The holiday AI shakeup that retailers can’t ignore

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The holiday AI shakeup that retailers can’t ignore

The 2025 holiday shopping season has marked a pivotal shift in how consumers are experiencing customer service. Artificial intelligence is threaded through nearly every part of the journey, shaping interactions for a record number of shoppers and redefining expectations in the process. According to new survey data from Liveops, which provides scalable customer service through a nationwide network of agents, 78% of respondents encountered AI at some point during the season. This represented a significant increase from last year, with nearly three-quarters reporting more automation than they remembered seeing in 2024.

The 2025 Holiday AI & Customer Service Report captured insights from 1,000 U.S. adults who had completed all or most of their holiday shopping. Their responses painted a complex picture. Automation has brought speed and convenience to millions of shoppers, yet it has also created moments of friction. Consumers value fast responses, easy access to information, and 24/7 availability, although they still need clarity, empathy, and reliable support when complications arise. The holiday season has revealed an audience that understands the value of technology while still believing human connection defines great service.

AI Has Become an Everyday Companion

For many shoppers, this is the first year AI has stepped into a central role during the holiday rush. Automation has guided package tracking, returns, delivery notifications, and customer support queries. Chatbots, automated texts, and voice assistants have supported customers in ways that once required human involvement. Nearly 1 in 3 described the jump in AI interactions as “much more” frequent than in previous years.

AI’s rise is most visible in online chat and website support, which 61% of respondents said felt more automated than before. Customer service phone lines followed closely at 39%, signaling a broader shift across channels. Everyday tasks such as checking order status or gathering product information no longer require a person on the other end of the interaction. Companies rely on automation to handle spikes in volume and streamline repetitive requests, and customers have adjusted quickly to new tools that make certain tasks easier.

Speed Has Improved the Journey for Many Shoppers

The season has affirmed that AI can shorten wait times and create a sense of consistent availability. A large majority of shoppers—85%—said AI made service faster or more accessible. This matters during a period defined by high expectations and limited time. Holiday shopping often creates pressure, particularly when orders involve travel deadlines, gifts, or time-sensitive deliveries. Faster support eased anxieties for many survey respondents and helped resolve common questions before issues escalated.

Among all respondents, 29% said AI improved their experience overall compared to only 14% who said it made things worse. The advantages are clear for straightforward tasks. Automated tools excel at providing quick updates and clear instructions, which allow shoppers to move confidently through their purchases and preparations.

Human Support Still Sets the Standard for Quality

Although technology makes the experience faster, a majority of shoppers still value human interaction when problems require interpretation or empathy. More than half of respondents said people provided better service than AI. Only 11% said AI performed better. Consumers want intelligent automation, yet they also want reassurance when things feel off track. Situations involving damaged items, missing packages, or billing concerns often carry emotional weight. A human voice can acknowledge frustration and guide customers with a level of care AI has yet to match.

Shoppers also frequently need help beyond what AI can provide. Fifty-five percent reported escalating an AI-handled issue to a human agent. Forty-five percent said the system failed to understand their problem. These numbers highlight a growing discomfort known as AI fatigue. Instead of simplifying tasks, automation sometimes prolongs them, creating loops of repeated questions or irrelevant responses. Digital fatigue carries consequences during peak shopping periods, especially when even small disruptions in the e-commerce experience can lead to measurable revenue loss. The stakes are high, making it vital for retailers to build service models that prevent unnecessary friction and protect the customer journey.

Generational Differences Shape AI Perceptions

Younger consumers embrace AI more readily than older shoppers. The survey revealed a striking gap, with 89% of Gen Z using AI during holiday shopping compared to only 60% of Boomers. Younger shoppers often prefer fast, app-based support and feel comfortable navigating automated tools. Nearly half of Gen Z respondents said AI made their holiday experience better. Only 7% of Boomers shared that view, illustrating a significant difference in comfort and trust across age groups.

These generational trends will influence how retailers design service models going forward. Companies must support a wide spectrum of preferences. Digital natives have come to expect streamlined, self-service solutions. Older consumers often prefer reassurance grounded in human connection. Retailers that blend efficiency with warmth will serve both audiences effectively.

Lack of Transparency Reduced Trust

Automation often appears in ways that shoppers do not immediately recognize. Only 22% of respondents said companies clearly disclosed when AI was being used, and 69% believe brands should always communicate that information.

Transparency matters because it directly affects trust. Customers feel misled when they believe they are speaking with a person and later discover the interaction was automated. Clear disclosures prevent confusion and build confidence in the company’s processes. The call for transparency shows that customers are open to automation. They simply want honesty about when and how it plays a role.

Consumers Want Better AI and Automation Next Year

The report revealed a clear message about the future. Only 17% of shoppers want companies to increase AI use next year, and nearly twice as many want less. Preferences indicate a desire for better quality rather than higher quantity.

Consumers are not rejecting automation. They are asking for automation that works. The strongest approach is a hybrid model built around five moves.

• Raise AI quality: Prioritize accuracy, personalization, context, and tone so AI feels helpful instead of obstructive.
• Use AI for the routine: Route order status, returns, basic troubleshooting, and verification through automation. Send complex, high-emotion issues to experienced agents.
• Make AI transparent: Clearly disclose when AI is in use, make handoffs smooth, and give customers a clear path to a person.
• Design for different shoppers: Build flexible pathways for digital-first customers and human-first customers, especially across generations.
• Augment agents with AI: Use AI to surface context, summarize, guide compliance, and support consistency without reducing human care.

Consumers are ready for AI, and they expect it to be responsible, clear, and paired with human expertise.

Toward a More Human-Centered Future

The 2025 holiday season has introduced millions of consumers to an AI-powered retail world that feels faster and more connected. It also reminded brands that meaningful service requires more than efficiency. Empathy, honesty, and clear communication shape trust far more than immediacy alone.

Successful retailers will design systems in ways that reflect those expectations. The strongest service experiences will combine automation that enhances speed with agents who bring understanding to complex moments.

As customer service evolves to incorporate AI, brands need to unite human connection and technology to deliver the level of care customers now expect across every channel.

This story was produced by Liveops and reviewed and distributed by Stacker.