful or utilized, they were asked to provide an
explanation for this evaluation.
RQ2 was examined by asking homebuyers how likely they would be to select a realtor
who offered virtual tours of built homes, homes in development and virtual staging
compared to another realtor who did not offer these features but was the same in every other
way. Realtors were also asked the same questions as they offered perspectives of sales
agents in the purchase process. In addition, they were asked whether they utilized any VR/
AR technologies in their home selling process to gain a better understanding of the current
technological landscape in the residential real estate market.

4. Analysis and results

4.1 Impact of VR and AR technologies on purchase decision process
The responses of the home-buyers are analyzed first. Eighteen of the 20 home-buyers in the
sample strongly or very strongly agreed that VR tours of built homes were useful. The
 JRIM home-buyers explained how time-intensive the home-buying process is and that VR tours of
12,4 built homes could help them decide whether to actually go visit a house in person. It also
helped them to decide between different homes. The buyers mentioned that these tours
would be helpful for potential buyers with children or individuals relocating to a new city
who may not be able to easily tour a home in person. Seventeen of the home-buyers believed
the VR technologies of built homes would make the home purchase process much faster or
406 very much faster. They mentioned that such technologies would allow them to engage in
home searches during free time at work and save them time spent in traffic visiting homes
that may not be worth visiting.
Buyers also viewed VR tours of homes in development or under construction as a
useful enhancement to floor plans and model homes. This feature allowed them to
more easily compare unbuilt homes with built homes. Sixteen of the buyers strongly or
very strongly agreed this feature was useful, but only 12 believed the VR tours of
homes in development would make the actual purchase process much faster or very
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much faster. Their comments suggested VR tours of homes in development were most
helpful in the information search aspect of the purchase decision. However, they were
less useful in narrowing down alternatives because for homes in construction, buyers
still wanted to see all the finished builds. There was greater uncertainty about how
well the VR tour reflected the final products. The responses regarding virtual staging
of a home (which utilized both VR and AR features) were the most varied. Only ten of
the buyers strongly or very strongly agreed this feature was useful, and nine thought
it would make the home-buying process much faster or very much faster. Some of the
buyers suggested this would help them imagine an empty space or help them to get a
better idea of the size of the house. However, many others felt that this would not be
useful because the virtual staging options would not align with their style and may
include features that were much higher end than the actual furnishings of an average
home-buyer, creating a misleading assessment of the space. Key insights from the
buyers can be found in Table I.
From the realtor perspective, 11 of the 13 realtors found virtual tours of built homes to
be strongly or very strongly useful in the home selling process and believed these tours
could make the selling process much faster or very much faster. Consistent with the
home-buyers, they thought these tours could be used by the buyers to narrow down the
number of homes they actually wanted to visit in person, saving time for the buyer and
the realtor. In addition, one realtor commented that linking a tour to a home’s online
listing may improve its search engine ranking, suggesting that it may indirectly impact a
home-buyer’s information search process. Nine of the 13 realtors also strongly agreed or
very strongly agreed that virtual tours of homes in development or under construction
are useful. They commented that buyers often had a difficult time imagining what a home
would look like from floor plan and that it was difficult for them to imagine features like
ceiling height. However, two commented that these tours could be misleading and not
accurately reflect what the built home would look like. In addition, only five of the
realtors thought that VR tours of homes in development would make the home-buying
process faster or much faster because they believed buyers would want to “touch and
feel” the actual homes.
Finally, eight of the realtors strongly agreed or very strongly agreed that staging
using VR/AR technology would be useful in the home-selling process, and nine thought
it would make the purchase process much faster or very much faster. This is a departure
from the home-buyers who were quite divided on whether virtual staging was useful or
would expedite the purchase process. Realtors viewed this as a feature to enhance online

