The Streamer Selection Strategy for Live Streaming Sales: Genuine, Virtual, or Hybrid

Live streaming sales rely heavily on streamers, with both genuine and AI-generated virtual streamers gaining popularity. However, these streamer types possess contrasting capabilities. Genuine streamers are superior at building trust and reducing product valuation uncertainty but have limited reach, while virtual streamers excel at broad audience engagement but are less effective at mitigating uncertainty, often leading to higher product return rates. This trade-off creates a critical strategic gap; that is, brand firms lack clear guidance on whether to invest in genuine or virtual streamers or adopt a hybrid approach for their live channels. This study addresses this gap by developing a theoretical analytical model to determine a monopolistic brand firm’s optimal streamer strategy among three options: using only a genuine streamer, only a virtual streamer, or a combination of the two (hybrid approach). The researchers model consumer utility, factoring in uncertainty and the streamers’ differential impact on reach, to derive optimal decisions on pricing and streamer selection. The analysis yields several key findings with direct managerial implications. First, while a hybrid strategy leverages the complementary strengths of both streamer types, its success depends on employing high-quality streamers; in other words, this strategy does not justify settling for inferior talent of either type. Second, employing a virtual streamer requires a moderate price reduction to compensate for higher consumer uncertainty and prevent high profit-eroding return rates. Third, a pure strategy (only genuine or only virtual) is optimal only when that streamer type has a significant cost advantage. Otherwise, the hybrid strategy tends to be the most profitable. Moreover, higher product return costs directly diminish the viability of virtual streamers, making a genuine or hybrid strategy more attractive for products with expensive return processes. The results provide a clear framework for brand firms—that is, the choice of streamer is a strategic decision intertwined with pricing and product return costs. Firms should pursue a hybrid strategy not as a compromise but as a premium approach, use targeted pricing to mitigate the risk of virtual streamers, and avoid virtual options altogether for products with high return costs.