Human Touch Triumphs: AI Salespeople Fall Short in Livestream Sales

AI salespeople aren't better than humans... yet

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 behavioral 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% increase in the number of products sold and an 86% jump in revenue. Adding a lottery feature -- where viewers could win prizes during the livestream -- also helped, boosting sales by 17% and revenue by 70%. "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.

Research shows humans are far superior to AI on this business task

Artificial intelligence may be booming, but there are some things people can still do better. That's according to a new study from the University of British Columbia's Sauder School of Business, which found that virtual salespeople in livestreams don't outperform humans in the same role. In fact, when interacting with consumers to promote products in real time, these AI-powered "digital streamers" barely do better than no streamers at all. (So much for AI coming for that job.) "People assume that if businesses are using digital streamers, they must be doing well," said Yanwen Wang, coauthor of the study. "But they aren't, at least not in their current incarnation." The study, published in Information Systems Research, looked at sales data from e-commerce site Tmall.com. It compared sales by humans and AI-powered digital streamers of 328 products (74 by humans, 72 by digital streamers, and 182 with no streamers).

Why AI Isn't Up to Replacing This Digital Job

The creator economy is alive and well, and countless small businesses and individual entrepreneurs pay their bills by making short-form videos appealing to the customer on the street. They project a personalized vibe, trying to connect to viewers in more direct and human ways than how endlessly focus-grouped, big-bucks corporate ad campaigns sometimes land. But AI, which is already impacting the job market, is also encroaching on this career too, with some marketing campaigns using "digital streamers" -- AI graphical characters that act as virtual salespeople on livestreams. If you're an AI skeptic or one of the army of quirky livestreamers who try to help sell products, some new research suggests that these generated content makers are actually terrible at their jobs. Researchers, led by a team from Canada's UBC Sauder School of Business, looked at sales information from one of the world's biggest e-commerce platforms, Tmall (owned by China's giant Alibaba group) and compared the sales of hundreds of products before and after the particular retailer involved switched to using digital streaming salespeople instead of humans, news site TechExplore says. The results were shockingly clear: when a brand relied on human streamers to promote something, it "significantly" boosted sales. But digitally created streamers only slightly boosted sales compared to having zero streaming promotional efforts. In other words, even though AI-powered digital sales streamers can run 24-7-365, won't fall ill and don't need to sleep or take lunch breaks, they're more or less not worth the effort. Fallible, unreliable, quirky human livestreamers? They're great. The researchers did find one way that digital streamers could approach the level of sales boost that using humans achieves: by using super-smart, AI-powered real-time question and answer interactions, which allowed potential customers to feel like they were interacting with someone real. So the question becomes, how long until AI systems are smart enough and reliable enough to pull off this trick, and match the sales boosts that human streaming salespeople can? Nobody knows, of course, but the scientists suggested that one way this will play out in the future is if companies rely on a mix of human and digital salespeople, with the humans stepping in to add a touch of reality or to answer tricky questions the AI can't. Why should you care about this? Because as recent reports suggest, we're actually in what's being labeled the "influencer 3.0" era. The first generation of influencer-based sales saw brands picking popular influencers and paying them to post branded content on the influencer's social media channels. The second phase involved brands adopting creator-produced material and paying to promote it on their own pages and channels. We're now familiar with influencer marketing, so experts say the third phase is where brands have realized that creator-made content can broadly outperform their own branded content, and are using influencer-made material to drive sales pretty much everywhere they can share it. If your company has been tempted to look at influencer marketing, and has toyed with using cheap, ubiquitous AI tech to promote your products, you may want to rethink any notion of using digital streaming salespeople. The paying public just won't fall for it. Meanwhile, if you're an influencer who dabbles with promoting products during live streams, keep at it! Your realness and personality could be key to your business, in an AI era. And lest you think this is a niche issue, the statistics about social media app TikTok and small businesses may change your mind: in 2024, data showed over 7 million small U.S. businesses relied on TikTok, driving billions in revenue. The final deadline for the 2025 Inc. Best in Business Awards is this Friday, September 12, at 11:59 p.m. PT. Apply now.