Insights about VR tours of built
homes
I would like to virtually walk
through the home to determine
if the house is the right candidate
to visit with a realtor
This would let me determine if
the “feel” of the floorplan works
for me, and I would use this
primarily before looking at a
property in person
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I would use this as a preliminary
tool to help narrow my search
I would use this because there is
time to search during the day or
at work. Most people work and
are tired when you get off and
traffic sucks
I would use it because seeing
multiple pictures still doesn’t
give you an idea of the actual
layout. I would use this as a first
step-before I even visit
This helps to weed out the
houses faster, and I can see what
I look forward to inspecting
This saves time and money and
narrows down which homes to
visit in person
Yes, I would use it from the
beginning of the search process
This could be used as an initial
substitute if I cannot get to a
physical location. I would use
this as soon as I saw a house I
was potentially interested in
It will show me a quick glimpse
of what to expect
Insights about VR tours of homes
in development
I would not like this. I would like
to see the actual results of
building
I would use this to determine if
the floor plan will work for me. I
would use this when searching for
possible properties to visit
I would use it but would still want
to walk a sample home before
making a purchase
Yes, I would use this initially in
the search because it gives you a
idea of the outcomes
You can somewhat see the finished
product and get an idea of it
would be a good fit
I would use to determine what to
buy ahead of time to put in the
house; I would use this tool before
anything else
This is helpful to see what it could
possibly look like, and could be
used when reviewing options
between built/not built homes
I would also use this from the
beginning of the search process
I would definitely use before
visiting a new development/
community. This would be
sufficient to make me want to
proceed or to stop that particular
search
I would like to see what it could
look like versus plans/specs
Virtual and
Insights about home staging
(using AR/VR technologies)
augmented
reality
This would let you personalize
the home to show you the full
technologies
picture of potentially how you
can stage and decorate your
home 407
Most people’s furnishings are
not the size or quality of staged
furnishings. It can be very
misleading as to what your
furnishings will look like and
how they will relate to the floor
plan
I would not use this; everyone
has different ideas on how they
want to stage their home
It makes you picture how much
room you will have
Yes, it helps you see the spacing
within each room
I wouldn’t use this. I can picture
it in my mind, and some staging
is not to my style
This could provide ideas of how
to arrange furniture including
how it would look and how much
space is left when furniture is
added. I would use this when
deciding which home to buy
This is very useful and could be
used at the start of the search
when comparing houses
I’m not very good at visualizing
so this would be a useful tour
This would help to set some idea
of the size of the room Table I.
(continued)
Key insights from
home-buyers
 JRIM
12,4 Insights about VR tours of built Insights about VR tours of homes Insights about home staging
homes in development (using AR/VR technologies)

I would use this before visiting a
home for the first time to better
understand the home layout.
408 Photos on a listing are often
hard to connect together
I would use this feature. I would
use it most before visiting to
narrow down options, but I can
imagine using it after as well
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This would be very helpful when
no model home exists to help
visualize the floor plan
Without this feature, there is no
way to know what this home
looks like. I would use it in
searching and after making a
decision as a memory aid
This might be helpful to flesh
out the rooms, but I generally
try not to fixate on other people’s
furniture so I can take or leave
this feature
I am less inclined towards this
feature because it would not be
my furniture and others’ tastes
may impact my feelings about
the home or create unrealistic
expectations about how that

I would use this to figure out
which homes to visit rather than
visiting them all so I don’t have
to get out of the house with the
kids. This would save time
space would be
I’d use it to get a feel for how the No, this would distort the real
house would look and feel like to thing. I would not use it
live in

Table I. Note: The purpose of the italicized text is to highlight main takeaways from the feedback

listings (information search) and a way to help buyers envision what the “lived-in” home
would look like, leading to a sale (conversion from alternative evaluation to actual
purchase). They saw it as a useful marketing technique to promote an empty home or a
home that was on a buyer’s short list for purchase. One realtor did comment that virtual
staging may be misleading for buyers, echoing the sentiment of several of the home-
buyers. Key insights from the realtors can be found in Table II.

