This is the seventh year that I’ve compiled a set of customer experience-related predictions for the coming year.

For each article, I gather a set of predictions sent to me in October and November.

Last year, I received 396 different predictions from 208 different people.

This year, the number of predictions submitted and the number of people submitting predictions for consideration increased by 96% and 80% respectively, resulting in me receiving 777 different predictions from 374 leaders in the service and experience space.

I then conduct an anonymised review of the predictions, select the ones that stand out and make the most sense in the current context, arrange them into themes, and add a bit of commentary.

Following my process, I’ve selected 61 predictions and have arranged them around 18 different themes.

Before we get into the predictions, I’d like to take a moment to say that I am over the moon that so many people have taken the time to send me their predictions. And, it’s no small undertaking to whittle them down into what are, I hope, a coherent and useful set of themes and predictions. That being said, I always find the whole process incredibly rewarding and a great learning experience.

So, I’d like to thank all of the people who sent me their predictions.

But I’d also like to apologise to those whose predictions I haven’t been able to include. All I can say is that competition to be included is getting more intense every year.

So, without further ado, here goes with 2026’s predictions:

1. Consumer budgets will remain under pressure in 2026. As a result, shoppers will prioritise practical purchases and those that deliver longer-term value. Sustainability will also be on their minds as long as they don’t have to pay for it. However, many will still indulge themselves, from time to time, to help them cope with the stress of constantly managing their finances.

Michael Podolsky, CEO and co-founder at PissedConsumer predicts that consumer budgets will remain under pressure:

“Tariffs are already adding extra financial strain on consumers’ budgets, especially for households living paycheck to paycheck, leading many to reassess their spending priorities this holiday season. According to this year’s survey conducted by PissedConsumer, 63% of shoppers believe tariffs will impact prices, while 64.9% are concerned about the effect of inflation. By 2026, these financial constraints are likely to continue reshaping consumer spending behavior, driving a more cost-conscious approach to customer experience. Many consumers will prioritize practical purchases over luxury items. Notably, a significant portion of consumers is already adjusting their habits, with 48% waiting for sales and 46.7% shopping earlier than major sales events. As a result, businesses may need to adapt their customer experience strategies by offering discounts, value propositions, and, most importantly, good customer service that meets customer expectations.”

Deborah Honig, Chief Customer Officer at Samsung UK agrees and adds that customers are now also seeking longer-term value when it comes to their purchases:

“Economic uncertainty will continue to shape behaviour in 2026, and customers are already scrutinising purchases more carefully than ever. People want to avoid buyer’s remorse, avoid buying cheap and buying twice, and they are far less willing to invest in products that risk becoming outdated quickly. Value will be defined not just by price, but by longevity, versatility and the promise of continuous improvement.

As a result, products that are genuinely useful – even beyond their primary purpose- will become significantly more attractive.

I believe 2026 will mark a major shift towards brands selling truly connected experiences rather than standalone products.

This level of connection redefines customer experience beyond anything we once expected from a single product. The leaders will be those who ensure their technology adds value long after purchase -integrating meaningfully across the entire customer lifestyle. When spending is under scrutiny, people choose the brands that help them get more out of what they already own.”

According to Iva Filipovic, Senior Experience Consultant at Empathy Lab by EPAM, sustainable buying is still driving many consumer decisions, but only if it is evidenced and they don’t have to pay for it:

“In France, regulators are tightening the rules: higher eco-taxes (up to €10 per item by 2030), ad bans for ultra-cheap products, and stricter disclosures. Yet when Shein opened its first physical store in Paris on Nov 5, 2025, the lines were long, and customers kept coming. The signal is clear: when budgets are tight and the economy is not right, price beats virtue.

But this isn’t ignorance or spite; it’s disillusionment. Customers read the same reports revealing that some very prominent brands score lower on accountability than fast-fashion players, as per the 2024 Fashion Accountability Report. When ethical claims blur, and when both luxury and fast-fashion choices feel wrong, customers turn to what benefits their budgets.

Customers will therefore shop with brands that don’t just preach sustainability or justify it through higher prices. They’ll have to prove it, transparently and accessibly, aligning purpose with price. Expect Digital Product Passports (DPPs) to become a trust currency in this new reality where proof, not promise, drives loyalty.”

Finally, Dreen Yang, Global Industry Lead of Consumer Products & Retail at Capgemini, adds that despite budgetary pressures, many consumers are still spending on premium experiences

“Consumers are prioritizing premium services, like dining, travel, and entertainment, even if it means cutting back on everyday product purchases. They are seeking meaningful experiences and emotional connections. In 2026, this ongoing rise of the experience economy will reframe what success looks like in retail. Early findings from Capgemini’s annual ‘What Consumers Want’ report indicate that small indulgences help people cope with financial stress amidst growing inflationary pressures.    

Retailers are responding by creating authentic, community-oriented brand moments and designing “orbital” offerings that complement and elevate experiences. It could be a travel kit for a weekend getaway or an event-themed bundle.

Retail media networks will become strategic enablers in this environment. Their ability to contextualize offers in real time, based on nuanced data, allows retailers to meet consumers in the moments that matter most. Loyalty will therefore be less about repeat transactions and more about emotional resonance. For retailers, the challenge is to translate products into experiences that consumers will remember and return to.”

Comment:

Consumer budgets have been under pressure for a number of years now, and that is driving many of their purchasing decisions. Despite that, sustainability still remains high on consumer agendas, but that is increasingly being seen as something that is expected rather than as something they have to pay for. Affordability, practicality, sustainability and long-term value are driving the majority of their decisions. But, they are also willing to make trade-offs and splurge on higher value products, services and experiences to help them relieve the drudgery of managing a tight budget. Brands would do well to keep these pressures and preferences in mind if they want to create experiences that resonate with consumers.

 

2. Brands look set to bring the era of ‘free returns’ to an end. Many consumers have been complicit in its downfall, but brands will need to tread carefully if they are to successfully transition to a new system that promotes engagement and loyalty.

Disney Petit, Founder and CEO at LiquiDonate, suggests that a ‘tragedy of the commons’ situation has occurred with respect to returns and predicts that:

“As the economy tightens, consumers and retailers are feeling it. From rocks in boxes to fake return labels, people are getting creative out of desperation: in 2024, 52% of consumers admit to committing some level of return fraud. The brands that will come out on top of this growing issue are the ones investing in smarter systems — image recognition, data sharing, real-time validation — that protect the bottom line without punishing honest customers.”

Petit goes on to predict that leading brands are being forced to rethink their ‘free returns’ policies:

“’Free returns’ were never really free — retailers have just been eating the cost for years to compete with companies like Amazon. By 2026, that illusion will finally collapse. Between labor, logistics, and landfill fees, the economics don’t work anymore and Europe is setting the standard for transparency through regulation. Brands like Nordstrom have already changed policies to restrict free returns to in-store only. Given the enormous reverse logistics costs for returning goods to the warehouse (often $15 or more), the smartest brands are rethinking returns as part of the customer experience — offering exchanges, resale, or donations that feel just as easy, but actually make sense for the business and the planet.”

Meanwhile, Aviram Ganor, General Manager EMEA and APAC at Riskified, predicts that some brands will use their returns policies to reward loyalty:

“Customer service will evolve from enforcing blanket return rules to managing dynamic, data-driven return experiences. Since the pandemic, returns policies have oscillated between too lax and too stringent, struggling to find the happy balance between profitability and customer satisfaction – a worthwhile feat, considering total returns for the retail industry are projected to reach $849.9 billion in 2025 according to the NRF. In 2026, returns will become more finely tuned through the use of AI-powered and data-driven processes. Utilising machine learning, merchants can assess intent and trustworthiness in real time, approving instant refunds for valued customers while flagging risky behaviors – including reselling, promotion exploitation, and loyalty point theft – without friction. Returns will no longer be a back-office process but a frontline loyalty driver, turning what was once a cost center into a critical moment for building trust and repeat business.”

