Introduction The retail environment, which is offering special experience to consumers based on customized consumer lifestyle, creates customer value from voluntary customer engagement. In recent study, it is shown that customer engagement is becoming an important factor which determines the characteristics of customer behavior in the retail and hospitality industries. However, the study of customer engagement has mainly focused on its performance in marketing field ( Hapsari, Clemes, and Dean, 2017; Kumar and Pansari, 2016) and most researches have handled the concept of customer engagement from the perspective of online environment(Shin and Byun, 2016; Jeon, 2016). Theoretical Development This study aims to investigate the psychological motivation for customer engagement and to examine the underlying factors of customer behavior in offline retail environment based on experience economy theory and Self-Determination Theory(SDT). First, this study investigates the relationship between perceived psychological benefits (autonomy, competence, and relatedness) and intrinsic motivation. Also, this study tried to analyze the relationship between intrinsic motivation and customer engagement (conscious participation, enthusiasm, and social interaction). Second, we tried to examine the relationship between customer engagement and customer creation value (functional value, hedonic value, and social value). Thirdly, we suggested the effect of customer creation value on customer purchasing behavior (shopping memories, customer satisfaction, word-of-mouth, and revisit intention). In addition, we attempted to find the mediating effect of the hedonic value between customer engagement and shopping memories; customer engagement and customer satisfaction. Futhermore, we investigated the mediating effect of shopping experience between hedonic value and customer satisfaction. Finally, We discussed the managerial implication for differentiated competitive advantage in the experience-based retail environment. Research Design and Model Testing To test the research hypotheses and our research model, we conducted questionnaire survey from the respondents who have ever been to the major experience-based shopping malls within 6 months. Through the confirmatory factor analysis, reliability and validity of the study constructs were verified. By using the structural equation model, research hypotheses were tested and most research hypotheses were statistically significant and accepted. The final research model also showed the statistical significance with the goodness-of-fit indices. Result and Conclusion As shown in the results of this study, the experience-based retail environment leads to higher customer engagement and increase the customer’s hedonic value and reinforce positive shopping memories. Specifically, the experience-based retail environment is offering psychological benefits and customers enjoy experience itself. During the shopping experience, the customers are motivated for customer engagement. The managerial implications of the study results for the corporate managers in the retail and/or hospitality industries were also discussed.

Introduction The Fourth Industrial Revolution brings a great change in the retail market through combining new digital technologies, such as data clouding, Artificial Intelligence, and Virtual Reality(VR) technology. The Alibaba group, which is in charge of 90% market share in China, announced a new Virtual Reality (VR) shopping mall, Buyplus, and Alibaba expected that VR will improve shoppers’ engagement and will experience the joy of shopping mall at home. The potential power of VR shopping mall in Korea is recently acknowledged by the Korean government and Korean government developed the full scale VR shopping mall for the first time in Korea. The VR shopping mall is expected to be a new paradigm of distribution channel industry by incorporating some advanced digital technologies. Conceptual Background In previous study, Pelet et al. (2017) investigated the optimal flow experience enhanced by the telepresence in social media. The overall flow provides a unique immersion experience for social media users, also the frequency of use and time distortion were affected during the use of the system. Choi and Choi (2016) conducted a study and they showed that telepresence was one of the important factors in the new technology-based marketing environment. Limioid Theory is explaining a psychological process when user enters into a new situation. Users have to decide how to expand and act on their own in a new situation, so users quickly fall into new situation and want to transit successfully (Huang & Liao, 2017). Virtual Reality shopping with new technology will bring a new marketing paradigm in the future. The purpose of this study is to analyze users’ telepresence and other underlying factors of behavioral intention of VR shopping. To achieve this primary goal, first, we investigated the factors of VR shopping psychology—such as telepresence, challenge, body ownership, and control for VR shopping. We also tried to investigate the factors of perceived value VR shopping - such as playfulness and usefulness by applying the Flow Theory and Virtual Liminoid Theory. Second, we analyzed the relationships between the factors of perceived value and the behavior intention VR shopping by applying the Technology Acceptance Model (TAM). This study suggests the moderating effects of technology readiness and time distortion between telepresence and playfulness. Model Testing and Conclusion In this study, we developed the virtual reality supermarket which is operated by headmounted VR glasses and body sensors with the help of VR technology start-up company. Total 120 university students participated and experienced the VR shopping. By using the structural equation model, research hypotheses were tested and most research hypotheses were statistically significant and accepted. The final research model also showed the statistical significance with the goodness-of-fit indices. We tried to analyze the moderating effects of time distortion and technology readiness between telepresence and playfulness. We also found that there is a moderating effect of time distortion between body control and playfulness. As a result of model testing, we found that playfulness and usefulness are the major mediators between the underlying factors of VR shopping and behavioral intention of VR shopping. The results of this study about VR shopping explain how retail and marketing managers can operate VR shopping store in the technology-based future retail environment. The managerial implications of the study results for the corporate marketing managers and the limitations of the study were also discussed.