4.2 VR and AR as competitive assets for sales agents

Seventeen of the 20 buyers indicated they were strongly likely or very strongly likely to
select a realtor who offered VR tours of built homes. Fourteen of the buyers indicated the
same ratings for a realtor who offered VR tours of homes in development or under
construction, but only eight indicated they were strongly or very strongly likely to select a
realtor offering virtual staging features. Their comments highlighted how virtual tours
would enhance their home-buying experience through time and place utilities and by arming
them with more insights about a home (its feel and space dimensions) so that they could
make a better purchase decision.
Ten of the 13 realtors believed buyers were strongly likely or very strongly likely to
select a realtor who offered VR tours of built homes. Eight of the realtors had the same
rating for a realtor who offered VR tours of homes in development or under construction,
and nine realtors believed buyers were strongly or very strongly likely to select a realtor
offering virtual staging features. A few of the realtors commented that they knew agents at
other firms using digital technologies and thought they would need to adopt these tools to
keep up with competition. They viewed this more as a necessity rather than a point of
differentiation, suggesting that they anticipated a proliferation in the use of VR and AR
technologies in this market space. Interestingly, nine of the realtors did not currently use
any type of digital technology. Several of the realtors commented that cost was a

Insights about VR tours of
BUILT homes
I use it in lager more expensive
homes. It allows a distant buyer
to decide to visit or rule out the
home. It allows a buyer to
discuss the home with family/
friends, and it helps a prospective
buyer connect with a property
I have used 360 degree walk-
throughs along with video and
those homes usually have more
activity and rank higher in
Google. I would definitely use
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them if the price was reasonable
enough
I would because I’d hope it would
help reduce the number of homes
we physically see. I would use it
before we tour homes in person
I don’t think it can replace the in
person search/buying experience
but can enhance. So many
buyers, and even their agents are
limited in time, this would allow
buyers to better narrow the homes
they want to see in person,
making good use of time. Also,
there are so many relocation
buyers. Many end up contracting
properties sight unseen. This
would be very valuable
I would use it depending on the
cost. I would use it in order to be
more competitive with other
listing agents. Buyers would use
it until they finally get a house
under contract
I would use this, but only for
certain listings. I would not use on
smaller sized homes. But it would
be useful to show the space, as
other firms are using this
Insights about VR tours of
homes in development
If this can be done before the
building, it will be very useful
and may help builders sell
quickly and for more money.
Buyers have difficulty imagining
the space before the walls come
up
I would use this to show
potential buyers what is
available in new construction. I
would send out to new
prospective buyers looking to buy
a new home
Same as other VR tour-I think it
would help reduce the number of
homes we physically see
Many buyers are not real visual
and struggle with reading blue
prints, or even simple layout
diagrams. This feature coupled
with the visual of a layout
drawing would be beneficial
I wouldn’t use this but because I
rarely sell new construction
Definitely use this; buyers can’t
picture the layout and heights of
ceilings
Virtual and
Insights about home staging
(using AR/VR technologies)
augmented
reality
I would use this in big empty
homes, or poorly arranged
technologies
homes. This is useful for small
spaces to show possibilities. This
is helpful before, during and 409
after showings
I think along with the virtual
walk through, I would use the
staging also. A lot of buyers
can’t imagine furniture in the
house, so this is a great way to
showcase a vacant home. I would
use this prior to showing new
buyers or virtually at the home
so they can see how the floor
plan can work for them
This would help sell the empty
home. I would use it before we
toured homes in person
Many people are NOT visual so
this would be extremely useful for
those buyers, as well as listings
that are vacant. Often times,
spaces appear smaller when
vacant and adding furniture for
depth makes all the difference
I would use it to make my vacant
listings look more attractive
online. Home-buyers would use
it until they secured a contract
on a home
I have seen this and it doesn’t
look good thus far. Would rather
just stage
Table II.
Key insights from
(continued) realtors
 JRIM
12,4 Insights about VR tours of Insights about VR tours of Insights about home staging
BUILT homes homes in development (using AR/VR technologies)

