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Bridging Reality and Virtuality: The Role of AR/VR in Personalized
Marketing Strategies
Ismael, S. N
1
, Ibrahim, S. N. K. A
2
1
Azman Hashim International Business School, Universiti Teknologi Malaysia
2
Department of Electronic Systems Engineering (ESE), Malaysia-Japan International Institute of
Technology (MJIIT), Universiti Teknologi Malaysia
DOI: https://dx.doi.org/10.47772/IJRISS.2025.91100055
Received: 10 November 2025; Accepted: 20 November 2025; Published: 28 November 2025
ABSTRACT
Augmented Reality (AR) and Virtual Reality (VR) are transforming personalized marketing by enabling
immersive, interactive, and data-driven consumer experiences. These technologies, collectively referred to as
Extended Reality (XR), are redefining customer engagement, brand loyalty, and purchasing behavior. AR
enhances real-world environments by overlaying digital content, allowing for virtual product try-ons and
interactive advertisements. Meanwhile, VR provides fully immersive experiences that strengthen emotional
brand connections through virtual storefronts, simulations, and storytelling. This paper explores the integration
of AR/VR in personalized marketing strategies, highlighting their applications in retail, tourism, and advertising.
Businesses are leveraging these technologies to create tailored experiences that cater to individual consumer
preferences, enhancing satisfaction and conversion rates. The role of artificial intelligence (AI) in optimizing
AR/VR interactions further enhances personalization by analyzing consumer data to deliver highly customized
content. Despite the significant advantages, challenges such as high development costs, privacy concerns, and
hardware limitations hinder widespread adoption. However, continuous advancements in AI, data analytics, and
user experience optimization are driving broader implementation. The findings suggest that strategic investment
in AR/VR will be crucial for businesses aiming to maintain a competitive edge in an increasingly digital
marketplace.
Keywords: Augmented Reality (AR), Virtual Reality (VR), Personalized Marketing, AI-Driven Customization,
Consumer Engagement, Data Privacy, Brand Loyalty, Business
INTRODUCTION
The integration of Augmented Reality (AR) and Virtual Reality (VR) technologies into marketing strategies
represents a paradigm shift, offering unprecedented opportunities for personalized and immersive consumer
experiences (Ekmeil et al., 2021). These technologies, collectively known as Extended Reality (XR), are rapidly
evolving from novelty applications to essential tools for businesses seeking to enhance customer engagement,
build brand loyalty, and drive sales in an increasingly competitive digital landscape (Alcañíz et al., 2019).
Augmented Reality enhances the real world by overlaying digital information onto a user's perception, creating
interactive and informative experiences that blend the physical and virtual domains (Gans & Nagaraj, 2023). In
contrast, Virtual Reality provides a fully immersive, computer-generated environment, transporting users to
simulated realities where they can interact with products and services in an engaging manner (Jung et al., 2019).
The convergence of these technologies with sophisticated data analytics and artificial intelligence (AI) is paving
the way for highly personalized marketing campaigns that cater to individual consumer preferences and needs
Applications of AR/VR in Personalized Marketing
The application of AR in marketing spans various sectors, with retail, tourism, and advertising emerging as key
areas of adoption (Du et al., 2022). In retail, AR applications enable customers to virtually "try on" clothing or
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visualize furniture in their homes before making a purchase, enhancing the shopping experience and reducing
uncertainty associated with online transactions (Jin-feng & Dong, 2022). The tourism industry leverages AR to
augment heritage sites, providing visitors with interactive historical information and immersive experiences that
enrich their understanding and appreciation of cultural landmarks (Nechita & Rezeanu, 2019). Additionally, AR
is reshaping advertising by allowing brands to create highly engaging and memorable campaigns that capture
consumer attention and seamlessly integrate with their environment (Prodea & Constantin, 2023).
VR, on the other hand, provides consumers with immersive brand experiences that foster stronger emotional
connections. From virtual store walkthroughs to interactive product showcases, VR enhances the customer
journey by allowing users to experience products and services before purchase. This technology is particularly
impactful in the fashion and automotive industries, where lifelike simulations can significantly influence buying
decisions (Ravindran et al., 2023).
