Design Principles for Virtual Reality Applications Used in Collaborative Service Encounters

Immersive technologies like virtual reality (VR) provide new opportunities to augment service encounters by supporting customer–service agent collaboration and problem-solving. Guided by the value cocreation and service technology infusion literature, a design science research (DSR) study is carried out with three iteratively developed versions of a VR application used to make decisions about forest management services. The aim is to develop design principles (DPs) for physical VR technology-infused service encounters. DSR produces unique knowledge on how a VR solution affects customer–service agent collaboration. In each development cycle, the problem–solution fit is evaluated, and emerging problems are addressed in the following DSR cycles. Based on interviews (N = 127) with customers and service agents of a forest management service company conducted during the DSR cycles, we show that VR technology solutions support collaboration and problem-solving in knowledge-intensive service encounters by invoking dialogue difficult to generate otherwise—especially when decision-makers are novices and service outcomes are physical and irreversible. We present three new DPs that help conceptualize how collaborative service encounters can be improved by using a developing VR technology: (1) the principle of empowerment, (2) the principle of focus, and (3) the principle of guided decision-making.