The up surging role of artificial intelligence (AI)towards orchestrated marketing approach assist resonating target customers from different touch points. Technologies such as augmented reality (AR) and virtual reality(VR) play a crucial role by inducing a nexus of sensory stimuli in enhancing buyers’ experiential value and determining their purchase behaviour. Through physical mapping, AR applications recognize and track physical space and objects followed by the placement of virtual objects in the real world.  Thus, AR leverage machine learning to enable human-AI interaction. In this line, the present study intended to develop an AR experience model to determine buyers’ behaviour in B2C e-commerce. Partial Least Square based Structural Equation Modeling was incorporated to witness the significance of the hypothesized relationships between the variables; while, bootstrapping technique was utilized to analyze the higher order effects in the proposed model. Findings revealed that the AR-induced perceived augmentation in e-retail enhances the experiential value of customers which positively lead to user engagement and purchase intentions. Further, the study witnessed the role of spatial presence as a mediating variable in perceived augmentation and experiential value relationship. The proposed model is unique to accompany the behavioural consequences predicted by the experiential value gained by the customers during human-AI inter action via AR application in B2C e-commerce. The study may assist marketers to augment their AR-based applications and sensory marketing stimuli in line with customers’ expectations; thus, enriching their experiential value, engagement and purchase intentions in online retail.