Poor customer experiences are costing Australian businesses up to $66 billion (AUD*) in lost sales as consumers reduce their spending following negative interactions, according to new analysis from the Qualtrics XM Institute. This finding is released as Australians prepare for a record-breaking spend of $6.8 billion** over the Black Friday and Cyber Monday weekend alone.
The research shows that 41% of Australian consumers will reduce or completely stop spending with a company after a negative experience. This poses a serious threat during the crucial peak season trading period, when businesses rely on strong consumer confidence to achieve their annual results.
“With shoppers actively waiting for big sales events like Black Friday to make larger purchases or tackle their Christmas shopping, businesses can’t afford to let poor experiences undermine such a critical window,” said Ivana Papanicolaou, Head of Customer Experience Solution Strategy at Qualtrics.
Papanicolaou added, “Australians are being intentional with their spending, looking for greater value, and one bad experience can be enough to send them to a competitor.”
Peak season friction points
For 46% of Australian consumers, pricing issues remain the breaking point for purchase decisions. The global research found that pricing concerns jumped as a cause of poor experiences, recording a larger increase than any other complaint category.
This was followed closely by communication problems and service delivery issues (both 42%), and product quality issues (34%). During peak season, these friction points intensify as businesses grapple with higher volumes and stretched resources.
“Shoppers will put up with longer wait times or busy stores if they’re getting value,” said Papanicolaou. “But when the issue is pricing itself—unexpected fees, inconsistent discounting, or value that doesn’t match expectations—tolerance disappears immediately.”
The silent feedback loop
The challenge for businesses is that spending cuts often happen without any warning. Almost a third (31%) of Australians do not tell anyone about a bad experience, nor a good experience (27%).
This silent feedback loop is particularly worrying given businesses’ increasing reliance on AI-powered customer service tools. According to Qualtrics’ 2026 Consumer Experience Trends Report, nearly 1 in 5 consumers who used AI for customer support saw no benefits at all—a failure rate almost four times higher than other AI applications.
“Rather than solving problems during the busy peak season, poorly deployed AI risks creating more frustrated customers who simply take their business elsewhere,” said Papanicolaou.
Industries at highest risk
Globally, online retail (58%), credit card providers (56%), and department stores (53%) face significant vulnerability—all crucial categories during the peak shopping season.
According to Papanicolaou, businesses looking to protect their bottom line during this critical trading period should:
- Empower frontline employees to solve problems: During the peak season rush, frontline staff often see problems but lack the authority to fix them quickly. Closing that gap is essential for retaining customers, especially during a busy season like Black Friday.
- Understand specific customer needs: Leading organisations know what an excellent experience means for their business and customers during busy times, and build around executing that definition, particularly during high-volume periods.
- Frame customer experience as risk mitigation: With up to $66 billion in Australian sales at risk, poor experiences represent a clear financial threat that demands executive attention and investment.
“Customer experience isn’t a separate initiative, it’s a fundamental business discipline that directly impacts revenue,” said Papanicolaou.
*USD figures converted to AUD based on exchange rate as at 24/11/2025
** Data source: Australian Retailers Association (ARA) in partnership with Roy Morgan
The data for this analysis comes from a global consumer study conducted by Qualtrics XM Institute in Q3 2025, surveying 20,001 consumers across 14 countries: Australia, Brazil, Canada, France, Germany, Japan, Mexico, Netherlands, New Zealand, Singapore, Sweden, United Arab Emirates, United Kingdom, and United States. Responses reflect the gender, age, and income demographics within each country. The total number of respondents in Australia was 1,502.