Comment:

While the NRF provides US data only, its research illustrates the scale of the returns problem that retailers face. Further, its research shows that 19.3% of all online sales in 2025 were returned. That proves a significant logistical and cost challenge for retailers. However, their research also shows that 82% of customers say that a retailer’s returns policy is an important factor in their buying decision, and 71% say that a poor returns experience will mean that they don’t return to that retailer. Therefore, retailers need to tread carefully when changing their returns policies as it may have not only purchase but loyalty implications.

 

3. AI-powered search tools are reshaping how consumers shop. Agentic commerce will deepen that shift, but traditional SEO and marketing, as well as local presence and data, still have a role to play.

Tara DeZao, Senior Director of Marketing at Pega, predicts that things are changing:

“AI-powered search tools are actively reshaping how consumers access brand info. There continues to be mass confusion about this transition, marketers need to find that sweet spot where they are keeping parts of their search business as usual, while they also test and learn in the new world. This will look different across regions and industries. In 2026, marketers will need to find the balance between optimizing for agentic search and AI-generated summaries and traditional SEO or paid channels. Brands must now consider marketing to machines as well and incorporate a Business-to-Agent-to-Consumer (B2A2C) model. As AI-driven search engines evolve into answer engines, brands that fail to train their data and language for agentic discovery risk being excluded from the digital conversation altogether.”

Ian Kahn, Principal, Commercial & Service Excellence Platform Leader, at PwC, concurs and adds:

“By 2026, we’ll start to see the rise of what we call agentic commerce, where AI agents act on behalf of consumers to compare products, manage subscriptions, and even make purchases. When that happens, the real competition won’t be about ad clicks or sleek interfaces anymore. It will be about which brands can earn the trust of those agents. Companies will need to prove their value with transparent data, verifiable product quality, and experiences that hold up under algorithmic scrutiny.”

According to Deann Evans, Managing Director, EMEA at Shopify, says all businesses will need to adapt:

“AI tools, such as personalised shopping assistants and chat functions, are fundamentally reshaping how consumers shop.

Our 2025 Holiday Retail Report consumer appetite is already strong among consumers; nearly two-thirds (64%) are likely to use AI for tasks like finding deals and discovering products this holiday season.

Over nine in ten (93%) UK business decision-makers say they’re already or planning to invest in AI to help customers discover or buy products through shopping assistants. They’re also exploring how to make their businesses more efficient, with 44% prioritising AI-driven personalised product recommendations, 50% to help them generate content such as product descriptors faster, and 41% are automating customer support.

In 2026 the focus will shift from adoption to strategic integration. The most successful merchants will use AI to scale their business, removing internal and external friction points to make the buying journey seamless and personal for shoppers that builds trust, anticipates their needs and drives loyalty.”

But, Jared Norris, Chief Customer Officer at Chatmeter, adds an important dimension and predicts that local market data will still matter:

“The hype will die down around AI and generative engine optimization, also known as AEO and GEO, as marketers realize there’s no magic trick, and that traditional SEO and marketing best practices still apply. For example, Google recently launched a feature enabling AI developers to contextualize outputs with Google Maps data. For brands looking to reach consumers in local markets, keeping every local listing up to date, and shaping positive customer feedback through great experiences and encouraging reviews, will remain the gold standard for AI visibility.”

Comment:

The French novelist Jean-Baptiste Alphonse Karr is quoted as saying, “The more things change, the more they stay the same.” I wonder if this is what’s happening here. Undoubtedly, AI-powered search tools and agentic commerce are set to have a profound effect on consumer behaviour, but how consumers find things, particularly local things or things in areas that they are not familiar with, navigate to places, make and review choices will still rely on both good old SEO and local data.

 

4. In-person shopping and experiences will become increasingly popular as consumers tire of digital channels and seek connection and meaning in real places and experiences.

Gwen Hammes, Co-CEO at Cro Metrics, predicts that as consumers tire of digital channels, brands that create in-person experiences will stand out in an increasingly AI-saturated and automated market:

“As AI-generated content saturates digital channels, in-person moments and authentic human experiences will become massive differentiators in marketing. A third of consumers are predicted to opt for offline over online brand experiences in 2026, driven by desires for richer sensory interactions that digital channels cannot replicate [Source: Forrester’s Predictions 2026.]. Brands that create genuine, physical touchpoints and real human connections will stand out in an increasingly automated market. The scarcity of authentic, non-AI-mediated experiences will drive their value upward, making them powerful tools for building trust, loyalty, and emotional resonance that AI cannot replicate. This countertrend is already measurable: 50% of consumers are expected to abandon or significantly limit social media due to perceived quality decay, misinformation, and bot proliferation, forcing them to seek authentic interactions elsewhere [Source Gartner Predicts 50% of Consumers Will Significantly Limit Their Interactions with Social Media by 2025].”

Sam Richardson, Executive Engagement Director, EMEA & APJ at Twilio, concurs and adds:

“More brands will continue to embrace analogue as a new ‘luxury’ “2026 will be a year we’ll see a recalibration towards digital supporting the physical, and not the other way round. The importance of physical spaces has only continued to increase, as many of us seek community, human interaction and trust away from the digital realm. Alongside many successful examples from the retail industry, we are also seeing banks open new kinds of branches that are geared more towards conversations and advice, rather than just transactions. The hospitality industry, meanwhile, is carefully embracing variety and novelty to keep customers coming back. Analogue is not only the new luxury, but is what growing numbers of distracted, burnt out customers are looking for. Whether it’s hosting events, launches, or exclusives, what all these initiatives have in common is they bring people together, coordinated through smart use of digital technology that doesn’t create barriers.”

Dave Charest, Director of Small Business Success at Constant Contact, predicts this could offer an opportunity for local businesses:

“Online spaces are only getting louder. Feeds are crowded, ads are everywhere, and genuine connection feels harder to find. That’s why I believe we’ll see more people seeking face-to-face experiences again.

Consumers will crave connection with real people in real places. Local businesses have a huge opportunity here. They can become gathering spots where people come not just to buy but to connect.

The businesses that win will be the ones that think through every part of that in-person experience. What does it feel like when someone walks through your door? How are they greeted? What makes them want to come back or tell a friend?”

Comment:

This is not a surprising trend or prediction. Is it? It feels like a natural reaction by a consumer base that has over-indulged at the digital buffet, encouraged in no small part by brands and technology platforms, and now wants to try something different and something that feels very different and, funnily enough, innately human.

 

5. The tiring of digital and the desire for connection will also drive the emergence of new types of communities.

Rateel Alshehri, Founder at Podcast Rateel Alpha Talk , predicts that:

“The future isn’t about having the biggest audience it’s about building a community that actually cares. Young people want spaces where they can belong, share ideas, and feel seen. They don’t want to just listen; they want to be part of the conversation. In 2026, the most impactful experiences will be the ones that create connection, not just attention. Community will become a strategy, not a side effect.”

Michelle Baltrusitis, Head of Community & Social Impact at Fiverr, concurs and adds:

“At the same time, we’ll see a shift from ‘brand-to-customer engagement’ toward ‘customer-to-customer ecosystems’, where peer-led communities drive trust, advocacy, and belonging. In this future, the most trusted answers won’t come from help centres, but from real people sharing authentic experiences. As such, in 2026, CX won’t be fully automated, it will be defined by powerful technology that is guided by human community and creativity.”

