The Influence of Chatbots and Augmented Reality on Wardah

Beauty's Purchase Intention

Hanastasia Siahaan

Master of Management Science, University of North Sumatra, Jl. Prof. T.M Hanafiah, SH, Medan, Indonesia

Keywords: Chatbot Augmented Reality Purchase Intention

Abstract: The latest technological developments in the marketing 5.0 era have brought many changes in all

environments, including the cosmetic industry. The application of new technology in product marketing

is expected to be able to provide services that can increase customer Purchase Intention. This study aims

to analyze the effect of Chatbot and Augmented Reality features on Purchase Intention of Wardah

Beauty products. The research method used is a method with a quantitative approach used to examine

certain populations or samples, namely consumers who use Wardah Beauty products. Sampling was

done by non-probabilistic sampling method with the number of female respondents as many as 85 people

and the data used was primary data in the form of a questionnaire. The data analysis method used is

multiple regression analysis. The results of this study indicate that (1) Chatbot has a positive and

significant effect on Purchase Intention in Wardah Beauty products. (2) Augmented Reality has a

positive and significant effect on Purchase Intention in Wardah Beauty products. purchasing Wardah

Beauty products.

1 INTRODUCTION

The entry of the marketing 5.0 era and the

development of information technology are

widely used by various industrial sectors.

Marketing 5.0, according to Kotler et al (2021), is

the application of technology that can imitate

humans to create, communicate, provide services,

and increase value along the customer journey.

Digital technology in the development of

marketing 5.0 should provide the right solution

and be considered relevant to the needs of today's

consumers.

Artificial intelligence has been developed over

the years to replicate human cognitive abilities,

specifically to learn from unstructured consumer

data and find insights that marketers might find

useful. When combined with other enabling

technologies, AI can also be used to deliver the

right offers to the right customers. The

disappearance of the barriers of space and time

allows consumers to shop anytime and anywhere.

This is a challenge for companies to serve

consumers every time they make transactions.

With technology constantly evolving, 24/7

customer service can be maximized with Chatbot

technology.

The presence of Chatbots is none other than

the development of artificial intelligence (AI)

technology. Chatbots are becoming increasingly

booming because they can replace humans to

perform certain tasks in the provision of services

in many sectors, especially in the field of e-

commerce (Park et al., 2021).

Chatbots are often the first services a business

consumer interacts with. Many customers must

first interact with the AI Chatbot before engaging

in any buying behavior. Only when a customer

encounters a problem that the Chatbot can't solve

does he or she turn to human customer service.

Chatbots are programs that can simulate

human conversations via voice commands or text

commands and act as virtual assistants for users

(Luo et al., 2019, p.1). Using a Chatbot offers

advantages in terms of operational cost savings,

service efficiency, and a more positive user

experience. Many businesses leverage Chatbots in

their efforts to provide instant response and 24/7

support to consumers (Chen et al., 2021; Cheng et

al., 2021).

Siahaan, H.

The Inﬂuence of Chatbots and Augmented Reality on Wardah Beauty’s Purchase Intention.

DOI: 10.5220/0011518700003460

In Proceedings of the 4th International Conference on Social and Political Development (ICOSOP 2022) - Human Security and Agile Government, pages 91-97

ISBN: 978-989-758-618-7; ISSN: 2975-8300

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

From a service provider's point of view,

Chatbots address many of the challenges that

services face with humans. For example, Chatbots

can handle multiple consumer requests

simultaneously (Cheng et al., 2021), while

humans can usually only respond to one consumer

request at a time. In addition, because Chatbots

are not frustrated, bored, or easily tired like

humans, they are made to communicate and serve

customers in a friendly manner (Cheng et al.,

2021; Luo et al., 2019). In general, Chatbots are

very promising in providing fast, convenient, and

friendly service to consumers.

