Customer experience, engagement, and co-creation in augmented reality retail service

Retailers are increasingly using augmented reality (AR) to enhance the customer experience. This research investigates how AR service experiences contribute to customer co-creation. Two experimental studies using real AR applications and PLS-SEM provide evidence. Study 1, utilizing IKEA Place and WannaKicks, examines whether network externality enhances experience quality and whether customer autonomy influences this effect. Results show that network externality enhances experience quality, but the effect weakens at higher levels of autonomy, indicating that autonomous customers rely less on network cues. Study 2, utilizing Warby Parker and Dulux Visualizer, examines whether experience quality influences co-creation through engagement and whether the need for uniqueness moderates the engagement–co-creation relationship. Findings reveal that engagement fully mediates the effect of experience quality on co-creation, and the need for uniqueness strengthens this link for individual products, but not for shared products. The studies clarify how AR experience mechanisms and customer traits shape co-creation outcomes.