Artificial Intelligence-Powered Digital Streamers in Online Retail: Empirical Insights and Design Strategies from Experiments

Artificial intelligence (AI)-powered digital streamers are transforming live streaming by autonomously interacting with consumers to promote products in real time. Leveraging advancements in AI, virtual reality, and generative AI, these entities combine human-like visual design (form realism) and interactive capabilities (behavioral realism) to enhance consumer engagement. Despite their growing adoption, the economic impact of digital streamers on product sales and the optimal design strategies remain underexplored. This study addresses two critical questions. (1) What is the economic impact of digital streamers on product sales compared with no live streaming at all? (2) In what ways can form realism (visual appearance) and behavioral realism (verbal communication and human-AI interactions) enhance digital streamers’ effectiveness in live streaming commerce? Using a quasi-experiment and a randomized field experiment, we first assess the baseline performance of digital streamers and subsequently evaluate specific design enhancements. Our findings reveal that unlike human streamers, current digital streamers do not significantly boost sales compared with no live streaming. However, incorporating behavioral realism strategies, such as enhanced real-time question and answer (Q&A) and lottery features, increases sales by 25% and 17%, respectively. Human-like voices and improved visual appearances also contribute to sales gains but to a lesser extent. Among all design strategies, only enhanced real-time Q&A enables digital streamers to achieve sales performance on par with human streamers. This research provides empirical evidence on the business value of digital streamers, advances understanding of anthropomorphic design in live commerce, and offers actionable insights for online retailers. By identifying cost-effective design strategies, this study highlights the transformative potential of digital streamers in digital marketing.