However, the researchers also found that

consumer interest in receiving and using Chatbots

was relatively low (Ashfaq et al., 2020), with 87%

of consumers preferring human agents over

Chatbots to interact (Pres, 2019). This happens

because Chatbot responses are often not in line

with consumer expectations because their needs

or desires are often ignored. Despite the relatively

low level of consumer acceptance of Chatbots,

marketers are still fascinated by AI-enabled

technologies (Schanke et al., 2021). This has

fueled the argument that the popularity of Chatbot

development is due to the drive to keep up with

technology rather than market demand (Nordheim

et al., 2019). Artificial intelligence (AI)

technology is also developing Augmented Reality

(AR) capabilities. In AR, Interactive digital

content is superimposed on the user's view of the

real world environment. (Kotler,In an online

shopping environment, consumers are unable to

touch, feel or try products (Jiang and Benbasat,

2007; Li, Daugherty, and Biocca, 2002).

Therefore, for online sellers, it is very important

to create a satisfactory alternative to direct

product experience by offering consumers

specifications, features and information about

product performance before purchasing (Klein,

2003).

The application of AR technology gives the

impression that consumers feel the sensation of

virtual shopping as if it were real. According to

ThinkMobiles, with the advent of AR technology,

63% of consumers trust AR implementation by

providing a different shopping experience, data

shows that 35% of potential consumers are likely

to make a purchase more often if they can try

before buying.

The amount of public interest in the use of AR

technology certainly cannot be separated from the

various advantages it offers (Ozturkcan, 2020).

AR is considered capable of playing a role in

providing business benefits because it can affect

consumer interest in buying products. Through its

digital technology, AR can provide insight to

customers with a different experience when they

recognize a product. In addition, AR is considered

to be able to support consumer communication

with business people because through this

technology consumers feel more involved and

want to keep trying. As content that is supported

by digital media, AR has advantages in terms of

media richness because its content can provide

more complete information in various forms

(Bubaš, 2001). Smart retail applications and

mobile AR have fundamentally changed the retail

environment and significantly improved

consumers' quality of life (Nikashemi et al.,

2021). The use of AI has also attracted the interest

of one of the largest cosmetic companies in

Indonesia, namely Wardah. Beauty. On the site,

you can find Chatbot and AR features that can

help consumers choose the products they want.

Not only can they try cosmetics virtually, but

consumers can also inquire about their skin

problems virtually with the SkinLab function.

You can find Chatbot and AR features that can

help consumers choose the products they want.

Not only can they try cosmetics virtually, but

consumers can also inquire about their skin

problems virtually with the SkinLab function.

You can find Chatbot and AR features that can

help consumers choose the products they want.

Not only can they try cosmetics virtually, but

consumers can also inquire about their skin

problems virtually with the SkinLab

function.With these various features, consumers

will find it easier to find products that suit their

needs, be it cosmetics or skin care. This supports

consumer interest in buying Wardah Beauty

products. Consumers can try products before

buying, such as lipsticks, foundations, and

powders that meet consumer needs. This

technology can help businesses minimize the

disappointment that consumers often feel about

products not performing as expected.

2 LITERATURE REVIEW

2.1 The Role of Chatbots in Purchase

Intention

AI Chatbots can be used to convince consumers

of their interest in buying. The customer's interest

ICOSOP 2022 - International Conference on Social and Political Development 4

in buying is a major problem in marketing

management, because it affects the customer's

final decision. McLean and Osei-Frimpong

(2019), for example, studied live chat and

demonstrated that the variables influencing its use

depend on the context to initiate chat

conversations, i.e. to support search/browse or

support decision-making processes. The main

goal is to make customers not only chat and use

the service, but ultimately buy the product or

service, improving their customer experience.

Chung et al. (2020) studied the effect of

Chatbot services in the context of luxury retail on

customer satisfaction and showed that digital

service support tools can help build positive

relationships with customers, even when e-service

agents do not fully communicate with customers.

For this reason, Chatbots can be seen as a

substitute for customer service agent

communication that can close the sale through

appropriate communication based on five quality

dimensions: interaction, entertainment, trends,

personalization, and problem solving (Chung et

al., 2020). Compared to human customer service,

some of the capabilities of AI Chatbots go beyond

humans, such as self-learning, accurate personal

recommendations, always online, ready to

respond to customer needs at any time, and more

sTable (Deloitte, 2018b).

While some AI Chatbot capabilities are not as

good as humans, such as the inability to have deep

emotional interactions with customers and some

problems that are difficult to solve, they still

require human customer service (Forbes, 2017).

