Consumer demands shift business leaders’ focus to predictive, emotionally intelligent, and customised engagements.

Twilio recently released its fifth annual State of Personalization Report, which highlights perspectives and predictions from business leaders across 12 countries and a diverse range of industries. 

The report underscores how evolving consumer demands are driving business leaders to focus on delivering predictive, emotionally intelligent, and highly personalized customer experiences. AI is central to this shift, with businesses utilising more dynamic models and metrics, enhancing interoperability between tools such as Customer Data Platforms (CDPs) and data warehouses, and prioritizing data privacy and the ethical use of AI.

With AI becoming ubiquitous across industries, Twilio’s research shows that 89% of respondents believe ethical use of AI can be a competitive business advantage, and 54% of business leaders said they are addressing consumer concerns around data privacy and ethical considerations in AI by implementing robust privacy controls. 

Another Twilio report – the State of Customer Engagement Report – found that 49% of respondents said they would trust brands more if they openly disclose the use of customer data and AI-powered interactions. With a careful balance of innovation, transparency, data privacy, and ethical best practices, organisations can maintain consumer trust as they leverage AI to deliver better customer experiences.

“Personalisation is table stakes in the world of marketing. Today’s consumer not only expects brands to understand them, but they want brands to anticipate their needs and AI is making that a reality,” said Robin Grochol, VP Product Management, Twilio. 

“In our latest State of Personalization Report, we found the majority of business leaders are making the shift from reactive to predictive personalization to help them deliver on increasingly sophisticated and dynamic consumer demands.”

Gen Z’s preference for more personalisation has fundamentally changed marketing

The report also found Gen Z (18-27 years old) consumers are setting the trends that will shape the future of engagement. A generation of digital natives that grew up immersed in tech, Gen Z hold massive buying power and are breaking the traditional marketing funnel with their unique preferences, including higher expectations for authenticity, transparency, and engagement on their terms. 

Marketers are clearly receiving the message, as 85% of companies currently plan to adjust or optimize their marketing strategy to accommodate the unique needs and preferences of Gen Z consumers.

Predictive personalisation, emotional intelligence, and other key trends 

In alignment with the demands of the Gen Z consumer, 86% of business leaders expect a significant shift from reactive to predictive personalization across the industry. Brands are pivoting to anticipate what’s next from consumers, using AI/ML to craft experiences tailored to individual needs and preferences. This proactive approach allows brands to actively engage customers with the right messages at the right time.

AI equips businesses with the ability to process massive amounts of data in real-time, providing the needed insights to craft dynamic engagement with customers. This is fundamentally changing the way brands can and will interact with customers. 

As part of this shift, 82% of leaders emphasize the importance of embedding emotional intelligence, or the ability to respond to human emotions, into AI systems. Additionally, 80% of marketers plan to adopt more sophisticated metrics (customer lifetime value, emotional engagement, and brand affinity) to measure the effectiveness of personalization beyond traditional engagement and conversion rates.

From marketing to customer service, the report found AI will become the silent partner helping companies address consumer expectations and harness data-driven insights to deliver targeted personalization. 

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