LITERATURE BACKGROUND
The intersection of AI and AR/VR is revolutionizing marketing by enhancing customer experiences and
operational efficiency (Gajjar, 2024). AI-driven personalization in AR/VR environments enables brands to tailor
recommendations and interactions to individual preferences, fostering deeper consumer engagement (Olson &
Levy, 2017). The rapid growth of online shopping, accelerated by the COVID-19 pandemic, has further fueled
the adoption of these technologies as businesses seek to replicate the tactile and experiential aspects of in-store
shopping in the digital realm (Kim & Ha, 2021).
Personalization is key to strengthening relationships between system quality, content, and customer satisfaction.
Augmented Reality improves consumer confidence and reduces psychological distance when making purchasing
decisions, ultimately leading to higher conversion rates and increased brand loyalty (Pal & Ade, 2022). Table
2.1 shows comparative table on the implication of AR/VR in their marketing strategies.
Table 2.1: Comparative table on the implication of AR/VR in their marketing strategies.
Company
AR/VR Implementation
Impact on Consumer
Engagement
Key Takeaways
IKEA
(Global)
AR-powered 'IKEA Place' app
allowing users to visualize
furniture in their homes
Increased consumer
confidence in
purchasing decisions
AR enhances pre-
purchase
visualization
Nike (Global)
VR experiences in flagship
stores and AR-powered
sneaker try-ons
Higher brand
engagement and sales
conversion
Immersive
experiences drive
in-store traffic
L’Oréal
(Global)
AR-based virtual makeup try-
ons via mobile apps
Boosted online
shopping experience
and customer
satisfaction
AR bridges the gap
between online and
offline retail
Coca-Cola
(Global)
VR storytelling campaigns
and AR-integrated packaging
Enhanced brand
storytelling and social
media engagement
VR builds
emotional
connections with
consumers
BMW
(Global)
VR-based test drives and AR
car configurators
Increased customer
interest and showroom
visits
AR/VR can reduce
reliance on physical
inventory
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AirAsia
(MAS)
AR-enhanced travel
experiences and VR flight
simulations
Improved customer
engagement and loyalty
AR/VR enhance
brand interaction
for travel industries
Maxis (MAS)
AR-powered digital
campaigns for product
visualization
Increased customer
interaction with digital
content
AR improves
product awareness
in telecom industry
Petronas
(MAS)
VR-based safety training and
AR-integrated marketing
campaigns
Enhanced brand
reputation and
employee training
AR/VR serve dual
purposes for
marketing and
internal operations
Table 2.1 shows the integration of AR/VR has gained significant traction across industries, with companies
leveraging immersive technologies to enhance consumer engagement, strengthen brand experience, and improve
operational effectiveness. It reveals common patterns and strategic outcomes that demonstrate the growing
importance of AR/VR in contemporary business environments. Across the retail and consumer goods sectors,
AR/VR is primarily adopted to support product visualization and virtual try-ons, which directly influence
purchasing confidence and reduce pre-purchase uncertainty.
For instance, IKEA’s AR-powered “IKEA Place” enables customers to visualize furniture in their physical
spaces, while L’Oréal’s virtual makeup try-ons facilitate more accurate and satisfying online shopping
experiences. Similarly, BMW’s VR-supported test drives and AR-based car configurators allow consumers to
explore vehicle features in detail without relying heavily on showroom inventory. These implementations
indicate that AR/VR functions as a critical tool for bridging the gap between online and offline decision-making,
thus improving sales conversion and customer satisfaction.
In branding and marketing applications, companies increasingly utilize immersive media to enhance storytelling
and emotional engagement. Nike and Coca-Cola employ VR experiences and AR-integrated campaigns to create
more interactive and memorable brand interactions. Such initiatives not only increase consumer attention and
in-store traffic but also foster deeper emotional connections that contribute to long-term loyalty. Malaysian
telecommunications provider Maxis similarly applies AR in its digital marketing content to elevate brand
visibility and stimulate consumer interaction with promotional materials. Beyond consumer-facing functions,
several companies adopt VR for training, safety, and simulation purposes. AirAsia utilizes VR to simulate flight
experiences and travel scenarios, improving customer engagement while supporting internal training modules.
Petronas applies VR for safety training simulations, enabling employees to practice high-risk procedures within
a controlled virtual environment. These initiatives highlight the versatility of VR in enhancing competency,
operational readiness, and employee performance.