I think millennial buyers would I think it would be helpful but, Most buyers are not creative
like the technology; however, how buyers need to also touch and feel when looking at a home with not
410 it would affect their buying the home great decorating or unfurnished.
process is unknown. The home Although the furniture does not
purchase process entails many stay with the home, it is easier
things in addition to the home. for the buyer to imagine actually
Buyers want to see the living in the home when staged
neighborhood, how well the
neighbors maintain their home,
how the home ‘feels’ when they
enter, etc
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I think it would help get buyers
to a property to see it more
fully – I would use it in the very
early stages to see if they can help
narrow down a search
I use the virtual walk through in
the beginning stages of the home-
buying process. With the internet
being so big right now it is
important potential home buyers
have the opportunity to select
and view potential homes online
prior to going to view the
property. . ... Nothing replaces
actually touring the home but the
virtual tour does wet the appetite
for a prospective buyer to want to
the see home faster
This could be good for out of
town buyers. I would use it if it
Table II. made financial sense
This could be really helpful -
most buyers don’t have enough
imagination to see floor plans/
architectural drawings and get a
sense of how the space will look
and feel - so if you could show
them a virtual tour – they might
be more interested in a product
When building a new home
there are too many factors and
upgrades that buyers can
choose from. If a virtual tour
was used in the sense, the builder
would most likely have all the
bells and whistles displayed in
that property which is not a good
representation for all buyers
because most will not choose the
high dollar upgrades
This could be useful, but people
still like to see the homes in
person
This could be a good feature to
use with a buyer who sees a
vacant product – to show them
how it could be staged and how
it would feel different with
furniture – so I would use this
after they saw a few properties to
enhance their experience. It could
lead to a sale
Staging is always an excellent
way to market as buyers can
actually view how a room could
be set up. A large percentage of
the time home-buyers set up
rooms pretty close to how it was
staged. So by doing this feature
you are helping the buyer
envision how their potential
home could be used
I am very against this. I think
virtual staging is very misleading
and does not help show a space

consideration in their adoption of these technologies. However, it was evident that there is
an expectation that VR and AR technologies will be used in more aspects of the home
purchase process to provide services to buyers. Two of the realtors suggested that the VR
tours could become more comprehensive including neighborhood and walkability features.
Another realtor suggested that VR and AR technologies may be used to aid home
inspections, a time-consuming aspect of the home purchase process. Overall, it seems like
both realtors and buyers view the use of VR and AR technologies as way to narrow down
purchase alternatives and enhance information search. Buyers indicated a preference for
realtors who utilized virtual tours while not demonstrating as much interest in VR/AR
 customization tools. Realtors seemed to view digital technologies as more than a source of Virtual and
differentiation, but an eventual competitive necessity. augmented
reality
5. Discussion and implications technologies
5.1 Theoretical implications
First, this project builds on prior work which shows the EKB model is supported in online
(Darley et al., 2010) and digital contexts (Wolny and Charoensuksai, 2014). This research 411
explores the perceived impacts of VR and AR technologies on the different stages of the
model. Taking the home-buyers’ and realtors’ perspectives together suggests that VR tours
help home-buyers to narrow down the homes they are likely to visit in person, cutting down
time in the purchase decision process from both the buyers’ and sales agents’ (realtors)
perspectives. This suggests an impact on the alternative evaluation stage of the purchase
process from the EKB model (Engel et al., 1968). In addition, these impacts seem stronger
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when the home is actually built than under construction, suggesting VR technology
incorporating actual pictures, rather than simulated representations, are likely to have a
stronger impact on expediting the purchase process. Some of the comments indicated that
linking virtual tours to an online listing can also enhance where the listing shows up in
search engine page results, suggesting an impact, albeit smaller, on a buyer’s information
search, the second stage of the EKB model (Engel et al., 1968). Buyers are more likely to click
on information that is higher on a search engine results page, and this would provide them a
rich interactive experience without having to search for more information about a particular
house.
Second, a high involvement purchase decision involving a product class in which the
involvement is enduring (Houston and Rothschild, 1977), personal in nature (Sherif and
Cantril, 1947) and emotive (Vaughn, 1980) suggests that the consumer will have purchase
considerations which are highly shaped by his or her personal tastes. Interestingly, in this
research, VR/AR technologies that allow customization were perceived differently by
buyers and sales agents. While buyers were decidedly divided on whether they appreciated
such customization, agents saw it was a way to encourage a sale/purchase conversion by
helping a buyer envision a product or space in a more customized way. However, many of
the buyers seemed turned off by features which did not align to their tastes or were not
realistic by their standards. It is possible that digital customization features can generate
increased conversions between the alternative evaluation stage and the purchase stage in
the EKB model if they provide high-quality experiences and align closely with consumer
tastes. The implications of VR and AR technologies on the EKB model are highlighted in
Figure 4.
Third, prior work (Huang et al., 2016) suggests digital technologies can also be used as
a way to attract customers in a crowded market, and the feedback from home-buyers
confirmed a propensity to select a sales agent who utilized these technologies in their
sales process. The findings indicate that in high involvement contexts in which sales
agents play a significant role in the purchase process (e.g. travel agent, financial advisor,
automobile sales person, realtor), digital technologies are likely to be a necessity.
Therefore, simply offering the technology will not be a sufficient source of differentiation.
Instead, sales agents may have to be strategic in how they utilize technologies and offer
differentiated features through the technology. The realtors suggested using VR/AR
technologies to offer walkability tours and inspections, two critical aspects of the home
purchase process.
 JRIM
12,4

