Artificial intelligence is changing how we shop online, but when it comes to selling products through livestreams, humans still have the edge.
A new study from the UBC Sauder School of Business shows that AI-powered "digital streamers"-virtual salespeople who appear in livestreams to promote products-don't perform as well as human streamers. In fact, they barely outperform having no streamer at all.
"People assume that if businesses are using digital streamers, they must be doing well. But they aren't, at least not in their current incarnation," said UBC Sauder associate professor Dr. Yanwen Wang, a co-author of the study in Information Systems Research .
The research team looked at sales data from a popular fashion retailer on Tmall.com, one of the world's largest e-commerce platforms. They compared sales of 328 products before and after the retailer introduced digital streamers. Of those, 72 were promoted by digital streamers, 74 by human streamers, and 182 had no streamer at all.
The results were clear: Human streamers significantly boosted sales. Digital streamers, on the other hand, showed only a small improvement over having no streamer-and far less than their human counterparts.
But the researchers didn't stop there. They wanted to understand why digital streamers were falling short and how they could be improved.
In a second part of the study, they worked with a new online grocery retailer on Tmall that also used digital streamers. The team tested different versions of the streamers, starting with a basic cartoon-like avatar and gradually adding features to make them seem more human, such as realistic voices and the ability to answer questions in real time.
They found that two things made the biggest difference: form realism (how human the streamer looks) and behavioural realism (how well the streamer interacts with viewers).
The most effective upgrade was giving the digital streamer the ability to answer questions in real time. This feature led to a 25-per-cent increase in the number of products sold and an 86-per-cent jump in revenue. Adding a lottery feature-where viewers could win prizes during the livestream-also helped, boosting sales by 17 per cent and revenue by 70 per cent.
"Human-like voices and improved visual appearances also contributed to gains, but to a lesser degree," said Dr. Wang. "Only enhanced real-time Q&A interactions allowed the digital streamers to achieve sales performances on par with human streamers."
This suggests that timely, interactive engagement is a key to driving sales.
Dr. Wang says the best future approach may be a mix of human and AI. For example, a human could monitor several AI streamers at once, stepping in to answer questions when needed.
Digital streamers do have one big advantage: cost. Unlike humans, they can livestream 24 hours a day without breaks or salaries. But businesses need to understand what works and what doesn't before relying on them.
"When businesses are choosing digital streamers, they hope they'll work as well as human streamers," said Dr. Wang. "But our study shows there's no lift in sales at all-unless you improve how they interact with customers."
The study is the first to offer real-world evidence of how digital streamers affect sales, and how their design can be improved. It was co-authored by Dr. Wang, Dr. Yahui Liu of Nanjing Audit University, Dr. Shuai Yang of Donghua University and Dr. Lei Wang of Indiana University.