Comment:

I like the line from Rateel Alshehri’s prediction: “Community will become a strategy, not a side effect.” The idea of creating customer communities to help encourage collaboration, innovation, and drive engagement and loyalty has been around for a long time. However, it has been too often a “side-effort,” not a “side-effect,” and definitely not a central part of strategy. As a result, many community efforts have faltered as they struggled to maintain participation and engagement. To make a success of a community where customers, particularly younger ones, feel seen, heard and respected, then brands are going to have to give up some control as a starting point if they are to encourage and enable the co-creation, collaboration and belonging they desire to create.

 

6. Expect to see a rise of AI-free and/or human-only services and experiences. However, don’t be surprised if you have to pay more for them.

Dan Hartman, Director of CX Product Management at CSG, suggests we will see the emergence of AI-free experiences and goes on to say that some brands will use this as a bragging point when he predicts:

“Some brands will flip the script and start touting human-only experiences as a premium offering. It won’t be about rejecting the tech. Instead, it will be an effort to reclaim trust, control and clarity, especially in industries where nuance and empathy matter most. For these brands, not using AI will become a differentiator. This shift won’t take years to emerge; it will happen sooner than people (and Gartner) think.”

But, the reality is that anything touted as human-only or AI-free is likely to come with a higher price tag, according to Martin Taylor, Co-Founder and Deputy CEO at Content Guru, when he predicts:

“We are likely to see a rise in tiered CX, where speed and human access become premium features. Just as low-cost airlines now offer optional upgrades, from priority boarding to luxury hotel partnerships, so digital service providers will offer tiered experiences: frictionless automation for everyday queries, and paid, human-led service for those who value immediacy and empathy, in line with services already being offered by some neobanks and online-only insurance brokers.

Currently, most consumer-facing businesses are typically either budget or luxury, but the versatility of CX will allow them to offer something more nuanced to a wider range of people and benefit from the returns, enabled by AI and humans working together, to deliver great experiences with enviable efficiency. Businesses that master this new hybrid model will capture the widest audience in an increasingly impatient market. More importantly, they will help reframe human connection as a premium offering, proving that empathy and expertise remain valuable commodities, even in an automation-first world.”

Comment:

Is this surprising? I don’t think so. But I’m not sure how customers will react. Remember how consumers reacted when EE, one of the largest telecoms firms in the UK, back in 2014, introduced a new feature, called Priority Answer, that allowed its customers to pay £0.50 ($0.81) to jump the queue on customer service calls. The introduction of the service created uproar among its customers and a huge amount of negative press attention. So, how consumers will react to potentially having to pay more for human-only experiences, particularly when many of them still report that they prefer to speak to a fellow human being when they have a problem, only time will tell.

Watch this space!

 

7. AI slop is already here, but it is set to get worse. That will undermine customer trust until brands start designing for outcomes, not output.

Darrell Heaps, Founder and Chief Strategy Officer at Q4, predicts that:

“We talk a lot about how AI can scale personalisation and productivity, but what happens when it starts scaling confusion instead? In 2026, a rising volume of low-quality AI output, or “AI slop,” will put customer trust on the line.

AI slop looks smart but isn’t. Think reports, chatbot replies and email copy that sound polished but fall apart under scrutiny. It’s being fuelled by an explosion of content inside organisations, because AI makes it easy to produce more, faster. But just because you can generate a 20-page report or spin up a slick-sounding document no one asked for, that doesn’t mean they’re helping. More content doesn’t equate to more value.

Customers are on the losing end. They feel it, and they’re confused by inconsistent messaging, vague explanations, and a creeping sense that no one’s really in control of the facts. But in customer experience, credibility is everything. When something is 90% right and 10% wrong, it’s 100% untrustworthy. So, AI slop sends customers searching for second opinions or straight to a competitor.

And it’s not just customers who pay the price. Internal teams get bogged down too, buried in AI-generated content they have to review, rewrite and realign. Instead of speeding things up, it adds friction to workflows, slows execution, and stands in the way of true productivity gains.

This problem will likely get worse before it gets better. But the trend will hit a breaking point. Customers will reward brands that prioritise clarity and value over volume, and trust over total automation. The companies that come out ahead will use secure AI that understands their domain, designs for outcomes (not just output), and keeps humans in the loop.”

Christoph Fleischmann, Founder at Arthur, adds that it’ll not only have an impact on trust but may also hinder innovation and drown out good ideas when they predict:

“AI-generated ‘slop,’ content that sounds smart but lacks substance will become one of the biggest challenges of 2026. As generative tools make it easy for anyone to produce endless ideas and commentary, true innovation risks being drowned in noise.

This ‘work slop inflation’ will force enterprises to focus on quality over quantity,  using AI not to make workflows faster, smarter, and more meaningful.”

Comment:

It might be easier than ever to generate content, and the power of AI-powered tools available to brands and internal teams is beyond doubt. But we must recognise that there may be unintended consequences of this new power, and just because we can doesn’t mean we should. More does not always mean better.

 

8. Voice AI technology has improved markedly over the last two years and is set to go mainstream in 2026. But, despite its efficacy, there’s no guarantee that everyone will like it, and many will still insist on speaking to a fellow human being.

Jeff Fettes, CEO at Laivly, predicts that voice AI will go mainstream:

“After decades of IVR frustration and endless “press zero for an operator,” AI-driven voice has finally figured it out. Early adopters proved it could hold natural conversations, resolve complex issues, and even complete transactions. In 2026, that success will go mainstream. Major brands will roll out agentic voice systems that can understand context, perform actions, and hand off to humans only when necessary.”

Dan Michaeli, CEO and Co-Founder at Glia, adds that it could have a massive impact on the contact centre when they predict:

“2026 will mark a fundamental reinvention of the contact center as voice AI reaches human parity and ushers in the era of ‘virtual labor.’ Think of it like having the perfect partner at work — AI handles the routine stuff, like answering common questions and filling out wrap-up surveys, while human agents focus on the emotional situations that need that personal touch. Phone calls still account for 65% of all customer interactions, and so much of that capacity could be contained by virtual labor. This means faster service, less stressed human agents and big savings for organizations that can eliminate costly after-hours support while reducing expenses related to agent attrition.”

But, St John Dalgleish, CEO at Perlon AI, warns that, despite its efficacy, there is no guarantee that customers will like it:

“Voice AI gets great, and people still hate it (so “Human-at-Hello” becomes a thing). By 2026, sub-250ms voice bots handle accents, interruptions, and empathy cues with eerie fluency. NPS improves on simple calls, but a stubborn cohort still loathes “talking to a machine,” especially for money, health, or blame-laden issues (refunds, outages, fraud). The result is a hard bifurcation. Brands add a prominent “Human-at-Hello” toggle, and tie bonuses to successful human handoffs, not containment. Regulations mandate explicit disclosure and an always-available human escape (e.g., say “agent” once).”

Comment:

The potential impact of Voice AI on customer service is vast, particularly when a customer’s query is simple or when their situation does not lend itself to a text-based medium. Given the advancements in the technology that have been made, many customers will embrace Voice AI as an easy way to resolve their queries. After all, it’s easier and quicker to talk than it is to type.

But some customers will still resolutely prefer to talk to someone regardless of the type of their query. And that is their right.

Brands need to be cognisant of the reality that if they automate too much and ignore customer preferences, they risk alienating customers and ultimately losing them.

For some, that will be a price worth paying.

For others….?

 

9. Leading brands will shift their focus from experimentation with AI to using the technology to drive improved customer, employee and customer outcomes.

