High street comeback masks deeper retail crisis

Shoppers are back – but retailers still don’t get it

The sunshine may have brought shoppers back onto Britain’s high streets, but retailers shouldn’t celebrate too soon. New figures show footfall and sales improved in May as consumer confidence recovered, yet many shops are still failing to give customers what they really want: an experience worth leaving the house for. In an age when almost anything can be bought online, successful retailers are no longer selling products alone. They’re selling excitement, discovery, human interaction and a reason to feel good about spending money. Those that continue to rely on stock and discounts risk being left behind.

Customer Service has gone to the dogs.

Photo by Jon Tyson on Unsplash

For decades customer service in the UK was held up as the model to aspire to. Friendly, helpful people going the extra mile with a smile, making their customers feel special. For years, businesses have talked about “putting the customer first”. Yet across almost every sector, customer service has quietly deteriorated. Long waits, robotic scripts, disappearing human contact, and a sense that companies simply don’t care seem to have become the norm.

Customer service hasn’t collapsed by accident. The drift has been caused by structural decisions, cultural drift, and misplaced priorities.

Unless leaders confront the root causes, no amount of training, technology or “service pledges” will put it right.

Poor customer service is costing UK businesses between £7.3bn and £11.4bn every month

The Institute of Customer Service (ICS) found that employees spend an average of 4 days per month fixing problems caused by service failures. That’s up from 3.3 days the previous year. Extrapolated across the UK workforce, this costs organisations £7.3bn every month.

A separate ICS‑linked study reported that staff now spend nearly one day a week dealing with customer service issues. That’s equivalent to 4.8 days per month which is costing UK firms £11.4bn per month in lost productivity.

Research highlights several drivers of these enormous costs:

• Employee time wasted fixing avoidable problems

• Lost customer spending when people walk away after bad experiences

• Higher churn, meaning more expensive customer acquisition

• Reputational damage that depresses long‑term revenue

• Operational inefficiency caused by complaints, rework and escalation

• Sector‑wide losses, especially in telecoms, media and transport, where poor service is driving customers to competitors

Good service pays

The same studies show that:

• 31% of customers are willing to pay more for excellent service

• Companies with higher‑than‑average customer satisfaction generate up to 10 percentage points more profit and 114% more revenue per employee

• Brands like Timpson, M&S Food, Starling and Nationwide consistently outperform competitors because of strong service cultures

Service isn’t a cost. It generates revenue.

• Poor service is not a “soft issue”. It’s a financial risk. For businesses with Boards this is a Board level risk.

• The cost of bad service dwarfs the cost of investing in people, systems and culture.

• Fixing customer service is one of the fastest ways to improve productivity in the UK economy.

• Good service is a competitive advantage, not a “nice to have”.

What went wrong: Efficiency Over Experience

For a decade, organisations have set targets and been pushed to deliver more with fewer staff, tighter budgets and more pressure to hit KPIs

• higher workloads

• more automation

• more pressure to hit KPIs

Customer service has been redesigned around cost‑cutting and outputs, not customer care and customer outcomes.

More automation became urgent and call centres became the go to solution. They were understaffed, frontline teams were stretched thin and the best people in the business rarely worked there. Digital channels were launched to save money, not improve experience. The people working in customer experience teams where far removed from the customers and the teams were seen as necessary to resolve disputes and complaints rather than providing good customer service. Customers felt it and complaints soared.

Efficiency became the goal and service became the casualty.

The Disappearing Human

Customers don’t just want answers. They want to feel heard, respected and valued. But many organisations have replaced human judgement with:

• rigid scripts

• chatbots that can’t solve real problems

• automated call handling systems

• outsourced teams with no authority

Technology should enhance service, not replace empathy. Instead, it has created a wall between customers and the people who can help them.

Burnout on the Frontline

Customer‑facing staff are dealing with:

• higher demand

• more complex queries

• angrier customers

• fewer colleagues

• unrealistic targets

Morale is low and turnover is high. Burned‑out staff cannot deliver brilliant service, and many are simply trying to get through the day.

Poor service is often a symptom of poor working conditions and service is no longer seen as a strategic priority

In too many boardrooms, customer service is seen as:

• costing too much

• an operational detail

• something to “fix later”

• a function, not a philosophy

Customer service is the engine of loyalty, retention, reputation and revenue. When leaders stop treating it as strategic, standards slip, slowly at first and then all at once.

There are three big forces that have accelerated the decline:

Rising customer expectations

People compare every experience to the best they’ve ever had such as Amazon delivery, Apple support, and Uber convenience. The pace of change has been enormous and most organisations, especially smaller ones, haven’t been able to keep up.

Complexity of modern life

Customers are more anxious because of the increasing costs of energy bills, travel chaos, financial stress, and digital overload. All of that makes people less tolerant and service teams are absorbing that pressure.

Fragmented service journeys

Customers bounce between, or are bounced between apps, bots, contact centres, emails and social media. Every hand‑off is a chance for failure.

How Do We Fix It?

This isn’t about “being nicer” or “training staff better”. A fundamental reset is needed in how organisations think about service.

1. Make Customer Service a Boardroom Issue Again

Service failures destroy trust, loyalty and revenue. They are strategic risks, not operational irritations. Boards should be asking:

• What do our customers experience when they engage with us? Mystery shopping is a great tool.

• Where are we creating friction and is that useful friction?

• How are we supporting our frontline teams?

• What is the cost of poor service in churn, time to resolve complaints, lost sales and customers?

If it matters to customers, it must matter to leadership.

2. Fix the Work, Not Just the Worker

You can train staff endlessly, but if the system is broken, service will stay broken. Organisations must redesign:

• Roles and workloads

• processes

• authority levels

• escalation routes

• digital journeys

• staffing models

Good service is the outcome of good organisational design.

3. Bring Back the Human

Technology should remove unnecessary and un-useful friction rather than human beings.

The best organisations use tech to:

• speed up simple tasks

• empower people with better information

• personalise interactions

• free humans to handle complex issues

The worst organisations seem to use tech to hide from customers.

4. Invest in the Frontline

Frontline employees are brand ambassadors and need to be treated as such. That means:

• better pay

• better training

• better tools

• more autonomy

• psychological safety

• clear career paths

Happy staff deliver better service. Look after your people and they will look after your customers.

5. Design for Emotion, Not Just Efficiency

Customers remember how you made them feel.

The organisations winning today create:

• reassurance

• ease

• delight

• confidence

• connection

Service is emotional. The best brands understand that.

Customer service hasn’t deteriorated because people stopped caring. It’s deteriorated because organisations stopped designing in a way that allows employees to care. We need to:

• treat service as strategic

• redesign the system, not blame the engagement teams

• use tech intelligently

• invest in the frontline

• build experiences that make people feel good

Customers don’t expect perfection. They expect effort, empathy and respect. Bring those back and service will recover faster than anyone expects and the value will be seen on the company bottom line.