Virtual reality is the extension of every major technology we already use today (Manjoo, 2014). Barnes, Mattsson, and Hartley (2015) argue that VR is a significant new environment for experiential customer service interactions as well as a recreational activity. It is capable of blurring the boundaries between the consumer’s virtual and physical environment (Schlosser, Mick, & Deighton, 2003). In other words, in our fitness context where people enter a VR while performing a core body workout, VR is capable of blurring the boundaries between physical servicescape and virtual service environment created. In our study we answer the question which reality is predominantly perceived by the customers and which implications that has for service providers. Previous scholars focused on the evaluation of customer’s presence and perception of the physical servicescape (Baker, Levy, & Grewal, 1992; Bitner, 1992; Wakefield & Blodgett, 1999) and demonstrated the impact of cues on post-consumption constructs like emotion, customer satisfaction or service quality (Hooper, Coughlan, & R. Mullen, 2013; Reimer & Kuehn, 2005; Wall & Berry, 2007). We extend that knowledge by analysing the potential of simultaneous presence in both the physical and virtual environments. Psychological immersion into the virtual world, or in other words, escape from the servicescape into the virtual environment will both be dominant over the physical servicescape and generate additional value to the users (Holbrook, 1994; Innocenti, 2017; Yee, 2006). To address the research question, we used sports equipment which allows the survey participant to virtually fly through the Rocky Mountains while performing a workout (ICAROS). The data was generated using a questionnaire which was answered after the workout. The data shows a direct positive relationship between telepresence and escapism, supporting (a) the theory that people predominantly perceive the VR as their actual reality during the service consumption (i.e. workout) and (b) that escaping the servicescape supports participants overall desire to escape from reality, which in turn has a positive impact on participants’ functional and emotional evaluation of the service. These results contribute to a rising research interest in the use of VR in a service environment and offers great potential to practitioners on how an application of VR technology may enhance service experience and subsequently increase customer satisfaction by changing the servicescape at low cost.

• Daniel Zimmermann(Ludwig-Maximilians-University, Munich, Germany)
• Eva-Cosmea Fuhrmann(Ludwig-Maximilians-University, Munich, Germany)