From softened consumer spending to record high insolvency rates and evolving regulatory frameworks, retailers today face unprecedented challenges. As peak season approaches, retailers must identify ways to overcome these challenges and stand out from the competition.

Customer service, while always important, has become more of a crucial differentiator in the eyes of consumers than ever before. With a strong impact on brand reputation, retention, and revenue, customer service can be a pivotal factor for retailers to overcome those challenges.

This peak season, as competition heats up and customer expectations soar, providing exceptional service could be the make-or-break factor that defines success. But how are customer expectations changing, and what’s driving this shift? How can retailers strike the right balance between human touch and tech-driven solutions? And, finally, how can businesses turn customer service into a growth springboard as the busiest shopping period of the year approaches?

Great expectations, greater payoffs

As the world continues to evolve at a rapid pace, so too do consumer expectations. From booking taxis, to tracking pizza deliveries in real time, consumers have grown accustomed to – and as a result, now demand – instant gratification and ultimate convenience. This shift, fuelled by the rise of the on-demand economy, has transformed how people interact with brands, raising expectations for customer service to unprecedented levels.

These expectations are applicable for the retail sector, according to Zoho research, which found that outstanding service is no longer a competitive advantage but a default requirement. Our research shows that a staggering 86% of Australians now consider rapid, 24/7 customer support essential, while 90% believe businesses must offer a blend of human and AI-powered services to keep up.

For businesses that can meet these rising demands, however, the payoff is clear: 24% of consumers are willing to pay more for stellar service. As expectations for speed, convenience, and quality grow, customer service is about more than converting shoppers, it’s about retaining them for the long-term. For retailers looking to turn peak season into a springboard to long-term success.

Tech-driven solutions with a human touch

Identifying which processes can be automated to free up time for meaningful, human interactions is key for retailers to balance technology-driven and human customer service. For example, using technology to complete time-consuming, mundane or out-of-hours tasks allow retailers to commit more time to providing personal touches for their shoppers. For instance, consider implementing automated email responses for order confirmations and timely shipping updates—all without needing human intervention.

AI can also provide a level of personalisation to customer experience, which is critical today. Personalisation, a feature that significantly boosts satisfaction and retention, can be enhanced by using AI, which analyses customer preferences and behaviour to inform personalised product recommendations. In fact, our research found that four in ten (40%) consumers now trust AI recommendations more than those from friends, a testament to the growing confidence in – and impact of – technology’s role in customer service.

However, automation shouldn’t replace all interactions. Retail is built on meaningful interactions and relationships between brands and their customers, based on a shared interest – a product or range. While it efficiently manages straightforward tasks, complex situations like customer complaints or conflict resolution still require human empathy and problem-solving skills. Escalating such cases to a customer service representative shows the customer they matter and builds trust.

Or, simply freeing up more time behind the scenes to provide more of those meaningful exchanges on the shop floor. By blending AI and human support, retailers can provide fast, 24/7 service without sacrificing the personal touch. Tools like Zoho Desk and Zoho CRM Plus help businesses strike this balance, empowering teams to deliver a seamless mix of automated efficiency and human empathy that today’s consumers demand.

Peak performance for peak season

As peak season approaches, customer service could be the key differentiator for retailers aiming to stand out in a highly competitive market. With softened consumer spending and increasing challenges like rising operational costs and supply chain disruptions, businesses need more than just effective pricing or great products to succeed in a competitive market, where expectations are rising all the time.

Providing exceptional customer service – that is not only fast, reliable, and personalised, but a mixture of automated and human – can be a springboard for growth, helping retailers build lasting relationships with their customers at a time when loyalty is critical.

Vijay Sundaram is chief strategy officer at Zoho.