412
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Figure 4.
Implications of VR
and AR technologies
on the EKB consumer
decision model

5.2 Managerial implications

First, digital technologies can enhance a purchase experience by providing a consumer
more knowledge and understanding about a product or service before actually seeing or
experiencing it. It is possible that the ability to inspect a product or service in more detail
will shape a consumer’s expectations about the product. This can have downstream
implications for the purchase outcome (final stage of the EKB model). Both the home-
buyers and consumers suggested that when digital experiences do not closely reflect the
actual product or service, expectations are disconfirmed and can lead to dissatisfaction.
Thus, it is important for sales agents or managers utilizing these technologies to ensure
virtual experiences are as realistic as possible. This may have greater costs associated
with it, because high-quality pictures and images will need to be used, but it should
generate more positive consumer outcomes.
Second, a more informed consumer changes the role of a sales agent. Rather than using
sales meetings as an opportunity to answer basic questions, more time can be spent
answering nuanced questions about a product or service. Consumers are likely to come to
these meetings further along in the decision-making process. For example, many of the
home-buyers explained that the VR tours and AR staging features allowed them to narrow
down their purchase alternatives before then even went to see houses in person. A similar
scenario can be imagined for a wedding planner or an automobile sales person. Consumers
can now take VR tours of venues, design the interior of a space using AR technology, or
“drive” a car virtually. A sales agent may want to draw on these experiences when working
with the consumer so that his/her (the consumer’s) specific needs and wants can be
addressed more quickly and efficiently.
Third, the realtors expressed some apprehension over the cost of digital technologies
and how they would be integrated into their existing sales processes. Rather than
 reinventing the wheel, it is may be more efficient for sales agents to identify where in the Virtual and
process incorporating technologies makes the most sense. The findings indicate that augmented
these technologies have the greatest impact on the information search and alternative
evaluation stages of the consumer purchase decision process. Thus, managers may want
reality
to explore how their customers currently search for information and narrow down their technologies
purchase alternatives. Then they can use digital technologies to enhance and expedite
these experiences. For example, a vendor selling wedding dresses, a very high
involvement product, may find that most brides-to-be visit several stores. However, if 413
they have high quality images of their inventory already, these can be utilized to create
virtual try-ons which a bride-to-be can utilize from the convenience of her own home.
This is likely to trigger a store visit and improve the in-store experience, as the bride-to-
be will probably have a more refined consideration set of items. Section 6 addresses the
limitations and possible future directions related to this research.
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6. Limitations and future research directions