Assaf Melochna, President & Co-Founder at Aquant, predicts that brands will get laser-focused on outcomes when it comes to AI:

“Companies are deploying a wide range of new AI tools to help with customer service, but too often these tools often don’t work well together or are managed poorly. As a result, businesses end up with confusing systems that fail to deliver meaningful results. In fact, Gartner predicts a massive 40% of Agentic AI projects will be canceled by the end of 2027. Looking ahead to 2026, I believe the focus will shift from simply deploying AI to deploying with purpose, ensuring each tool has a clearly defined role and is solving for a specific challenge, is effectively managed, and is measured by real outcomes. This way, companies can move past the buzz and get laser-focused on enhancing the reliability and quality of their AI.”

Graig Paglieri, Chief Executive at Randstad Digital, adds that the approach of leading players is likely to become increasingly sophisticated and predicts:

“By 2026, AI’s role will pivot from a cost-saving tool to the primary engine of customer loyalty and revenue creation.

The market is bifurcating. A small vanguard of “future-built” organizations (estimated at only 5%) are successfully generating significant value from AI at scale. The majority (60%) are reaping minimal gains. The difference is a shift in strategy. By 2026, leading companies will stop measuring CX AI on deflection rates and start measuring it on its ability to drive Customer Lifetime Value (CLV). Investment will pivot from simple chatbots to sophisticated “orchestration engines” that create personalized solutions, proactively generate tailored recommendations, and empower human agents with real-time intelligence.”

Comment:

Most people familiar with this space will have come across the recent study published by MIT’s NANDA initiative, which found that only 5% of AI projects were delivering significant value. Two other studies, from IBM and Accenture, which were more robust in my opinion, didn’t paint such a gloomy picture, but they both found that the majority of organisations have struggled to scale and generate significant value from their AI investments. That will change as organisations and leaders learn more about the technology and what it takes to deliver improved outcomes.

 

10. This will be accompanied by increased pressure on CX and AI investments to demonstrate a clear RoI.

Martin Taylor, Co-Founder and Deputy CEO at Content Guru, predicts that:

“2026 will be the year when AI needs to prove its value through measurable Return on Investment (ROI), rather than artfully scripted demos, unsubstantiated claims and exciting predictions about the worlds of 2028 or 2030. Valuations in 2025 soared from an already inflated start to wildly unsustainable heights, with global stock indices distorted by a handful of AI stars, some of them fueled by revenues bulked up through cross-subsidizing investment strategies that recalled the vendor financing of an earlier era.

Inevitably all this has brought matters to a point where anything that happens in AI is magnified: both success and failure. In the latter part of 2025, the appearance of critical reports such as MIT’s State of AI in Business, with its assessment of a 95% failure rate for Gen AI pilots, began setting the market’s animal spirits on edge.

As investors increasingly demand tangible economic returns from the trillions of dollars wagered on AI, reality will bite. The AI boom will experience a major correction, probably in the second half of the year, and when it does, there will be a severe and widespread hangover. Just as the dot-com crash, a quarter of a century ago, wiped out ideas whose time had not yet come, or would never come (remember the heavily-backed idea that photo booths would become mini-internet cafés?) but rewarded the survivors disproportionately, so AI’s correction will expose flaky edge cases that attracted high valuations but which could not deliver real-world results. Conversely, those companies able to demonstrate real, measurable AI outcomes will weather the short-term turbulence and emerge stronger.

Across industries, leaders will be under pressure to show where AI and intelligent automation are genuinely transforming processes and improving outcomes. Unlike most other areas of business, the Customer Experience (CX) department has the foundations already laid to make AI work, with people, processes, and data already optimized and ready to receive AI. When the dust settles, CX will come to be recognized as one of the few places where AI’s early promise survived the ‘trough of disillusionment’ intact – a pathfinder for other sectors seeking to implement AI effectively.”

Russ Fradin, CEO at Larridin, concurs and predicts that:

“By 2026, the hype around AI will be focused on the value this tech is delivering, and companies will need to prove ROI on these investments. For CX-related AI applications, it won’t be any different. Now, CX-focused teams need to move from experimenting to optimizing, and only those that track usage, measure outcomes, and share AI tools internally will gain the biggest visibility. The successful organizations will not have the most expensive AI, but the ones able to maximize the value they capture from the AI they already use.”

Elizabeth Maxson, CMO at Contentful, adds a refinement concerning marketing teams:

“In 2025, marketing teams poured time and budget into AI, eager to understand its potential. In fact, 65% of CMOs made meaningful investments in AI tools. But 2026 will be the year of proof, not promise. Marketers will be expected to show tangible ROI: sharper personalization, faster content creation, and measurable growth. The difference will come down to clarity of purpose – those who define clear goals for what AI should solve, build strong data foundations and integrate AI across workflows will move beyond experimentation and into impact. Teams that treated AI as a side project will find themselves lagging behind.”

Whilst Nick Clark, Partner & Director, Customer Service Excellence at Boston Consulting Group, predicts that, in addition to the drive to deliver RoI, more focus will go into employee enablement and change management to help facilitate that:

“AI investment in customer service will continue. From a recent BCG survey of 150 CxOs, 87% intend to invest more in customer service AI in 2026. But we expect to see companies be far more discerning in how they spend that money, focusing on a smaller number of AI capabilities that offer proven return on investment and allow for clear differentiation of customer experience. A smaller proportion of the investment will be on the tech itself, balanced by increased investment in employee enablement and change management capabilities to get the best results from AI.”

Comment:

The pressure for brands to prove the RoI of their CX initiatives has become a perennial thing in recent years. The advent of AI provided some respite as brands clambered to adopt it to feel they were keeping up with competitors. However, so much time and money have been invested in the last couple of years that 2026 feels like the year when the honeymoon period will come to an end. That doesn’t mean that investment in AI will stall. On the contrary, it will continue as consumer expectations rise and competition intensifies. However, firms will focus their efforts and investments on areas that are more likely to produce a demonstrable return. That may make the job of CX leaders somewhat more difficult, but the focus and requirement to prove relevance and value is welcome.

 

11. Expect to see an increased use of SLMs, particularly in industries where trust and compliance matter just as much as speed and scale.

Ervin Jagatić, AI Business Unit and Product Director at Infobip, predicts that:

“A shift toward small language models (SLMs) has been flying under the radar. In 2026 it is set to move into the mainstream, powering the AI agent revolution.

Unlike large language models (LLMs), such as OpenAI’s Chat GPT, SLMs are compact and domain-focused. This makes them cheaper, faster, and easier to fine-tune for specific tasks, without sacrificing performance.

Enterprises are finding that smaller, more specialised AI models can solve many of the challenges posed by LLMs. SLMs can be deployed on standard hardware (even on-premises) and trained on proprietary data, ensuring privacy and relevant responses. Research shows that an AI support bot running on an in-house model, fine-tuned to a company’s products and policies, can outperform a generic large model in accuracy and compliance.

By the end of 2026, many CX teams will leverage these tailored AI models – or orchestrate multiple models – to efficiently power thousands of AI agents at scale.”

Rafee Tarafdar, CTO at Infosys, adds:

“Everyone’s talking about large language models, but in 2026 we’ll see a combination of large and specialized models tailored for specific industries. Unlike general-purpose LLMs, these models will be trained on proprietary organizational data and hence more accurate, easier to govern, and less prone to saying things they shouldn’t. That’s a big win for industries like financial services or healthcare, where trust and compliance matter just as much as speed or scale.”

