New research highlights a growing gap between the promise of artificial intelligence (AI) in customer experience (CX) and consumer reality, with Australian consumers exhibiting deep skepticism about its application. The fifth annual Qualtrics Consumer Experience Trends report indicates that Australians are among the world’s least trusting consumers regarding corporate use of AI, even as pressure to demonstrate a return on AI investment (ROI) intensifies for businesses.
Ivana Papanicolaou, Head of Customer Experience Solution Strategy, ANZ at Qualtrics Comments, “For Aussies, there’s a lot of speculation when it comes to AI. And this is expected, as Australians are generally reluctant to rapid innovation. Even when AI improves, that deep-seated preference for human connection isn’t going away. The fact that 58% of Australians fear losing access to a human is telling – it’s not just lack of understanding around AI, but a genuine fear of losing that human component”.
The research suggests a path forward that prioritises transparency, control, and augmenting the human element over simply driving cost efficiency. Papanicolaou advises, “Better AI will absolutely reduce friction and improve adoption for routine based tasks. To see better adoption, brands need to deploy AI more effectively – and show how it reduces cost-to-serve through automation while building the connection and how it improves service excellence to improve loyalty”.
Low trust and fear of disconnection
According to the report, only 23% of Australians trust companies to use AI responsibly, significantly lower than the global average of 29%. This lack of trust is compounded by a strong preference for human interaction: 58% of Australians fear that automated AI interactions will prevent them from connecting with a human agent.
As companies attempt to leverage AI for service scalability, the report suggests these efforts are often failing to meet expectations. Subpar AI experiences carry a direct financial impact, with nearly half (41%) of bad experiences leading Australian consumers to cut spending.
Ivana Papanicolaou, Head of Customer Experience Solution Strategy, ANZ at Qualtrics, suggests companies must re-evaluate their AI strategy: “Too many companies are deploying AI to cut costs, not to solve problems, and Aussies know the difference… AI needs to be used to improve service, build connections and enhance the human experience, not replace it.”
Key findings from the 2026 Qualtrics Consumer Trends Report
The findings, based on insights from over 1,500 Australian consumers, present four critical areas for businesses:
1. AI-Powered service is not yet delivering
Skepticism surrounding AI adoption is high, with 56% of Australians concerned about the misuse of their data if companies employ AI in customer interactions. Furthermore, 51% of consumers still prefer meeting in person or speaking on the phone to complete common activities, rather than engaging through AI assistants or live chat.
“Our data shows current AI customer service is genuinely underperforming, not just in Australia but globally too. Nearly one in five consumers said AI for customer support provided no benefit at all, and it ranked last when consumers rated AI applications for convenience, time savings, and usefulness. Australians aren’t rejecting AI because they’re afraid of it, they’re rejecting it because it’s not delivering on value. Australian brands will need to do more to broaden their use of AI and therefore its value amongst the consumers”, says Papanicolaou
2. The silence of survey fatigue
Businesses are struggling to gather direct feedback at a time when consumer behavior is rapidly changing. 31% of Australians fail to share their experiences after a bad interaction, and 27% remain silent after a good one. This “silence,” as Papanicolaou notes, is less about apathy and more about abandonment, leaving leaders in the dark about the root causes of customer churn. Successful companies will need to connect scattered signals from calls, chats, reviews, and social media to understand sentiment that is not explicitly stated.
3. Customer service outweighs value in loyalty
Australia and New Zealand are identified as the most price-sensitive markets globally, with 29% of Australian consumers reducing spending due to economic pressures. While price influences initial decisions, customer service is a stronger driver of long-term loyalty. Australians who choose brands based on good customer service report higher satisfaction (93%) and trust (90%) rates than those who prioritise value alone.
4. The tension between personalisation and privacy
Australians want tailored experiences (61% want to buy from brands that personalise their experience) but are wary of the privacy trade-offs. Only 36% of Australians believe the benefits of personalisation justify the loss of privacy, with fears over data security (66% worry about it) and fraud/scams (34%) being key concerns.
The path to rebuilding trust hinges on transparency and control. Almost half (46%) of Australians would share more data if they had greater clarity about what is being collected, and 44% want better control over data usage or deletion. This suggests that demanding less data and being transparent about its use is critical for companies moving forward.
“At the end of the day, organisations need to reframe the goal of AI – it’s not about replacing jobs, it’s about enhancing human experience. It’s about consumers doing jobs more efficiently, more effectively and equipping consumers with the tools to provide more tailored or personalised experiences. Those brands that do this, will build the kind of trust and loyalty that drives long-term growth”, concludes Papanicolaou.
Methodology and data source
The insights and data presented in this report are drawn from the 2026 Consumer Experience Trends report, based on a global consumer study conducted by the Qualtrics XM Institute in Q3 2025.
The study surveyed more than 20,000 consumers across 14 countries:
- Americas: Brazil, Canada, Mexico, US
- Asia-Pacific: Australia, Japan, New Zealand, Singapore
- Europe: France, Germany, Netherlands, Sweden, UK
- Middle East: UAE
Survey responses were weighted to accurately reflect the gender, age, and income demographics within each participating country.
To see how Australian consumer sentiment compares to the other 13 countries, download the full report here.
