Special Session Summary Virtual Spaces As Consumer Environments: Theoretical and Applied Issues

Alladi Venkatesh, University of California, Irvine
[ to cite ]:
Alladi Venkatesh (1998) ,"Special Session Summary Virtual Spaces As Consumer Environments: Theoretical and Applied Issues", in NA - Advances in Consumer Research Volume 25, eds. Joseph W. Alba & J. Wesley Hutchinson, Provo, UT : Association for Consumer Research, Pages: 60-61.

Advances in Consumer Research Volume 25, 1998      Pages 60-61



Alladi Venkatesh, University of California, Irvine


Recent developments in multimedia and interactive technologies (e.g. the Internet) have aroused considerable interest among consumer and marketing researchers. New initiatives by noted institutions like Marketing Science Institute, creation of new journals (Journal of Interactive Marketing); special issues (e.g. European Journal of Marketing); course offerings such as Internet Based Marketing; and a steady stream of seminars and practitioner oriented meetings attest to the explosive nature of the technological scene. In order to comprehend these developments and their significance to consumer research, what is needed is systematic knowledge creation that will guide us through this complex terrain.

Emerging conceptualizations and the implications of technological developments for consumer behavior research on virtual environments have significant appeal for the ACR audience. In the realm of current technological development, the practice is ahead of theory in some instances, mainly due to the rapid pace of emerging new technologies, thus leaving academic researchers a little behind in their efforts to make sense of their impact. At the same time, the pioneers in the world of practice need guidance from academic researchers to provide conceptual schemes that can sharpen their practices in hypercompetitive environments.

It is in this spirit of mutual recognition and with a view to adding some coherence to these developments that we have assembled prsentations both from the academics and industry professionals.


The rapid growth of multimedia technologies and the Internet in its various forms is changing the nature of commerce as it expands into the virtual environment. While technological developments are outpacing consumers’ ability to cope with the developments, researchers are struggling to develop and apply appropriate models of consumer behavior that would potentially enrich consumers’ participation in the new environments. In a recent paper, Hoffman and Novak (1996) put forward a "flow" model of consumer experience as a way to study user behavior. In another paper, Venkatesh (1998) conceptualized electronic environments as "cybermarketscapes" to signify that the site for consumer participation is two-way, simultaneous, and interactive, thus signifying the development of a new paradigm to study consumer behavior. In a similar vein, Deighton (1996) argued that marketing is no longer "marketing" but is indeed "interactive marketing," suggesting similar radical transformation.

The purpose of this session was to problematize these issues in greater intensity. After careful thinking, we proposed to address the following four key questions that represent the main issues covered by the presentations.

1. In what possible ways can we configure virtual environments so we that we can examine the relationship between "virtual spaces" and "physical or real spaces" and draw appropriate theoretical insights for studying consumer behavior? The issues addressed here are conceptual and theoretical and were the focus of the first presentation.

2. What are the specific ways in which users participate in virtual spaces? This question will be answered in the second presentation by reference to specific findings from ongoing research at Intel research labs and field studies.

3. With the advent of Internet and virtual shopping, how do we implement a virtual store that caters to the needs of the virtual shopper? The second presentation was addressed this using case study of a virtual store, "Virtual Emporium" which recently opened in Santa Monica, CA.

4. Given that virtual environments are technological environments of a particular kind, how do we measure consumers’ behaviors in these environments? What specific techniques are now available or being developed to study user behavior? This question was addressed by a presentation on collaborative filtering techniques that use machine language, artificial intelligence and natural processing languages. The following is a summary of the presentations. John Deighton of the Harvard Business School was the discussant.



Alladi Venkatesh, Susan Knight and Hope Schau

University of California, Irvine

One of the problems facing consumer and marketing researchers is how best to conceptualize virtual environments. One simple way is to state that virtual environments can be modeled like physical environments so that one mirrors the other in almost all respects. In this presentation the authors presented four models that compare virtual and physical environments: the mirror model, the parallel model, the synergy model, and the sci-fi model physical space. Each of the models has implicationsto the way we conceptualize consumer participation in the virtual environments and for building customer value. In a recent study the Synergy model was used to conceptualize consumer participation in Virtual Emporium, which is the focus of another presentation.



Tony Salvador Ph.D., Intel Corporation

Design Ethnography is a set of data collection and analysis perspectives, assumptions and skills that can be used effectively to understand a particular environment, domain, or target consumer market for the express purposes of designing new consumer-high-technology products. That is, we borrow and modify techniques and methodologies from the social sciences to explicitly support new product design. Working from the data, we construct models of the virtual environment explicitly considering the individuals’ relationships to space, time, artifacts, activities, nature, and more importantly other people. The motivation for this work is to reduce the probability of product failure in the consumer market due to insufficient end-user value.



Tuck Rickards, CEO, Virtual Emporium

Virtual Emporium is the world’s first retail concept dedicated to on-line shopping. Located in one of the most successful outdoor malls in the US - The Third Street Promenade in Santa Monica, California - our flagship store was launched on November 7, 1996. Virtual Emporium’s retail concept offers the merchandise selection of a two-million-square-foot mall in a friendly, 2,500 square-foot neighborhood store. Virtual Emporium provides a sneak preview of what the shopping world might look like in 4 to 5 years. The question addressed by the presenter in this presentation is: What would be the best business model of consumer behavior for Virtual Emporium? How do we study consumer behavior and measure usage patterns based on on-line research?



Erin Bradner and Alladi Venkatesh, University of California, Irvine

The presentation introduced the topic of collaborative filtering techniques, also known as intelligent information filtering, which is a mixture of information retrieval, machine learning and natural language processing. These techniques have become particularly important because, as the amount of information available on the Internet increases with astonishing speed, it is getting harder and harder for individuals to locate and filter out the information that is relevant to them. There is, therefore, a clear need for intelligent agents that automatically adapt to consumers’ interest and help locate useful information. The presentation provided examples of techniques under development as well as some ethical problems that surround data collection based on web-browsing.


Deighton, John (1996), "The Future of Interactive Marketing," Harvard Business Review, Nov-Dec 1996, 151-166.

Hoffman, Donna L, Thomas P. Novak (1996), "Marketing in Hypermedia Computer-mediated Environments: Conceptual Foundations," Journal of Marketing, Vol. 60, No. 3, July, 50-68.

Venkatesh, Alladi (1996), "Computers and Other Interactive Technologies for the Home," Communications of the ACM Special Issue on Internet@Home, Volume 39, No. 12, December, 47-54.

Venkatesh, Alladi (1998), "Consumers and Cybermarketscapes-Critical Perspectives", " John F. Sherry (ed), Consumer Environments and Servicescapes, NTC Publishing.