Comment:

This is a return of a prediction that first emerged in the 2024 predictions. Now, as then, deploying these types of models is likely to go a long way towards minimising many of the risks associated with LLMs, particularly from industries that are heavily regulated. That’s a good thing, and so I’m looking forward to hearing how this plays out in practice and, in particular, how their use is impacting those all-important outcomes.

 

12. Leading brands will realise that their loyalty programmes are no longer fit for purpose and will shift away from points-based programmes to more of a whole business approach.

George Korizis, Principal, Customer & Enterprise Strategy at PwC, predicts that many brands will abandon their traditional loyalty programmes:

“Loyalty programs won’t save a broken experience. By 2026, the best ‘points’ you can offer are time saved, problems solved, and high-quality experiences. Companies will need to abandon the ‘loyalty illusion’ and recognize that traditional programs are failing, especially when nearly half of executives already believe their programs will be irrelevant within three years.”

Max Votek, Managing Partner at Customertimes, agrees and predicts a shift away from traditional points-based programmes:

“In 2026 marks brands will change their approach to cultivating loyalty. There will be a quieter, more anticipatory way to build relationships instead of traditional point-based programs, which have been criticized for a long time for being hard to understand and not giving much in return.

The most successful companies will bet on invisible loyalty, which means making consumers feel valued not because they get rewards, but because the brand makes things easier for them before they even see it.

AI systems will become better at detecting signs of possible dissatisfaction, such as delays in shipment, a payment error, an expiring subscription, or a product compatibility issue, and fixing them before they occur. Additionaly, automatic benefits, like early entry, personalised adjustments, and easy replacements, will be given to customers based on predictive modelling instead of formal membership tiers.”

Paul O’Sullivan, UKI CTO at Salesforce, adds that much of this change will be driven by the behaviour and preferences of younger shoppers:

“Loyalty is shifting quickly. Younger shoppers switch brands more often, so retailers are expanding beyond traditional perks to offer richer, more personalised experiences. AI is playing a big role here. Agents can tailor recommendations in the moment, avoid blanket discounts, and even turn returns into loyalty-building moments by identifying fit issues and guiding replacements.

Early adopters, especially in luxury and specialty retail, are proving the impact: adaptive agents are lifting conversion, improving order value, and strengthening loyalty while lowering costs. As margins tighten, loyalty programs will become platforms for deeper, long-term customer relationships, powered by more relevant interactions at every touchpoint.”

Finally, Zsuzsa Kecsmar, Co-founder and Chief Strategy Officer at Antavo, predicts that leading brands increasingly view loyalty as a whole business methodology rather than just a tool:

“In 2026, the diversification of loyalty strategy will become one of the most important trends in the D2C landscape. While customers join loyalty programmes primarily for financial benefits, brands can no longer rely on just points or discounts to secure repeat engagement. Certainly not if margin and profitability is to be protected. Loyalty must be earned constantly through experiences that feel meaningful, and brands that provide exclusive access, genuine recognition, and value beyond price will lead.

The Antavo Global Customer Loyalty Report shows that brand marketers and customers are not aligned on what creates true value, so businesses must identify what resonates. Loyalty programmes will increasingly deliver emotional moments that bridge daily transactions with the brand’s bigger promise’ and unify online and offline data for an omni-channel view of the customer.

AI will play a quieter but crucial role behind the scenes—helping businesses interpret their customer data and spot behavioural patterns. However, another key trend is that loyalty fuels AI readiness. The rich, consented data from loyalty programmes forms the bedrock for any data-driven AI initiative. Only then can brands use AI to analyse and guide the next best step.

The brands that lead in 2026 will be those who invest in true value, who view loyalty as a methodology not a tool. It means meeting customers’ expectations with authenticity, consistency, and experiences that feel truly worth choosing. In a world of infinite choice, loyalty must be earned every day.”

Comment:

Research from Medallia and Ipsos, earlier this year, found that 97% of CX practitioners agree that customer loyalty is critical, and nearly 90% of them believe that loyalty will increase in importance as a business metric in the future. That’s not surprising when you consider the economic conditions that many consumers have had to navigate in recent years. When you couple that with the fact that many brands believe that their traditional loyalty programmes are increasingly not fit for purpose, then it’s not surprising that we are seeing the emergence of a more holistic business approach to loyalty. That is long overdue.

 

13. ‘How do I know I can trust your AI?’ will be a defining question in 2026. Brands will respond to consumer trust issues by making transparency and governance central to their trust-building efforts, which will be helped by the emergence of trust ‘proof points’.

Chris Sander, Head of EMEA Sales at Vanta, predicts that some brands in their rush to implement the latest AI tools are putting customer trust and their own reputation at risk:

“In an AI-saturated world, trust will be the true currency of customer experience. But trust doesn’t come from chasing the latest tools to stay competitive, it is grounded in a foundation of security, transparency and compliance. And that’s where most companies are falling down. Our 2025 State of Trust report finds business leaders are diving headfirst into AI, with 8 in 10 UK business leaders currently using AI agents, or planning to in the next 12 months. But the AI usage doesn’t match their understanding, with nearly two-thirds (61%) saying their use of agentic AI outpaces their grasp of it and only 46% have guardrails in place to manage the technology. It’s a massive safety blind spot, threatening both customer trust and brand reputation. In 2026, companies that take shortcuts on security in the name of speed will pay for it in churn. The best CX will come from companies that treat trust like a product – building systems that make it easy to prove trust, even when everything else is moving fast.”

Olivier Jouve, Chief Product Officer at Genesys, concurs and adds:

“In the age of AI, transparency will become the new currency of trust. As agentic AI systems gain autonomy, the way organizations demonstrate accountability will define their credibility. Just as ESG redefined corporate responsibility, agentic transparency will reshape how organizations are judged by customers, employees, regulators and society at large. Genesys research reveals a widening trust gap: 80% of consumers surveyed expect clear AI governance, yet only 31% of CX leaders surveyed have comprehensive oversight. As thousands of AI agents act and collaborate across enterprise ecosystems, transparency must scale from individual models to interconnected networks. Growing regulatory scrutiny will demand proof that autonomous systems operate ethically and comply with emerging AI legislation and align with human and organizational values. Enterprises will need to disclose who their AI agents are, what they’re authorized to do and how they decide. Governance will evolve into a living framework that is explainable, auditable and accountable by design. The most advanced organizations will establish guardrails that ensure compliance with AI legislation while preserving innovation and agility. Forward-looking leaders will treat transparency not as a compliance checkbox, but as a strategic advantage by embedding trust and integrity into every decision loop. By turning responsible AI into a core operating principle, they will transform compliance into confidence and trust into lasting competitive strength.”

As a result, Max Schwendner, Co-CEO at Alorica, predicts that trust and governance will become key differentiators for leading brands:

“In 2026, trust will overtake technology as the true differentiator in CX. As AI drives more customer interactions, transparency around how it makes decisions will become non-negotiable. Customers will expect clarity—how data is used, how accurate it is, when humans intervene, and how bias is prevented. The most successful brands will treat AI governance as a competitive advantage, building loyalty through openness, accountability, and explainable automation. In the age of intelligent systems, trust is the new experience metric.”

Derek Slager, Co-Founder & CTO at Amperity, agrees and adds:

“As AI influences nearly every touchpoint, trust will become the ultimate differentiator in customer experience. The most admired brands will show customers how their data is used, not just claim that it’s protected. Transparent lineage, consent tracking, and explainable AI will give consumers confidence that personalization serves their interests, not just the brand’s. The most advanced experiences will also be the most accountable.”

