Investigating the Effect of Augmented Reality Experiences on Brand Coolness and Willingness to Pay More (Case Study: Shahr Farsh Campaign)

Introduction

Profitability, as one of the fundamental objectives of brands, can no longer be achieved in today’s competitive environment solely through improvements in product functional attributes; instead, it increasingly depends on consumers’ symbolic, emotional, and personality-related brand perceptions. In this context, creating distinctive and memorable experiences has emerged as a key strategy for generating perceived value and enhancing consumers’ willingness to pay more. Augmented Reality (AR) technology, by offering interactive, immersive, and engaging experiences, enables the simultaneous activation of consumers’ cognitive and emotional processes and plays a significant role in shaping brand perceptions. One of the emerging concepts in branding literature is brand coolness, which refers to consumers’ perceptions of a brand as attractive, unique, and innovative, and is associated with important behavioral and economic outcomes. Despite the growing adoption of AR in marketing practices, limited research has simultaneously examined the effects of AR-based experiences on brand coolness and subsequent consumer behavioral outcomes. Therefore, the aim of the present study is to investigate the effects of four types of AR experiences: Entertainment experiences, Aesthetic experiences, Education experiences, and Real Escape experiences on brand coolness and its role in increasing consumers’ willingness to pay more. From a theoretical perspective, this study contributes to filling an important gap in the branding literature, while from a managerial perspective, it provides valuable insights for designing innovative AR-based experiences within brand marketing strategies.

Methodology

The present study adopts a quantitative, descriptive–correlational research design and examines the relationships among Augmented Reality (AR) experiences, brand coolness, and consumers’ willingness to pay more. The empirical context of the study is the Shahr-e Farsh AR campaign conducted in 2024, which was designed to increase brand awareness and create an innovative and interactive experience. This campaign allowed users to visualize selected carpet models in three dimensions within a real environment and to precisely adjust their features. The statistical population consisted of individuals who participated in this campaign and were selected using non-probability convenience sampling. In total, 305 valid questionnaires were collected. Data collection was carried out in autumn 2025 using a standardized questionnaire. To ensure instrument quality, the questionnaire was pilot-tested with 35 respondents and subsequently revised based on feedback and the opinions of two subject-matter experts. The final version was distributed online via social media platforms. Responses were measured using a five-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). Data analysis involved a combination of descriptive and inferential statistical techniques. Descriptive analyses, including measures of central tendency, dispersion, and demographic characteristics, were conducted using Excel. Inferential analysis was performed through structural equation modeling using SmartPLS 3 and the PLS-SEM approach. Model evaluation proceeded in two stages: first, the measurement model was assessed through confirmatory factor analysis, with convergent validity evaluated using AVE, discriminant validity assessed via the Fornell–Larcker criterion, and reliability examined using Cronbach’s alpha and composite reliability (CR). In the second stage, the structural model was evaluated by estimating path coefficients and testing their significance through bootstrapping, and overall model performance was assessed using R², effect size (F²), and predictive relevance (Q²) indices.

Discussion and Results

The findings indicate that the four types of Augmented Reality (AR) experiences: Entertainment, Aesthetic, Educational, and Real Escape simultaneously activate multiple dimensions of brand coolness, enhancing consumers’ perceptions of the brand’s attractiveness, uniqueness, and innovativeness. Entertainment and interactive experiences increase brand energy and popularity, aesthetic experiences strengthen visual appeal and creativity, educational experiences convey authenticity and perceived value, and Real Escape experiences activate the brand’s unconventional dimensions. Additionally, brand coolness has a direct and significant effect on consumers’ willingness to pay more. The results of this study demonstrate that combining AR technology with engaging and interactive experience design can tangibly increase perceived brand value, creating a cool brand image and notable profitability. Structural model analysis further showed that brand coolness mediates the relationship between AR experiences and consumers’ willingness to pay more. Survey data revealed that the majority of consumers were willing to pay 5–20% more, with a subset even accepting increases above 25%, indicating that perceived brand coolness enhances pricing power without disrupting consumers’ rational cost–benefit evaluation. Overall, the results suggest that AR experiences simultaneously activate multiple dimensions of brand coolness and effectively translate immersive engagement into positive behavioral outcomes.

Conclusion

This study demonstrates that AR-based experiences can meaningfully enhance brand coolness and increase consumers’ willingness to pay more. Brands can leverage short, interactive, and visually appealing AR experiences to strengthen engagement, loyalty, and perceived uniqueness. Practical applications include product simulations, interactive mini-games, educational content, and immersive environments that allow consumers to explore, personalize, or visualize products in realistic contexts. Focusing on aesthetic design, clear visual presentation, and creative content reinforces perceived attractiveness and value. The results suggest that AR experiences not only improve brand awareness and consumer interaction but also create tangible economic benefits by enabling higher price acceptance. These insights provide actionable guidance for marketers seeking to integrate innovative, technology-driven experiences into their strategies, demonstrating that well-designed AR interventions can transform conventional brand interactions into engaging, memorable, and value-enhancing consumer experiences. Future research could explore long-term effects, other product categories, or cross-cultural contexts to further understand the impact of AR on brand perception and consumer behavior.