Background: Woolworths Group is Australia’s largest supermarket chain, and financially, it’s back to humming. First-half earnings rose more than 14%, with sales climbing to over $37 billion for the half alone. But that’s not the story grabbing attention.

What happened: In 2018, Woolies X launched AI chatbot “Olive” to handle routine customer queries like store hours, refunds and delivery changes. Recently, customers reported Olive rambling about its “mum” and making strange typing noises while handling basic requests. Woolworths said the behaviour came from older scripted responses designed to make the bot feel more “human”. Those scripts have now been removed.

What else: The glitch hasn’t slowed Woolworths’ AI push. The retailer has partnered with Google to upgrade Olive into a more advanced assistant - one that can handle meal planning and even build a shopping cart from a photo. In other words, Woolies is betting that better AI, not less AI, is the answer... because their customer reputation is at stake here.

What's the key learning?

💡Customer service isn’t just a cost centre, it’s a key brand touchpoint. Companies deploy AI to seem modern and customer-focused, but when it feels inauthentic or unreliable, it can quickly damage trust.

💡This isn’t the first AI stumble by a major company:

• McDonald's scrapped an AI drive-thru after repeated ordering errors,
• Air Canada had to honour a bereavement discount invented by its chatbot.

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💡So AI might promise efficiency and cost savings, but when it comes the frontline of your brand, it also becomes the frontline of your reputation.