Jeff Fettes, Founder and CEO at Laivly, agrees but also predicts that trust proof points like ‘Responsible AI’ labels on websites will start to emerge:

“As AI takes on sensitive roles in healthcare, banking, and retail, 2026 is the year CX leaders realize that governance is experience. Customers will judge brands not just by how fast or friendly their AI is, but by whether they feel safe letting it make decisions. Expect to see “Responsible AI” trust labels on websites, audit dashboards in vendor contracts, and CX teams adding transparency and explainability to their KPIs.

Forrester already predicts that a third of brands will erode customer trust through poorly implemented AI self-service next year—a warning shot that trust has become measurable.”

Nik Kale, Principal Engineer, CX Engineering at Cisco Systems Inc., agrees but expects that customers won’t be satisfied with trust badges but will want transparency at every AI-driven interaction:

“By 2026, the most powerful differentiator in customer experience will be trust transparency—how visibly secure, verifiable, and explainable every AI-driven interaction is.

Customers will expect provenance badges, audit trails, and “explain this action” buttons for AI outputs.

Enterprises adopting digital provenance and pre-emptive cybersecurity will turn compliance frameworks into brand assets, showing not just what their AI can do, but what it won’t.

As Gartner notes, “products lacking pre-emptive cybersecurity will lose market relevance by 2030.” CX leaders that build trust-as-a-feature into their experiences will redefine customer confidence and loyalty.”

Meanwhile, Peter Galvin, Chief Growth Officer at NMI, goes further and expects that AI trust ratings will emerge:

“Over the next year, consumers will also become more willing to trade personal information for the speed and convenience that come with this new era of commerce. Shopping experiences will feel effortless and tailored to each person with every transaction invisible. But trust will be the deciding factor. People will only share data with brands, platforms, or AI tools that prove themselves credible. How much they share will differ: some will freely hand over their personal details, while others will take a more selective approach, similar to Apple’s hidden email feature, just on a much bigger scale.

Younger generations are already leading the way. Gen Z has grown up sharing data across TikTok, Instagram, and countless apps, and they’re comfortable doing so as long as they can control or revoke access. That mindset will shape a new privacy economy built on transparency and user control, defining how consumers and technology interact.

Trust itself will become something you can measure. Just as people look at restaurant reviews on Yelp or movie ratings on IMDb, they’ll check ‘trust ratings’ to decide whether a brand or AI deserves their personal data. The companies that can demonstrate transparency, deliver value and earn trust will become the go-to choices.”

Comment:

The possibilities that AI-powered technology offers businesses today are without question. However, recent research from Edelman shows that acceptance of AI by consumers is at a crossroads, with rejection of AI currently outweighing enthusiasm.. Their research also shows that the more they trust AI, the more likely they are to embrace it. Therefore, providing transparency about how it is used, where it is used, and how decisions are made will go a long way toward building trust with consumers. Industry proof points and peer-based trust ratings are likely to help, but they will take time to develop.

 

14. Brands will move beyond static personalisation to an approach that is driven by context, powered by a converged data ecosystem, all while securing customer trust by allowing them to explicitly control their own settings and preferences.

Mark Waks, Senior Managing Director of Customer Experience at Slalom, predicts that contextual personalisation will emerge as the leading strategy in 2026:

“If you thought personalization was just using a customer’s name in an email, think again. In 2026, Contextual Personalization 2.0 is about tailoring experiences in the moment, based on where someone is, what they’re doing, and what matters to them. It’s the fusion of geolocation, behavioral data, and psychographics to deliver offers or content so relevant that it almost feels like a helpful coincidence. The technology to do this has matured with widespread smartphone sensors and AI analytics. Today, location-based messages often get ignored or rejected because they’re poorly targeted (“I got an ad for a burger joint but I’m a vegetarian – ugh”). The new frontier is layering deeper data on top of location. For example, not just knowing someone is in a mall, but also that they have a history of fitness purchases and are health-conscious – so you send a promo for the athletic wear store and maybe a reminder that the juice bar has a discount today. This moves beyond “right place, right time” to layer on the right mindset. The best will do it in a way that feels like a service rather than an intrusion: “Your flight’s delayed – here’s a voucher for a nearby lounge since you’re stuck at the airport.” It’s a high bar, but those that catch customers at the perfect moment with the perfect offer will win a larger share of love and wallet.”

Billy Luedtke, CEO & Founder at Intuition Systems, concurs and adds:

“For years, personalization has meant using customer data to tailor offers or messages—your name in an email, your past purchases in a recommendation carousel. But in 2026, that static approach will feel primitive. The next generation of customer experience will be contextual, not just personalized.

That means real-time, adaptive engagement—brands that sense where you are, what you’re doing, and why you’re doing it. Imagine a retail app that shifts its tone based on whether you’re browsing in-store or ordering from an airport lounge, or a hotel that adjusts its check-in experience depending on your flight delay. It’s a shift from “you bought this, so here’s that” to “you’re in this moment, how do we best serve you?”

The opportunity is enormous—but so is the risk. As consumers grow more sensitive to surveillance and “algorithmic creepiness,” the brands that win will be those that balance intimacy with respect. In 2026, context without consent will kill trust. The brands that master context and boundaries will redefine what personalization means.”

Sidharth Ramsinghaney, Director of Corporate Strategy at Twilio, predicts that zero-party data will play a key role in helping brands get it right as well as helping build customer trust:

“In 2026, customer experience will pivot from generic AI applications to deeply personalized, consumer-directed interactions. As our research shows, 84% of consumers want to adjust their own personalization settings. Brands will move beyond one-size-fits-all AI to provide transparent, customizable AI experiences where customers have explicit control over data use and personalization depth.”

While other brands will opt to build brand-to-brand data alliances to improve their personalisation efforts, predicts Tara DeZao, Senior Director of Marketing at Pega:

“Data collaboration will become the new competitive advantage. As third-party data utilizations fade into the background and privacy regulations tighten, marketers will no longer be able to rely on rented insights. Instead, 2026 will usher in an era of brand-to-brand data alliances, partnerships built on shared first-party insights that allow companies to see the customer through a richer, more multidimensional lens. Think airlines teaming with streaming services or retailers with fitness brands. These alliances won’t just create smarter targeting, they’ll redefine customer intimacy, allowing brands to meet people wherever they are in their journey, both online and off.

The future belongs to brands that share responsibly and personalize meaningfully, those that recognize loyalty isn’t built at the point of conversion, but in the relationship that follows. In 2026, customer retention will be the new growth metric, and collaboration will be the key that unlocks it.”

Where the data sits to power contextual personalisation is up for grabs, with Michael Ramsey, GVP, Product Management, CRM & Industry Workflows at ServiceNow, predicting that CRM will play a bigger role:

“Intelligence becomes connective tissue of every customer moment: In 2026, CRM will move from a static system of record to a dynamic system of action where intelligence will stop living inside isolated tools and start connecting every customer moment. Each conversation, transaction, and interaction will add context that makes the next one smarter; not just for a single team, but for the entire organization.

CRM will be expected to link these insights in real time. When sales closes a deal, marketing learns which messages landed. When service resolves an issue, product and operations adapt instantly. Every function will draw from the same continuously expanding understanding of the customer. This is how companies will finally move beyond fragmented experiences. Intelligence will no longer sit in reports or dashboards; it will circulate through workflows, guiding decisions as they happen. The result is a business that learns as fast as its customers move.

The companies that lead in 2026 won’t just use AI to predict behavior. They’ll use it to connect people, teams, and actions around what the customer needs next.”

