Artificial intelligence is steadily reshaping online shopping, yet livestream sales remain an arena where humans outperform machines. A new study from the UBC Sauder School of Business reveals that AI-powered “digital streamers”—virtual hosts that promote products during live broadcasts—fall well short of their human counterparts. In many cases, their results are scarcely better than having no host at all.
“People tend to assume that if companies are investing in digital streamers, they must be effective. But that’s not true, at least not in their current incarnation,” said UBC Sauder associate professor Dr. Yanwen Wang, co-author of the study recently published in Information Systems Research. To investigate, the team examined sales data from a leading fashion retailer on Tmall.com, one of the world’s largest e-commerce platforms. Out of 328 products analysed, 72 were promoted by digital streamers, 74 by human hosts, and 182 had no presenter. The pattern was clear: human streamers drove significant sales growth, while digital ones added only a marginal lift.
The researchers then partnered with a new online grocery retailer on Tmall to test whether design changes could improve the performance of AI streamers. Starting with a simple cartoon-like avatar, they progressively introduced more sophisticated features, such as natural voices, realistic appearances, and interactive capabilities. Their goal was to identify which qualities mattered most to shoppers.
The results pointed to two decisive factors: form realism, meaning how convincingly human the avatar looked, and behavioural realism, or how effectively it interacted with viewers. Of all the upgrades trialled, the most powerful was giving the streamer the ability to answer questions in real time. This single feature led to a 25-per-cent increase in products sold and an 86-per-cent surge in revenue. Interactive elements such as a lottery system also helped, boosting sales by 17 per cent and revenue by 70 per cent.
Although cosmetic improvements like human-like voices and more polished appearances delivered modest gains, Dr. Wang emphasised that interactive engagement was essential. “Only by enabling real-time Q&A could digital streamers match the sales performance of human presenters,” she explained. This finding highlights the importance of immediate, two-way communication in persuading customers to buy.
Looking ahead, the researchers suggest that a hybrid approach is most effective, with a single human overseeing several AI streamers and stepping in when nuanced responses are needed. Digital hosts have clear cost advantages—they can operate round the clock without salaries, breaks, or fatigue—but businesses must recognise that without meaningful interaction, they offer little benefit. As Dr. Wang concluded: “Our study shows that digital streamers can be effective, but only if they are designed to engage customers as dynamically as humans.”
More information: Yanwen Wang et al, Artificial Intelligence-Powered Digital Streamers in Online Retail: Empirical Insights and Design Strategies from Experiments, Information Systems Research. DOI: 10.1287/isre.2023.0024
Journal information: Information Systems Research Provided by University of British Columbia