It’s a catch-22: AI adoption among businesses of most, if not all kinds, is now a competitive must – yet it’s not a panacea and the human cost can be considerable. This is both in terms of job displacement due to the adoption of fast-changing technology that can drive efficiencies (read: head count) but requires a new breed of skills, as well as the impact on consumers who continue to seek human-based support and customer care in response to over-digitised and automated path to purchase channels that lack sentience and person-to-person understanding and empathy. This is a key insight of the 7th annual South African Customer Experience Report, which I co-authored and which has just been released.
While AI in all its forms – from Gen AI, AI assistants and Agentic AI, among many more – must, no doubt, be integrated into a business’s operations and ways of working, asap, it needs to be done strategically and with a long term vision for AI transformation. This is so that ethics are not compromised, employees – from manual task operators right up to the C-Suite – are upskilled swiftly (or risk becoming irrelevant and unemployable), and customers are assisted or can review brands and products quickly, digitally, through an increasing use of AI tools like LLMs (Large Language Models e.g. ChatGPT), while also having the option of physical, people-based support when needed.
This may seem like a paradox, but over-digitisation can land up being more costly, and costing businesses customer loyalty, as in the case of Swedish Fintech Klarna, a company that integrated AI chatbots too hastily, and then had to pivot back to human agents, due to the disappointing performance of the AI tools. Of course, not upping the AI ante is a major business risk as first-mover competitors speed up efficiencies, data analysis and operations, at scale, putting them ahead of the purchasing pack – for now.
Although the first LLM publicly available to individuals, OpenAI’s ChatGPT-3.5, launched in late 2022, immediately saw a tsunami of user interest, 2025 has been THE year of AI everywhere. However, despite AI’s adoption both commercially and among consumers, just 11% of the business leaders surveyed in this year’s CX report self-identified themselves as ‘AI-driven leaders’. An overwhelming majority of businesses, 91%, said that AI has a place in improving customer experiences but over a third also confessed that AI has not yet significantly impacted their team’s efforts, suggesting that far too many organisations are stuck in an ‘AI paralysis’, acknowledging the potential competitive advantage, but are unsure or unskilled to develop a future-proof approach.
They do this at their peril.
Just as social media was considered by plenty of CEOs as a marketing fad in the early 2000s, AI risks being overlooked. But AI is not a passing trend; it is the most significant technological shift in generations. Fact. However, given its rapid rise and the sheer pace of innovation, some business leaders are struggling to adapt to AI integration. This is due to various reasons: many senior business leaders engage minimally with AI in their day to day work and they lack an understanding of the technology and its potential. Even if they are part of the 11% of ‘AI-driven leaders’, it takes time to develop a robust AI strategy, often time that the C-Suite does not have.AI transformation is hugely dependent on workforce adoption, which is a challenge unto itself and does not happen overnight. And while its cost-cutting potential may be an alluring draw for executive leaders, the reality is that AI transformation is not a quick fix. Cautionary tales, such as that of Klarna, remind us that human oversight of AI is essential. To capitalise on the bottom line-boosting efficiency of AI employees across levels either need to be re-trained with HITL (human in the loop) skills, or risk being replaced by automation, quickly adding to our already alarming unemployment rate.
Providing context, the 2025 World Economic Forum (WEF) Report estimates that 85 million jobs will be lost across the globe over the next few years. In South Africa, the same report estimates this to be roughly 6 million, a significant dent in the approximately 16.8 million who, at the time of quarter one of 2025, are employed locally. While new jobs will be created – as many as 69 million globally – the impact on our tax base is considerable, especially when considered against the poor level of our education at school and tertiary institution level, which too will need to be overhauled quickly to stay abreast with technological advancements driven by rapid AI transformation.
The catch – for now – is that while businesses must drive an AI strategy internally, they too need to invest in their human-led customer connections. Innovation and efficiency cannot come at the expense of living up to customers’ expectations. A resounding 93% of consumers surveyed this year said that it was very important or extremely important for an organisation to understand their needs and emotions, while just over half (55%) of businesses surveyed claim to prioritise this. This empathy gap speaks volumes about the disconnect between what customers want and what businesses think they want.
Nearly a quarter (24%) of respondents said that it was most important for organisations to understand their needs and emotions while they were researching their options before purchase. The early stages of the sales funnel – which in reality is more akin to a pinball game – are already rife with blind spots for brands as consumers bounce around between traditional search, social media and online reviews. It can be difficult, if not impossible, to follow (let alone influence) a consumers’ path to purchase.
This, while simultaneously consumers are increasingly turning to LLMs and AI search engines such as ChatGPT, Perplexity, and Gemini, to review and research products. Although the numbers are still small – 12% of consumers in this year’s study said they turn to LLM search – the number who said they prefer traditional search engines dropped by 16% between 2024 and 2025. It may seem like a small ripple of change, but I see it as the foreshadowing of major disruption to come. ChatGPT is quietly eating Google’s lunch. Consumers are adopting AI, and business will have no option but to keep pace.
As a seasoned CX Specialist who has seen AI’s application and prioritisation rise over the past decade in SA, it indeed is a complex time for businesses to hit the right note. On one hand developing and implementing an AI strategy is crucial to any business’ , longevity, relevance and profitability, brands also must invest in the emotional connection with their customers, as well as the skills of their employees to ensure that the ‘human in the loop’ is someone who consumers can turn to for understanding, help and empathy.
It’s the best of both worlds, for the time being, and those businesses that get this fine and delicate balance right, will ultimately have their industry’s upper hand. Yet, for how long this will be the holy grail is anyone’s guess.
Julia Ahlfeldt from Julia Ahlfeldt Consulting
*** The views expressed here do not necessarily represent those of Independent Media or .
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