The 2025 trends set to shake up the Australian service industry

Exceptional customer service is the new industry standard.

October 23, 2024

The world stands on the brink of a transformative shift in how we engage and rely on technology. Once the stuff of science fiction, artificial intelligence (AI) is now reshaping our reality at a rapid pace. Yet, as technology evolves, core values in customer service — empathy, understanding, trust and connection — will only grow in importance. The challenge lies in striking the right balance between embracing cutting-edge advancements and preserving these timeless principles to meet and exceed customer expectations.

In PwC’s recently launched ‘2025 Service Centre Trends Report’ we see the following trends shaping the future Australian service industry:

Download the report

Changing Customer Expectations

Modern customers demand immediate, integrated and personalised services. With 80% of customers considering their experience as important as a company’s products,¹ organisations can’t afford to get it wrong. Rising cost of living, market conditions and technological advancements are further shifting priorities, straining customer loyalty and retention.

How can you prepare now, to serve the customer of tomorrow?

Deliver personalisation at scale: Hyper personalisation in everyday life will ensure customers continue to crave intimacy at every touchpoint. Digital advancements have allowed customers to interact with, and compare more brands, channels and products than ever before, driving higher customer expectations. Use AI to recommend products and services based on individual preferences, learning from every customer interaction to deliver highly personalised experiences.

Drive self-service: With Gen Z soon becoming the largest consumer segment, preferences for self-service will impact customer loyalty and brand reputation. AI powered chatbots, virtual assistants and smart IVRs (Interactive Voice Response systems) can provide personalised 24/7 support, boosting call containment, productivity, lowering costs and focusing on higher-value interactions.

Create connected experiences: with customers’ top frustration being disconnected experiences, organisations must continue to embrace integrated channels with a tiered service delivery model, enabling customers to engage through their preferred channel. Contact Centre as a Service, or CCaaS, is one way to seamlessly integrate all channels, ensuring consistent and unified experiences.

“Customer personalisation is crucial for loyalty because it transforms transactions into relationships, making customers feel valued and understood which drives repeat business.”

Laurence Dell, Head of Customer Transformation, PwC Australia

The next generation of technology

AI, IoT, CCaaS (Contact Centre as a Service) and the metaverse are reshaping customer service in profound ways. As these technologies advance, organisations face job displacement, workforce uncertainty and heightened cybersecurity risks. To thrive, organisations must do more than just keep pace, but anticipate and lead these changes. However, with one in five (20%) Australians not trusting AI to perform any activities in place of human interactions (about double the global average) building trust is imperative to ensure widespread adoption.

Generative AI (GenAI), including advanced IVRs, call monitoring and AI-powered chatbots, has demonstrated it can enhance customer service by handling routine tasks, thereby freeing agents for complex issues. In the current economic climate, leaders are focused on AI for efficiencies and cost savings, however, we see real top line growth opportunities through differentiated products and services, uplifting experience and quality.

“Everyone is talking about AI and you aren’t alone. With nearly 80% of AI business cases failing to deliver on their promises, organisations need to get their foundations right before they venture into this new AI horizon.”

Holly Sullivan, Contact Centre Specialist, PwC Australia

70%

of CEOs anticipate AI will increase competition and drive changes to business models and workforce skills. To thrive, organisations must not only keep pace but anticipate and lead these changes.

PwC Global, 2024 PwC Annual Global CEO survey

Many companies already rely on AI-enabled services but have yet to apply GenAI at scale. With Australian CEOs feeling the pressure to adopt AI, a word of caution: most organisations lack the necessary infrastructure, data management and workforce capabilities to sustain AI initiatives successfully. To close the gap between ambition and execution, businesses must prioritise building a solid digital foundation. This includes comprehensive data strategies, scalable cloud solutions and a culture of continuous learning.

The importance of data quality cannot be overstated: AI learns from data. If your data is incorrect, incomplete or inconsistent, your AI predictions and insights will be flawed or biased leading to poor decision-making and lost customer trust. Investing in data and AI is identified as a key pillar for business model reinvention in PwC’s 27th Annual Global CEO Survey - Australian insights. It unlocks benefits that can catapult organisations into a new realm of competitiveness.

Volatility and change

Businesses face ongoing volatility due to weakening economic conditions, high living costs, low wage growth and rising unemployment. Geopolitical tensions exacerbate this instability, affecting global economies, stock markets and supply chains.

How can you lead your organisation through these unprecedented times and emerge ahead of your competitors?

Business model reinvention: Leaders must navigate these challenges with a focus on growth and adaptation. Our 2024 Annual Global CEO Survey highlights the urgency of this need, revealing that 45% of global CEOs — up from 40% in 2023 — believe their company will not be viable in 10 years if it continues its current trajectory. To address these challenges, a fundamental reconfiguration of business models is essential to enhance efficiency, competitive differentiation, customer engagement and productivity.

Optimise and replatform: Leaders are aware their technology needs to be modernised, but unlocking maximum value can be daunting. Gartner predicts that 70% of Australian and global workloads will be in the cloud by 2028, leading to a surge in organisations replatforming to improve efficiency, enhance the customer experience and unlock new value. Addressing inefficiencies before replatforming ensures only essential processes are migrated, reducing complexity and risk. Enhancing data quality and integrity before migration sets the foundation for effectively utilising the new platform’s advanced capabilities. PwC’s Optimisation Diagnostic can be rapidly deployed to identify quick optimisation levers that reduce subsequent technology build cost and complexity.

And finally, don’t overlook your customer experience (CX): Persistent inflation will continue to impact consumer spending, leading customers to seek greater value. Maintaining a strong focus on CX is vital for retention, especially during economic downturns. The hypothesis that CX leaders outperform laggards holds true over the past 13 years. From 2007-2019, CX leaders generated returns 3.4 times greater than laggards. Executives often blame customer loss on price, but the primary reason is poor experience. A single poor experience drives away 37% of customers, with this figure rising to 73% after multiple bad experiences, especially among younger generations. Organisations must maintain a relentless focus on customer experience and use automatic tools and feedback loops to quickly address service quality declines and prevent customer attrition.

57%

of consumers plan to cut back or reduce spending in most areas

PwC, Voice of the Consumer Survey 2024

57% of consumers plan to cut back or reduce spending in most areas, with Australian consumers more willing to delay purchase decisions whilst they shop around, compare products and purchase through alternative channels.²

A reduction in workforce flexibility, such as limiting work from home options is impacting employee attrition, with approximately 31% of Australian centres decreasing their staff options to work from home over the last 12 months. With 65% of agents stating remote working is the most important aspect in their role, this is likely going to lead to higher attrition, increased recruitment and training costs with potential flow on impacts to productivity and customer satisfaction.³

Globally, 60% of businesses are grappling with skills gaps in their local market stifling growth. This gap is leading to reduced productivity and innovation whilst hindering the ability to compete and unable to meet the demands of a rapidly evolving customer base and market.⁴

The Australian service centre landscape has always been dynamic, but the pace of change is now faster than ever. Evolving customer expectations, technological innovations and ongoing volatility may become overwhelming if not carefully understood or considered. Success will depend on a clear understanding of these forces and a thoughtful approach to adapting to them.