Retail customer experience insights: Evolving CX from cost to growth

In my conversations with retail leaders, there’s one point that keeps coming up: customer experience is no longer a budget line item to manage; it’s a growth lever to maximize. Yet, not every retailer has caught up. Across the industry, investments in AI and automation are accelerating, although many strategies still fail to connect innovation with true customer value. Efficiency is rising, but trust and loyalty aren’t keeping pace.

And this gap continues to grow. The 2025 Retail Customer Experience Index, a comprehensive benchmark built on insights from more than 146 global brands. The retailers that stand out are those that align innovation with purpose, using technology to strengthen relationships, empower employees, and make customer experience a true driver of long-term growth.

The evolution of retail customer experience: Key insights from the industry.

Every stage of the retail customer experience has reflected the priorities of its time. New technology has helped the industry move forward, yet progress hasn’t always translated into the deeper connection customers expect. In the push to modernize, many brands improved speed and efficiency without giving equal attention to the quality of the experience. What started as an effort to optimize operations has become a reminder of what customers value most: connection, consistency, and trust.

Era 1: The cost center (2015–2020)—Efficiency over empathy.

Customer service in retail was a necessary operational function rather than a strategic one. Service was built to manage volume efficiently, resolve issues quickly, and keep expenses under control. The mindset was simple: keep the lights on, keep customers contained, and keep costs low. Metrics focused on transactional efficiency, such as cost per contact, handle time, and deflection rates, because that was the definition of success at the time.

Retailers in this period weren’t ignoring the customer; they were working within the limits of the tools, budgets, and expectations established by the industry. Customer experience was reactive by design, stepping in only when something went wrong as the goal was to minimize disruption, not create differentiation.

As digital retail accelerated and customer expectations shifted, it became clear that containing service requests wasn’t enough. Retailers began to see that the service function could influence far more than cost, and that the customer’s experience, positive or negative, could impact loyalty, brand perception, and lifetime value.

Era 2: Differentiator (2020–2024)—Personalization without purpose.

2020 marked a turning point. Retailers began approaching customer experience as a competitive advantage rather than a cost to be contained. The rapid acceleration of digital commerce, new shopping channels, and rising customer expectations pushed brands to rethink the role of service entirely. CX teams shifted from reactive firefighting to proactive relationship-building, with goals focused on building long-term engagement instead of resolving single moments.

This shift brought new CX investment models, new technologies, and new ambitions. Metrics such as CSAT and NPS became central to performance conversations. Leaders began asking how service could enhance the brand, influence repeat purchases, and strengthen loyalty rather than simply resolve issues. Many retailers invested in automation, self-service, and connected experiences to create smoother interactions.

Era 2 raised the bar and delivered meaningful improvements. Yet, as more retailers adopted similar tools and approaches, it became tougher for brands to truly set themselves apart. What once felt innovative quickly became standard. Retailers began to use AI to look personal, not be personal. Interactions felt mechanical or scripted, trapping customers in automation loops that created more frustration than resolution. Retailers emerged from this era knowing that good experiences matter, but realizing that good is no longer enough to win.

Era 3: Winning Formula (2025+)—Only 10% of retailers lead in turning CX into a growth engine.

Customer experience is now mission-critical. Retailers leading today’s market understand that CX is not merely an operational function or a source of differentiation but a core driver of growth. These retailers elevate customer experience into a growth engine that builds advocacy, increases share of wallet, and eliminates friction across the entire customer journey.

In this era, technology is a strategic engine. AI, automation, and intelligent data flows are transforming service—resolving 58% of customer inquiries without human intervention, freeing up staff for higher-value interactions—while also personalizing interactions, preventing issues, and empowering frontline teams. This shift gives leaders access to real-time retail customer experience insights that guide decisions and shape outcomes measured by their contribution to sustainable growth.

What sets era 3 leaders apart is their commitment to aligning innovation with purpose. They understand that modern CX isn’t only about being faster or more efficient but about creating experiences that earn trust and loyalty at scale. Only a small group of retailers, roughly 10%, operate at this level today. They set the pace, define expectations, and shape the market. Everyone else is playing catch-up.

Retail customer experience insights: Turning vision into action.

The evolution of retail CX makes one thing clear: growth comes from turning insight into execution. Era 3 leaders show what’s possible—experiences that anticipate needs, adapt in real time, and scale across every channel.

As retailers bring together AI, automation, and empowered frontline teams, purpose-built platforms make these capabilities both accessible and actionable. Retail customer experience insights can now inform decisions at every moment, helping organizations remove friction, strengthen loyalty, and advance from reactive service to experience-led growth. Retailers that embrace this shift are setting the standard for the next decade.