Meanwhile, Derek Slager, Co-Founder & CTO at Amperity, predicts a bigger role for CDPs:

“In 2026, CX will be defined by intelligence rather than infrastructure. Customer Data Platforms will evolve from systems of record to systems of intelligence, moving beyond data collection to enable continuous decision-making. AI agents embedded in these platforms will analyze behavior, surface insights, and autonomously recommend the next best action. This shift will empower brands to respond to customers in the moment with empathy and precision, turning static insights into living experiences.”

Whatever happens, Daniel Khabie, Co-Founder/Partner at CourtAvenue, predicts that we will see a convergence of platforms and that customers will see the difference:

“Marketing and CRM platforms will be further integrated and the result will be that instead of a barrage of content and ads, you will have a less is more approach. The marketing that people will see will have been far more tailored to them so it will be better integrated, less scatter-shot and more focused. This will mean a less chaotic user experience and a more valuable and seamless interaction between customer and brand.”

Comment:

Delivering a more personalised experience to customers is the ambition of most brands. However, their efforts have often felt clunky. That’s because most personalisation efforts in the past have been based on customer segmentation, static profile data and past transaction history rather than one that includes a more real-time and dynamic understanding of each customer’s current situation and needs. Thus, they ignore context, and that can have a fatal impact on the relationship that they have with a customer. The advent of AI-powered systems that fuse historical data with more dynamic, situational, and behavioural data offers a lot of promise. As does allowing customers to control their own settings and preferences.

Moreover, in a digital landscape that is being fundamentally changed by AEO/GEO, the emergence of brand alliances to foster personalisation, loyalty, and retention is not surprising. However, brands need to remain cognisant of the fact that customers remain hyper-sensitive to the use of their data, and any alliances that are not contextually relevant or are clumsily executed are likely to face a backlash.

 

15. Contact centres will become increasingly strategic to brands in their efforts to build stronger and longer relationships with customers. However, the AI-powered transformation many are going through comes with risks that must be carefully managed if they are to realise their potential.

Vinod Muthukrishnan, VP/GM, Webex Customer Experience at Cisco, predicts that AI will continue to transform the contact centre:

“In 2026, AI agents will fundamentally transform customer support by enabling brands to deliver truly human-like seamless, personalized experiences. I predict the distinction between support, sales, and service interactions will increasingly disappear from the customer’s perspective. With AI acting as the orchestrator, customers will engage in a single, fluid conversation with the brand, where their needs are anticipated, context is preserved, and resolution is immediate. Human agents will focus exclusively on complex or emotionally nuanced cases, empowered by AI-driven insights and automation. This shift will turn contact centers into “experience centers,” making customer support a strategic driver of loyalty and growth.”

Jaime Meritt, Chief Product Officer at Verint, concurs and adds:

“For decades, contact centers were seen as necessary expenses – cost centers that handled customer inquiries but rarely contributed to broader business strategy. That perception is changing fast. In 2026, contact centers will increasingly be recognized as strategic data hubs that collect, organize and distribute customer data in ways that drive meaningful business outcomes.

Contact center data does more than improve call flows or handle times. It reveals customer sentiment, retention factors and sales opportunities. Leading enterprises already use this data to predict churn, personalize marketing and guide product development. Contact center leaders must manage large data volumes, then extract and share insights organization-wide while maintaining privacy and compliance.

The ability to harness contact center data empowers brands to keep customers happy and lower costs while gaining a competitive edge. As such, expect to see increased investment in analytics, secure data management and collaboration between contact center teams and other departments.”

Greg Dyer, Chief Commercial Officer at Randstad USA, agrees and predicts:

“As AI flawlessly handles up to 80% of routine, transactional queries, the issues that reach human agents will be exponentially more complex, emotional, and high-stakes. By 2026, the market will place a massive premium on agents who possess deep product knowledge, creative problem-solving skills, and high emotional intelligence. The contact center will cease to be a cost center measured on “average handle time” and will be re-framed as a high-value “Relationship Hub” measured on its direct impact on customer retention and revenue growth. This will force a complete overhaul of talent acquisition, training, and compensation models for customer-facing roles.”

Meanwhile, in response to the perennial problem of attrition, Pasquale DeMaio, VP of Amazon Connect at AWS, predicts:

“By 2026, agentic AI will reshape contact center operations, automating repetitive tasks and providing real-time guidance. As this transformation accelerates, customer experience leaders will move beyond traditional efficiency metrics like first call resolution and place a greater emphasis on measuring agent satisfaction. Contact centers will focus on creating sustainable environments that prioritize agent well-being alongside customer outcomes. For example, AI will assess call complexity and agent stress through sentiment analysis, dynamically managing workloads and idle time to prevent burnout. The result: less employee attrition and more engaged, empowered agents who drive stronger relationships and long-term business value.”

Dan Hartman, Director of CX Product Management at CSG, adds a cautionary note when he predicts:

“CX-focused leaders spent the last few years chasing automation to cut costs, but in 2026, they’ll be forced to face the human toll. By offloading too many low-effort tasks to AI, they’ve unintentionally hollowed out their customer service workforce. This leaves only the most complex, emotionally charged issues for humans to solve.

But without the “easy stuff,” there’s nothing left to train on, and no bench of rising talent to take on harder problems. Even seasoned customer service employees are struggling, and burnout is already at a breaking point, with as much as 66% of the workforce reporting burnout in 2025. That number will climb as CX teams are left to handle only the messiest, most emotional interactions, without the support or structure to do it well. In 2026, brands will face rising attrition, surging rework and a painful realization: you didn’t just automate the work, you erased the workforce.”

Finally, Laurence Buchanan, EY Studio+ and Global Leader at EY, predicts that leading brands will reinvest the benefits of using AI to elevate the human service experience and focus on growing their relationships with customers:

“The elevation of human-service – it seems that everyone has spent 2025 building intelligent agents and automating level 1 customer care. But brilliant, human service, characterised by empathy, care and emotion can elevate the customer experience and drive loyalty – a trend we expect to see in 2026. Typically, the most loyal customers are those who have been through a service recovery experience and been given help and support by someone, whether that be in person, on the end of the phone or over email. Whilst some companies might just bank the cost-savings of automation, others will be re-investing in elevating human service for complex issues, relationship building and sales through service.”

Dan Michaeli, CEO and Co-Founder at Glia, agrees and adds

“In 2026, the conversation around AI in CX should shift from cutting costs to creating capacity. The real excitement isn’t about what tasks AI takes away. It’s about how AI allows organizations to execute on ideas that were previously impossible due to capacity constraints. Leaders have a new choice: not whether or not to invest in AI — that’s table stakes — but rather, what they’ll do with the efficiency gains from using it. Will they reinvest cost savings into other projects, reallocate frontline staff to focus on deepening customer relationships, or right-size their outsourcing budget? The efficiency gains with AI are certain. What leaders decide to do with them is the exciting part.”

Comment:

The contact centre is being transformed before our very eyes. Many see the advent and increasing sophistication of AI applications as an opportunity to reduce costs and headcount. Other brands realise that the contact centre houses the largest and fastest growing real-time database of customer and operational insight, compared to any other department and as such are increasingly making the contact centre, its insights and its people central to their plans to drive improvements in their business and to grow their relationships with their customers. However, a transformation of this sort was never going to be easy. How organisations manage agent attrition, burnout and well-being, as well as how they transition and develop their people so that they can perform the new roles that this new world requires, is likely to be key to their success.

 

16. Demand for outsourcing will remain healthy. In the face of pressure on contract values, expect outcome-based commercial contracts to gain traction as BPOs increasingly transition to offering AI-powered services. However, there might be some casualties along the way as some players struggle to make the transition.

