Eying Sales Gains with Virtual Try-On Technology: A Natural Experiment in Webrooming

The webrooming effect is a phenomenon when consumers search and research products online but make purchases at offline stores. Despite theoretical acknowledgment and anecdotal evidence, empirical identification and quantification of this effect is lacking. We address this gap by utilizing two events: the adoption of virtual try-on technology (VTO) and the COVID-19 pandemic. By analyzing sales data from 30 eyewear retail chains in the U.S., we employ a natural experimental research design and difference-in-difference-in-difference models to estimate the impact of VTO on sales performance and within-retailer webrooming during pandemic-induced offline store closures. The findings reveal that VTO positively affects online sales by attracting more consumers. Moreover, the study demonstrates the existence of a significant webrooming effect, with online sales from VTO use increasing more for the dual channel retailers than for the pure online retailers during offline store closures. This effect is estimated to be as high as 94% of baseline sales. Theoretical and managerial implications are also discussed.