A cross-industry analysis shows that AR/VR adoption consistently yields positive outcomes, including increased
engagement, improved product understanding, enhanced purchase confidence, stronger brand affinity, and more
effective training outcomes. While global companies often employ AR/VR for experiential retail enhancement
and advanced marketing, Malaysian organizations demonstrate strong momentum in leveraging immersive
technologies for training, education, and digital engagement that reflecting an expanding national interest in
Industry 4.0 tools.
Overall, AR/VR technologies offer substantial strategic value by transforming how consumers interact with
products, brands, and services. The combined evidence suggests that immersive technologies are no longer
experimental add-ons but integral components of digital transformation strategies across multiple industries.
Companies that adopt AR/VR gain competitive advantages through enriched customer experiences, operational
efficiencies, and stronger marketing impact, positioning themselves more effectively within increasingly digital
consumer ecosystems.
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Challenges and Future Directions
Despite the immense potential of AR/VR in personalized marketing, several challenges must be addressed to
ensure widespread adoption and effectiveness. Key barriers include:
a) High Development Costs: The creation and deployment of AR/VR applications require significant
investment in technology, infrastructure, and expertise, making it difficult for smaller businesses to enter
the market.
b) User Experience Optimization: The success of AR/VR marketing depends on delivering compelling and
user-friendly experiences that provide real value to consumers. Poor execution can lead to frustration and
disengagement.
c) Data Privacy and Security Concerns: The use of AI-powered personalization raises ethical concerns about
consumer data privacy. Businesses must implement stringent security measures to protect user information
and maintain consumer trust.
d) Hardware Limitations: While smartphone-based AR experiences are widely accessible, high-quality VR
applications still require specialized headsets, which may limit mass adoption.
Future research should explore cost-effective solutions, improved user interface designs, and best practices for
ethical data usage to ensure that AR/VR marketing continues to evolve in a consumer-friendly manner.
METHODOLOGY
This study employs a systematic article review (SLR) methodology to investigate the emerging role AR/VR in
advancing personalized marketing strategies. The SLR approach was designed to ensure methodological rigor,
transparency, and replicability.
To capture the breadth and depth of relevant scholarship, searches were systematically conducted across major
academic databases, namely Scopus, Web of Science (WoS), IEEE Xplore, ScienceDirect, Emerald Insight,
Taylor & Francis Online, and Google Scholar. These databases were selected due to their strong coverage of
technological innovation, digital marketing, and consumer behaviour literature. The search focused on materials
published between 2015 and 2024, reflecting the period during which AR/VR technologies matured
technologically, became commercially viable, and were increasingly adopted in marketing practice.
A structured set of keywords and Boolean search queries was employed to ensure precise retrieval of relevant
literature. Core search terms included “Augmented Reality marketing,” “Virtual Reality marketing,” “AR
personalized marketing,” “VR consumer engagement,” and “immersive digital experience.” To incorporate
theoretical dimensions, additional keywords such as “Technology Acceptance Model (TAM),” “Unified Theory
of Acceptance and Use of Technology (UTAUT),” and “Stimulus Organism Response (SOR) framework” were
included. Boolean operators (e.g., AND, OR) were used to combine terms effectively, thereby capturing studies
that examined the intersection of immersive technologies and consumer behaviour theories.
Inclusion and exclusion criteria were clearly defined to maintain relevance and methodological consistency.
Studies were included if they: -
(i) examined AR or VR within marketing, consumer engagement, or personalized communication
contexts;
(ii) were published within the defined time frame;
(iii) appeared in peer-reviewed journals, reputable conferences, or credible global industry reports (e.g.,
Deloitte, McKinsey, PwC, Gartner); and
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(iv) were written in English. Studies were excluded if they focused solely on the technical development
of AR/VR tools without connection to marketing outcomes, or if they were informal essays, blog
posts, or non-scholarly commentaries lacking methodological rigor.
The selection process followed a structured four-stage protocol consisting of:
1. Identification; Initial database searches generated an extensive pool of studies.
2. Screening; Titles and abstracts were screened to eliminate irrelevant materials.
3. Eligibility; Full texts were reviewed to confirm theoretical and methodological relevance.
4. Final Inclusion; Studies meeting all criteria were retained for thematic synthesis.
A systematic data extraction process was applied to each included study, capturing essential characteristics such
as publication year, research design, sample population, type of AR/VR application, theoretical framework,
marketing objectives, and key findings related to personalization and consumer responses.
