What: Companies using automation to limit human contact are losing customer trust, while those offering accessible human service stand out.

Why it is important: AI suits simple requests, but customer loyalty is won or lost when problems get complicated, so retailers need to keep human service accessible for those moments.

Customer expectations are rising faster than companies can adapt, according to a PwC study. 70% of executives share this view, and 29% of consumers say they have stopped using a brand after a poor customer experience. Automation falls short when a situation is complex, calls for empathy, or sits outside pre-established scenarios.
Many companies treat customer service as a cost center and make it hard to reach once problems arise. Friendly chatbots sound soothing but rarely solve anything, leaving customers in time-consuming loops. Customers forgive mistakes and delays, but not the feeling of being abandoned. Automation is not the problem in itself, and nearly 16% of respondents say failing to leverage AI most hinders their customer experience.
Companies offering accessible, competent service are standing out again, including with Generation Z, which is best placed to tell intelligent technology from technology used to cut staff. Modern CRMs and AI platforms add value in complex situations by prioritizing cases and coordinating teams. While 70% of respondents want to invest more in AI for customer experience, the aim is to free teams for situations requiring empathy and discernment. Technology lightens the workload, but responsibility for customer relations remains with the company.

IADS Notes: Recent coverage points the same way: customers accept AI in service when a human stays within reach. A Five9 study covered by Customer Experience Dive in July 2026 found that 41% of customers are less likely to use a company that relies on AI for customer service, rising to 53% when there is no option to reach a person. In Journal du Net in July 2026, an article written on behalf of Twilio argued that AI should prepare and support human teams, while people handle sensitive situations, exceptions and decisions requiring trust. The cost of getting it wrong is already visible. Journal du Net in April 2026 linked AI layered onto fragmented CRM systems to customer frustration, with nearly half of French consumers considering switching brands after a negative experience. The Robin Report in April 2026 showed how a malfunctioning Woolworths chatbot can quickly undermine confidence in a brand.

The chatbot trap: why good customer service is once again becoming a competitive advantage