Sands et al (2020) show that interactions with

Chatbots, if personalized (using certain narrative

cues based on entertainment), can optimize

emotions and relationships, and thereby gain

customer interest and satisfaction.

2.2 The Role of Augmented Reality in

Purchase Intention

Augmented Reality (AR) has become an effective

interactive technology for providing visual

product information (Jung, Chung & Leue, 2015;

Vonkeman, Verhagen & Van Dolen, 2017). The

concept of AR is to display 3D information on

virtual products in real time in a consumer market

environment (Javornik, 2016). AR extends from

3D technology, which provides a 360-degree view

of virtual products. However, the distinguishing

difference between 3D and AR is that AR

integrates virtual products into the consumer's

physical environment (Olsson, Lagerstam,

Kärkkäinen, and Väänänen-Vainio-Mattila,

2013). With the increasing importance of

contextual information, AR makes it easier for

consumers to visually inspect products in their

physical space (Vonkeman et al., 2017). Recently,

Augmented Reality is used as a direct view of

the real world by adding information virtually.

AR development is not only for entertainment

purposes, but can be used by marketers as an

increase in Purchase Intention. In AR applications

there are three features that need to be considered.

First, merging the real world with the virtual

world or interactivity.

Second, display images with clarity and detail

or clarity. Third, the information provided is

different and specific or new.

Previous studies have suggested that

customers perceive more risk with online or

mobile purchases compared to offline purchases

(Schröder & Zaharia, 2008). This is because

consumers find it difficult to evaluate products

accurately when shopping online or on mobile

devices (Verhagen & van Dolen, 2011). Since

customers cannot physically experience (e.g.,

touch and try) the product through online and

mobile channels, they cannot rely on product

performance. According to Steuer (1992), the

presentation of high-quality products helps reduce

risk by creating a sense of non-mediation, which

reduces the barrier between the consumer and the

product. When customers feel that the product is

physically present with them, negative

impressions can be reduced. As Augmented

Reality experiences provide richer product

presentations with high levels of telepresence,

consumers experiencing AR may find it easier to

make purchasing decisions than consumers

without AR (Hilken et al., 2018; Javornik, 2016).

In an online/mobile shopping environment, AR

technology increases consumer satisfaction and

consequently increases Purchase Intention (Dako,

2017).

3 RESEARCH METHODS

This type of research is explanatory research with

a quantitative approach. The selection of

respondents was carried out using a sampling

technique, namely convenience sampling and

finalized sampling of more than 85 female

respondents with a vulnerable age of 21-35 years

because this generation grew up in the internet era

The Inﬂuence of Chatbots and Augmented Reality on Wardah Beauty’s Purchase Intention

and has more contact through social media.

network. average for what is considered a very

tech-savvy generation.

This research was conducted online, namely by

distributing questionnaires to the intended

respondents using Google forms. Respondents in

this study include users of Wardah Beauty

products seen on social media who bookmark or

like content on Wardah Beauty's accounts, as well

as users who provide comments and reviews on

Wardah Beauty's posts. A sample of 85

respondents was obtained and analyzed using

multiple linear regression analysis.

Table 1: Characteristics of interviewees

Age Amount Percentage

20-25 years 17 20

25-30 years 50 58.8

> 31 years old 18 21.17

Education Amount Percentage

Senior high school 10 11.76

Bachelor Degree 50 58.82

Master Degree 25 29.41

Profession Amount Percentage

Student 39 45.88

mployees 20 23.52

overnment Employees 26 30.58

Based on Table 1, it can be seen that the majority

of respondents aged 25 to 30 years were 58.8

percent, then those aged over 31 years were 21.17

percent, and those aged 20 to 25 years were 21.17

percent and 20 percent.

In the education category, the majority of

respondents' education was at the tertiary level by

58.82 percent, at the master's level 29.41 percent

and at the high school level by 11.76 percent.

In the work category the majority of respondents

are students up to 45.88%

Figure 1 Conceptual framework

H1: The influence of Chatbots on Purchase

Intention in Wardah Beauty products

H2: The influence of Augmented Reality on

Purchase Intention in Wardah Beauty products.

