The market forecast for Augmented Reality technology is encouraging. The fashion industry has been one of the early adopters. Several AR-enabled devices have been developed and are being implemented in retail fashion stores. Devices are also available for customers to shop fashion online. Examples of AR devices include Smart Glasses, Smart Fitting Rooms, and Interactive Mirrors, collectively referred to as Augmented Reality Interactive Technology (ARIT). The forecast for ARIT in Fashion shopping is also upbeat. This paper reviews the academic literature on Augmented Reality in customer engagement, within the context of using this technology for fashion shopping. We also looked at marketplace insights. Sustainability and Customer Co-creation/Co-Production are two themes in which the fashion industry is heavily invested, to encourage responsible buying and consumption, and to drive business through one-to-one personalization. This paper applies the Service-Dominant Logic aligned Customer Engagement Framework to empirically study these trends. A novel construct has been proposed to study the antecedents and consequences of customer co-creation. The moderating effect of ARIT perceived interactivity and perceived augmentation has also been studied. 316 users of ARIT across the USA and India participated in the online survey over the Prolific platform. SPSS and AMOS were used for data analysis with CFA (Confirmatory Factor Analysis) and SEM (Structural Equation Model). Close to 1000 papers from Web of Science and Scopus were downloaded from 2019 to 2014. Bibliometric analysis confirmed the themes of sustainability and customer co-creation as key areas for further research. Interactivity and Augmentation features of AR were identified for studying their impact on sustainability and customer co-creation. Key findings of this paper include the quantitative study of Customer Knowledge Sharing (CKS) as an antecedent to Customer Co-creation (CCO) and the novel consequence of driving Sustainable Purchase (SP), within the context of fashion shopping. The moderating effect of ARIT devices in fashion shopping was also studied to understand whether ARIT is expected to strengthen these relationships or if this technology is creating disengagement. The paper provides insights to practitioners on areas of improvement in ARIT and the pitfalls to watch out for to avoid customer disengagement.