To analyse the literature, a thematic synthesis approach was utilized. First, open coding was conducted to identify
recurring concepts related to immersive technologies, personalization mechanisms, engagement triggers, and
behavioural responses. Next, axial coding was applied to group related concepts into broader themes, such as
consumer decision-making, experiential value, hedonic/utilitarian perceptions, and technology adoption drivers.
Finally, selective coding integrated these themes into a cohesive narrative supported by relevant theoretical
constructs.
The analysis was further strengthened through the integration of three key behavioural and technology adoption
theories. The Technology Acceptance Model (TAM) provided insights into how perceived usefulness and ease
of use influence consumer acceptance of AR/VR applications. The Unified Theory of Acceptance and Use of
Technology (UTAUT) expanded this understanding by examining the roles of performance expectancy, effort
expectancy, social influence, and facilitating conditions in shaping consumer adoption intentions. Meanwhile,
the Stimulus Organism Response (SOR) framework offered a behavioural lens for interpreting how immersive
AR/VR stimuli shape cognitive and emotional states, ultimately influencing behavioural responses such as
purchase intention, engagement, satisfaction, and loyalty.
By synthesizing empirical evidence through a structured review process and anchoring interpretations within
these established theoretical frameworks, this methodology provides a robust foundation for understanding the
strategic value of AR/VR in personalized marketing. The technology evolves and becomes more accessible, we
can expect to see even more innovative applications of AR/VR in marketing, transforming the way brands
interact with consumers and creating new opportunities for engagement and personalization.
RESULTS
The findings indicate that AR/VR technologies are reshaping the retail and advertising landscapes by offering
highly personalized and interactive consumer experiences. As consumer expectations shift toward more
immersive and immediate interactions, businesses must adapt by integrating AR/VR solutions into their
marketing strategies. Retailers, for instance, are leveraging VR to create virtual shopping environments, allowing
customers to explore and interact with products in ways that traditional e-commerce cannot replicate. In the
fashion industry, virtual try-on features and immersive runway shows are revolutionizing brand engagement and
purchase behavior.
DISCUSSION
AR and VR technologies provide innovative avenues for businesses to craft unique and personalized marketing
campaigns (Alexandrova & Poddubnaya, 2023). By bridging the gap between online and in-person shopping, these
technologies offer new opportunities for enhancing customer satisfaction and loyalty. Personalized shopping
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experiences, enabled by AI-driven AR/VR applications, have the potential to redefine consumer-brand
relationships by offering tailored content and interactive engagements (Chhabra, 2023).
Augmented Reality and Virtual Reality technologies present new and innovative ways for businesses to create
unique and personalized marketing campaigns (Alexandrova & Poddubnaya, 2023). Augmented Reality enables
new product development and success in the apparel industry. VR is able to assist with quick responses to
consumers to enhance the performance of the new products (Silva et al., 2018). The use of virtual store models can
help researchers and fashion retailers to gain insight and understanding of how customers behave in the stores (Park
et al., 2018).
By offering immersive brand experiences, AR/VR technologies have the power to foster stronger customer
relationships and drive brand loyalty (Chhabra, 2023). Personalized shopping experiences are set to revolutionize
consumer behavior, driving higher conversion rates and increased customer satisfaction. As AR/VR technologies
become more sophisticated, immersive shopping experiences have the potential to redefine customer-brand
relationships and revolutionize online consumer loyalty.
In addition to marketing applications, AR/VR can also provide valuable data insights. Businesses can analyze user
interactions within virtual environments to better understand consumer preferences and optimize marketing
strategies accordingly. However, companies must carefully consider data security, consumer privacy, and the
potential psychological impacts of extended VR use (Alexandrova & Poddubnaya, 2023).
CONCLUSION
AR/VR technologies have emerged as powerful tools for creating personalized marketing experiences that can
enhance customer engagement, drive brand loyalty, and ultimately boost sales. These technologies allow
businesses to create immersive and interactive experiences that cater to the unique needs and preferences of
individual customers. The implementation of virtual reality technologies requires consideration of various factors
including data security, consumer privacy, and potential impacts on mental and physical health.
The capacity of VR and AR technologies to provide individualized and captivating experiences will propel the
transformation of marketing strategies, thereby enabling businesses to cultivate enduring connections with their
target audience and attain unprecedented levels of triumph. Augmented Reality and Virtual Reality are poised to
revolutionize how businesses connect with customers.
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