First, this research focused exclusively on digital technologies, specifically VR and AR
technologies, in a high involvement purchase context. However, there are other
technologies which are redefining the consumer purchase process. For example, Amazon
released the Echo Look product which offers a style assistant. Consumers can utilize its
style recommendations, generated through machine learning, when deciding what to
wear and which clothes to purchase. More research aimed at understanding the impact of
artificial intelligence (AI) and machine learning on consumer purchase decisions
warrants investigation. In addition, a high involvement purchase context was selected.
However, digital technologies may also impact low involvement purchase contexts.
Amazon Go utilizes what the company characterizes as “just walk out technology”
blending computer vision, sensor technology and deep learning so consumers can simply
grab items from a store and walk out without having to wait in checkout lines. Future
research aimed at understanding the impacts of new technologies on low involvement
purchase decision processes, using the EKB model or an alternate framework, would be
worthy of examination. Consumers may redirect the additional time savings to spend
more time evaluating alternatives, even in a low involvement context. Or, ease of
purchase may cause them to purchase more per shopping instance, which has
implications of customer satisfaction/dissatisfaction in the outcome stage of the EKB
model.
Second, this research was aimed at gaining deeper insights about VR and AR
technologies directly from consumers and sales agents. The insights gained provide a useful
first step in understanding the different ways VR and AR technologies impact the purchase
decision process and simultaneously affect the sales process. Future research utilizing
experimental methodology can be used to identify specific processes through which these
technologies impact purchase decisions.
Third, the research questions were examined in the USA and in high-demand housing
market conditions. Thus, the implications may only be generalizable to the USA and other
countries with similar housing markets and home purchase models. In addition, in markets
where housing demand is less, the results may be different. It is plausible in such markets,
where the supply of homes exceeds the demand, time is a less critical a factor in the
purchase process.
Fourth, the interviews suggested some disconnect between sales agents and buyers
about the utility of customization features through digital technologies. It seems like such
features may actually hinder the purchase process unless the customization capabilities
 JRIM align very closely with customer tastes. Future research could examine whether it is better
12,4 to offer such features if a wide range of customizations is not available or not offer them at
all.
Finally, all the realtors believed digital technologies would become a standard part of the
selling process in their industry. More research to understanding the challenges of
integrating such technologies into an existing sales process would be useful from a
414 managerial standpoint.
Overall, the objective of this research was to try and understand the impacts of
digital technologies, specifically VR and AR technologies, in a high involvement
purchase context. The EKB model was used as foundation for the purchase decision
process. These impacts were examined from both buyers and sales agents’ perspectives
to provide a holistic view of the impacts. The insights suggest that digital technologies
can shorten alternative evaluation in the purchase decision process and also enhance
information search. It is possible that technologies which are adept at creating
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customization experiences which closely align with customer tastes and expectations
will also encourage purchase conversion between the alternative evaluation stage and
the purchase stage of the EKB model. Hopefully, this project will encourage future
research aimed at understanding how different digital technologies impact consumer
purchase decision-making.

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Appendix. Questions for Home-buyers and Realtors

An explanation of virtual and augmented realties was provided.
Italicized text indicates the modified language used for realtors
They were asked a series of open-ended questions:
(1) Please explain if you would use a virtual walk through of a built home (in your selling
process), why you would use it, and when in the home search process you may use it. If
you don’t think you would use it, please explain why not.
(2) Please explain if you would use a virtual walk through of a home that is not yet built (in
your selling process), why you would use it, and when in the home search process you
may use it. If you don’t think you would use it, please explain why not.
(3) Please explain if you would use virtual staging of a home with furniture and other
features (in your selling process), why you would use it, and when in the home search
process you may use it. If you don’t think you would use it, please explain why not.
They were also asked a series of rating questions:
(1) Please rate on a scale of 1 (Very Strongly Disagree) to 7 (Very Strongly Agree) how
useful the following features would be in the home-buying (selling) process.
(2) Please rate on a scale of 1 (Very Much Slower) to 7 (Very Much Faster) how much
the following features would help make the home-buying (selling) process faster or
slower.
(3) Please rate on a scale of 1 (Very Highly Unlikely) to 7 (Very Highly Likely) you (you
believe a prospective home-buyer) would be to select a realtor who offered the following
features compared to a realtor who did not (assume the realtors are the same in every
other sense).
 Features evaluated: Virtual and
 A virtual walk-through of a built home augmented
 A virtual walk through of a home that is not yet built but planned (e.g. neighborhoods reality
under construction) technologies
 Virtual staging of a home so you (a buyer) can imagine it with furniture.
Then they were asked some background and contextual questions.
(1) How long have you been looking for a new home?/How long have you worked in the
417
residential real estate industry
(2) Is this your first home to purchase?/Do you currently utilize any virtual reality or
augmented reality technology in the services/listings you provide?
(3) Are you independently purchasing the home or it is a joint (with another/multiple
people) purchase decision?/Which residential real estate market do you primarily serve?
Downloaded by University of Otago At 03:31 17 December 2018 (PT)

Corresponding author
Debika Sihi can be contacted at: sihid@southwestern.edu

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