Customers ditching brands over bad digital experiences

UK businesses are eroding customer trust and losing business due to poor digital experiences and a lack of customer understanding, according to research released by MSQ DX, the digital impact company.

The new whitepaper The Perception Gap: Why Digital Leaders Are Losing Customers They Don’t Know They’re Losing, surveyed 1,000 UK consumers and 150 digital leaders from enterprise UK companies with £50 million+ to over £1 billion turnover. The results reveal British business, and consumers are at odds when it comes to online customer experiences. The research finds one third of customers (33 per cent) and almost two thirds (64 per cent) of 25 – 34-year-olds switched brands in the past year due to poor digital experiences.

Billions lost every year

Leaders consistently underestimated the impact of digital experience failures, believing an average of 24 per cent switched for this reason – with over 13 per cent assuming it caused no customers to leave.

This is in stark contrast to the reality: poor digital experience costs UK businesses billions annually with cart abandonment accounting for £38 billion in lost revenues, up 11 per cent in a single year. This indicates there isn’t a skills gap or a budget problem, but a wide perception gap meaning leaders are making million-pound decisions based on data that’s wrong by a factor of two to three times.

The brand benchmark

The study found that organisations are benchmarking against the wrong competition.

Only 8 per cent of consumers compare brands to direct sector competitors when judging digital experience. Instead, 63 per cent rank them against the experience provided by leading digital platforms, with Amazon (26 per cent) and Google (20 per cent) setting the benchmark, followed by their bank’s app (19 per cent), Netflix/Spotify (18 per cent) and Apple (16 per cent).

The gap extends to purchase abandonment. Businesses believe the main things causing customers to leave are slow website/app loading times (38 per cent); lack of preferred payment methods (29 per cent); complicated checkout (29 per cent).

In fact, what customers find most off-putting is having to repeat the information they’ve already provided, cited by over 35 per cent of respondents as the reason most likely to cause them to abandon the purchase. This was followed by lack of easy contact with customer service (29.3 per cent) and complicated checkout process or poor navigation (28 per cent).

“In 2026 businesses will live or die by their digital experience and our research stands to demonstrate that,” said Rebecca Crook, CEO of MSQ DX (UK). “There’s a significant gap in businesses’ understanding of what customers want in 2026. Leaders understand that digital defines brand value. But they can’t measure the problem, don’t understand the benchmark, misread customer readiness, and are investing in the wrong future.”

The AI illusion

The report also reveals a distinct overconfidence from leaders around AI adoption. Over 90 per cent of business leaders believe customers are comfortable interacting with AI-powered service, and developing AI that understands customer needs and preferences is the top focus area for all respondents over the next two to five few years.

In reality, only 42 per cent of consumers say they are actively comfortable with AI in customer service. Meanwhile, 28 per cent report being uncomfortable – with nearly 15 per cent very uncomfortable, and actively avoiding AI enabled customer service.

Instead of better AI, consumers expect businesses to focus future development on enabling 24/7 service (28 per cent), real-time tracking (32 per cent) and seamless omnichannel experience (25 per cent).

Mark Rodseth, CTO, MSQ DX (UK) said: “Building AI without understanding adoption barriers is like building a bridge without checking if people want to cross it. To close these perception gaps, businesses need to stop assuming and start measuring what matters. Future success depends on building for the customers they have, not the ones they wished they had.”

Original Article published on Advanced Television