4 RESULTS AND DISCUSSION

This study uses multiple linear analysis to see the

effect of Chatbot and Augmented Reality on

Purchase Intention. The value of R2 is used to

measure the level of variation of changes in the

independent variable to the dependent variable.

The R2 value of this study can be seen in the Table

below:

Table 2: R Square

Purchase

Intention

R Square Adjusted R Square

0.534 0.523

Based on Table 2, it can be seen that the R-

squared value of 0.534 means 53.4 percent of the

variable Purchase Intention on the Wardah Beauty

website can be explained by the Chatbot and

Augmented Reality variables. While the

remaining 46.6 percent can be explained by other

factors not examined in this study.

Table 3: Anova

Purchase

Intention

F Sig

47.015 0.000

Based on Table 3, it is known that the number of

samples (n) is 85 respondents, and the number of

parameters (k) is 3, so that it is obtained df1 = 3 -

1 = 2; df2 = n - k = 85 - 3 = 82, then en = 0.05,

the value of Fcount (47.015) > FTable (3.107) and

significance (0.000) < (0.05). This means that the

Chatbot and Augmented Reality variables

simultaneously have a significant effect on

consumer Purchase Intention in Wardah Beauty

products.

Table 4: T-statistics and P-value

T Statistic P Value

Chatbot PI 3.761 0.000

Augmented Reality PI 3.937 0.000

With (n) = 85, the number of parameters (k) = 3,

df = (n - k) = 85 - 3 = 82 so that with an error rate

= 0.05, t Table = 1.989 is obtained.

Cha

Bot

Augmented

Reality

Purchase

Intention

ICOSOP 2022 - International Conference on Social and Political Development 4

Augmented Reality regression coefficient value

(β2) = 0.364 > 0 with tcount (3.937) > tTable

(1.989). This shows that the Augmented Reality

variable has a positive and significant effect on

Purchase Intention, which means that the higher

the Augmented Reality suitability, the Purchase

Intention will increase significantly and vice

versa.

4.1 Effect of Chabot on Purchase

Intention

The value of the Chatbot regression coefficient

(β1) = 0.536 > 0, with tcount (3.761) > tTable

(1.989) and significance (0.00) < (0.05). This

shows that the Chatbot variable has a positive and

significant effect on Purchase Intention, which

means that the better the Chatbot, the Purchase

Intention will increase significantly and vice

versa.

As Presti et al (2021) state that Chatbots play a

role in the perception of hedonistic and utilitarian

product value and can be a relevant factor in

customer decision making. This is in line with

claims that AI Chatbots can be used to convince

consumers of their intention to buy (Chung et al.

2020)

Experiments have shown that Chatbot interactions

can contribute to the Purchase Intention process.

(Presti et al 2021). In a digital environment,

conversations in virtual spaces (Chatbots) create

an experiential environment that can act as a

stimulus for the buying process. Purchase

Intention can be obtained through interactive

activities and the ability to know how to provide

useful information to potential buyers.

4.2 Effect of Augmented Reality on

Purchase Intention

The results of this study indicate that the

Augmented Reality variable on Purchase

Intention is 0.00 less than 0.05 which means that

there is a positive and significant effect of

Augmented Reality on Purchase Intention.

Because AR experiences provide richer product

presentations with high levels of telepresence,

consumers experiencing AR may find it easier to

make purchasing decisions than consumers

without AR (Hilken et al., 2018; Javornik, 2016).

This is in line with Dako’s claim (2017; Whang

(2021) that AR technology can further increase

consumer satisfaction so that it will affect

Purchase Intention.

5 CONCLUSIONS

This study examines the effect of implementing

Chatbot and Augmented Reality features to create

Purchase Intention in customers. The

development of Chatbot and Augmented Reality

technology has a positive and significant impact

on consumer Purchase Intention on the Wardah

Beauty website. This research focuses on the

beauty industry which is starting to use

technology in selling its products. In practice, this

research can help companies in similar industries

and other industries use technology in their

marketing processes so that they can be different

and can create their own value.

Through the application of this AR feature, it can

help sellers eliminate consumer doubts when

shopping online because it can provide a real

picture of a product through a virtual experience

with image clarity and time efficiency.

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