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.

Virtual Reality (VR) is no longer only a buzzword, but pronounced to be the next revolutionary platform after PCs and smartphones (Bellini et al., 2016). Up to this point research on VR has been primarily focusing on virtual product experiences (e.g.Klein, 2003; Li, Daugherty, & Biocca, 2002) or brand experiences (e.g.Van Kerrebroeck, Brengman, & Willems, 2017), whereas no research using a VR in conjunction with service concepts or provider-consumer relationships could be found. However, with service characteristics such as intangibility and a high uncertainty in purchase decisions the new technology could prove very useful in supporting customers in their purchase decisions (Lovelock & Wirtz, 2011). VR is able to simulate the consumption more similar and closer to a direct experience than other media and is hence be able to support the customer in his decision decision. Furthermore, and induced by the feeling of telepresence or spatial presence customers are transported to the virtually created service environment and hence enabled to familiarize with the service and connect with the service provider prior to the actual consumption (Balasubramanian, Konana, & Menon, 2003). The theoretical foundation lies with the Construal Level Theory (CLT) and the concept of psychological distance. As Trope and Liberman (2010) induce, objects that are closer to one’s direct experience (low psychological distance) are mentally construed on a lower (more concrete) level and thus perceived with a lower psychological distance or in other words close from the self, here, and now (Liberman & Trope, 1998; Trope & Liberman, 2010). The study at hand shows a direct positive relationship between the level of telepresence and the participants’ construal level, enabling service providers to reduce the level of psychological distance to their consumers with the help of VR. Further, the positive relationship between construal level and participants’ level of trust, risk and perceived firm knowledge could be proven as significant with the data at hand. This is both supporting and extending the existing literature (Darke, Brady, Benedicktus, & Wilson, 2016; Edwards, Lee, & Ferle, 2009). The results contribute to an increasing interest of the potential of construal level theory application in a service environment and offer great potential for service practitioners to reduce psychological distance to their customers and in the following increase trust and reduce risk, both being very central challenges when it comes to the purchase decision for services.