How does augmented reality enhance brand equity? The mediating role of the vividness experience

Purpose Advancements in augmented reality (AR) technology have increased the interest in improving brand equity by creating AR-enhanced branding experiences. However, despite the potential of AR branding, knowledge regarding the underlying mechanisms required for AR features to build brand equity remains limited. Thus, we considered embodied cognition theory to investigate how designing AR features enhances brand equity, particularly through the vivid experience of AR-enhanced body–environment interaction. Specifically, this study focused on both environmental and physical AR features: environmental embedding (EE) and simulated physical control (SPC). Design/methodology/approach The results of an online experiment with 297 participants in a 2 (high/low EE) × 2 (high/low SPC) between-subjects design underwent analysis of covariance and structural equation modeling to examine the relationship between AR features, vividness and brand equity. We also examined the moderating effects of prior AR experiences. Findings The results support most hypotheses that the experience of vividness is a crucial mediator linking AR features (EE and SPC) and consumer-based brand equity. The findings confirm the influential role of prior AR experience in the moderated mediation model, implying that AR-enhanced brand equity occurs primarily among technically adept AR consumers. Originality/value This study contributes to the literature by identifying AR-enhanced body–environment interactions as a novel approach for enhancing brand equity. We also revealed the antecedents of vividness in the context of AR-enhanced branding. Moreover, the findings reveal that AR effects are contingent on consumers’ prior AR experience.