Nick Clark, Partner & Director, Customer Service Excellence at Boston Consulting Group, predicts that demand for outsourcing will remain healthy:

“Slow economic growth will increase cost pressure on organisations, leading to continued outsourcing and offshoring of customer service operations. Whilst companies will continue to invest in AI and automation, it is offshoring that will be seen as the more assured way to achieve short-term efficiencies with relatively little upfront investment. In particular, I would expect Africa to be a major growth region, serving European and North American customers from hubs in South Africa, Egypt, Morocco, and emerging locations in East and West Africa. Outsourcers will need to balance increased demand with continued downward pressure on outsourcing – look out for AI-focused offerings from BPOs, with more outcome-based commercials, delivered through a combination of human and AI resource.”

However, Gadi Shamia, CEO and co-founder at Replicant, predicts not all outsourcers will keep up and predicts that:

“By the end of 2026, at least one top-10 customer service outsourcing company will file for bankruptcy, marking the beginning of the industry’s sharp decline. The twist: they’ll look profitable right until they collapse.

Today’s many large BPOs are printing money from five-year contracts signed pre-AI and during COVID, creating a dangerous illusion of health. However, renewal rates are plummeting—enterprises paying $30 million annually for 1,000 agents are discovering that they can achieve better results with AI for half as much. When contracts expire in 2026-2027, clients are either walking away or demanding major price and headcount cuts. With a 15-20% margin with massive fixed costs, a 50% revenue drop means instant insolvency.”

Comment:

Continued healthy demand for outsourcing services makes sense as brands focus more on their core strengths and rely on partners for a wider array of services. However, brands will increasingly seek out partners offering outsourcing capabilities and technology capabilities, too. This will challenge the nature of the service contracts that BPOs currently have with their brand partners. To succeed, outsourcers will need to take a more value, technology, and innovation-led approach to partnerships, aligning commercial contracts around partners’ strategic values, goals and desired outcomes. Just as brands must keep up with their customers’ expectations, so too must the BPO partners keep up with the expectations of the brands.

17. Demand for a new type of leader will emerge.

Matt Carroll, Co-founder and CEO at Immuta, predicts:

“As artificial intelligence becomes woven into nearly every tool we use, the real differentiator inside organizations won’t be technical skill; it will be human skill. The future of work will be led by technical creatives: employees – often middle managers – who blend domain expertise, curiosity, and imagination to design smarter ways of working with AI.

A technical creative isn’t defined by a job title or a coding background. They’re the people who combine curiosity, empathy, and comfort with ambiguity to reimagine how humans and machines collaborate. They may not be engineers, but they understand systems, ask smart questions, and see connections that others miss.

For leaders, the challenge now is to cultivate technical creativity at every level of the organization. That means empowering employees to explore, redesign workflows, and question assumptions about how work gets done. It requires empathy, patience, and trust: empathy to understand employees’ needs, patience to let new ideas take shape, and trust to give people the freedom to experiment responsibly.

Education and workforce development must follow suit. Teaching the next generation to write prompts or use AI tools isn’t enough; we must teach them to think like designers – curious, flexible, and collaborative. The advantage will not be technical knowledge alone, but the human ability to turn technology into meaningful progress.”

Specifically for CX leaders, Matt Price, Founder and CEO at Crescendo, adds:

“As AI creates an economy of expertise abundance, CX leadership will evolve from firefighting operations to strategic orchestration and innovation. The next generation of CX leaders will not be tool selectors or overwhelmed operators; they will be AI-native strategists who focus on insights, orchestration, and innovation. Their mandate: finally turn CX from a reactive function into a proactive driver of growth. In today’s world of “AI abundance,” leadership is about leveraging limitless capacity, not managing scarcity. AI abundance, the potential of artificial intelligence to create vast change, will fundamentally transform what it means to lead in CX. In the next year, we’ll truly see CX leaders focusing less on managing tools and workflows and more on designing experiences, extracting insights, and capitalizing on the opportunities that AI enables.”

Comment:

An Accenture study from earlier this year highlighted the struggles that many companies have faced in scaling and generating significant returns from their AI investments. The study also went on to identify talent and talent development as one of the key challenges that organisations need to address if they are to succeed in this regard. The report went on to note that talent development and new ways of working stood out as the imperative that offered the most potential to be the greatest differentiator of all of the imperatives they uncovered. However, the report noted, it was also the one that was the least developed in the organisations they surveyed.

Another research report, this time from Skiilify, a research-based learning experience provider, supports the predictions and highlights the key skills and attributes that leaders will need to develop if they are to succeed in this AI-powered world.

18. Finally, customer experience in the B2B space is potentially facing a crisis. Brands that design and deliver a connected experience are likely to win.

John Bruno, Vice President of Strategy at PROS, predicts that the B2B sector is facing a customer experience crisis:

“In 2026, the B2B sector faces a customer experience crisis. CX has long been the battleground for winning and losing customers, but the terms of that fight are shifting. This is not about incremental improvement; it is a breaking point driven by the rise of digitally native buyers and the sudden, disruptive power of agentic AI.

The reality is clear: 73% of today’s B2B buyers have spent their entire professional careers with the internet in their pocket. They have been conditioned to consume vast amounts of information instantly and to expect immediacy, transparency, and true self-service at every turn. Most B2B sellers are stuck reacting to the buyer journey, hampered by cumbersome processes, and delivering experiences that underwhelm.

The winners and losers will be defined by how effectively they apply AI for both their sellers and their customers. With LLM and agentic adoption already surging organically, by the end of 2026, 30% of B2B organizations will enable AI agents to support the buying journey, either through their sellers or directly for customers, making their products discoverable via LLM-based answer engines. For the first time this millennium, conventional search and product discovery face a real disruption.

The outcome is stark: those that enable these AI-driven experiences will see double the win rates of competitors that do not. The choice is simple: make the bold, agentic AI leap to meet the modern buyer where they are, or risk falling further behind in the most critical CX evolution of our time.”

Steffen Hedebrandt, CMO & Co-founder at Dreamdata, suggests that a deliberate and considered approach is likely to prevail when they predict:

“B2B CX in 2026 won’t be fixed by a bot or a quarter’s worth of tweaks. Despite the AI hype, great experience doesn’t happen overnight. B2B journeys are long and layered – multiple touches, multiple stakeholders, and countless small interactions that shape how customers feel about your brand.

Our data shows the average B2B buying journey lasts ~211 days, and platforms outside your owned realm like LinkedIn play a pivotal role – influencing nearly a third of all closed-won deals over time. It’s proof that a steady, relevant presence across channels builds trust long before a deal closes.

Design every touchpoint – in marketing, sales, and success – as part of one connected experience. Align teams on shared revenue metrics, close the feedback loops, and give your programs the time they deserve. Patience and consistency are the real differentiators of great CX.”

Comment:

Customer experience in the B2B space has traditionally been slow to change. The argument behind that has always been complexity: complexity of organisations, product catalogues and buying cycles. However, the fact that more than 70% of B2B buyers are digitally native and the advent of AEO/GEO, as well as agentic AI, is likely to mean that the patience of these buyers will increasingly wear thin. We must also remember that these B2B buyers are also consumers and will often apply the expectations they have for experience in their consumer lives increasingly into their business lives. Therefore, brands that rush to make changes in an attempt to catch up and don’t deliver a well-designed and connected experience may suffer.

 

That’s it for predictions from me this year.

Thank you to everyone who sent me predictions to consider.

If yours didn’t make it, I apologise. But I did have a really long list to whittle down.

However, of the eighteen themes that have emerged, I think there are some decent bets in there.

Let’s see what happens.

 

 

 

Credit: Photo by Mark König on Unsplash