To Tell or Not to Tell: Investigating the Persuasive Appeal of Information Transparency for AR-Powered E-Commerce Sites

In e-commerce, Augmented Reality (AR) employs computer vision and artificial intelligence (AI) techniques to enhance the shopping experience through personalized recommendations based on users’ physical data. However, concerns regarding privacy and perceived intrusiveness can undermine the persuasive appeal of personalized AR for e-commerce experiences. Can overtly communicating information transparency mitigate such concerns? Two between-subjects online experiments were conducted, revealing that consumers were drawn to the AR-powered e-commerce site due to its heightened perceived immersion and usefulness but also considered it more intrusive than the non-AR site. However, when both websites were AR-powered, the one with high information transparency significantly enhanced perceived privacy protection, reducing perceived intrusiveness. Perceived transparency positively mediated the effects, particularly among individuals with lower pre-existing trust in algorithms. These findings have implications for theory pertaining to the use of AR in strategic communications and the design of information transparency for AR-powered e-commerce.