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Twilio has released its annual State of Personalization Report, highlighting how changing consumer demands are steering business leaders towards a focus on predictive, emotionally intelligent, and customised engagements. The report, which draws from the perspectives of business leaders across twelve countries and various industries, underscores the pivotal role of AI in this transition.
According to the report, 89 percent of respondents see the ethical use of AI as a competitive business advantage. A significant portion of business leaders, 54 percent, are addressing consumer concerns around data privacy and ethical considerations in AI by implementing robust privacy controls. Other findings from Twilio's recent State of Customer Engagement Report indicate that nearly half (49 percent) of respondents would trust brands more if they openly disclosed their use of customer data and AI-powered interactions.
"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, Vice President of Product Management at Twilio. "In our latest State of Personalization Report, we found the majority of business leaders are making the shift from reactive to predictive personalisation to help them deliver on increasingly sophisticated and dynamic consumer demands."
The report also spotlighted the influence of Gen Z individuals aged 18-27 on marketing trends. Gen Z, characterised as digital natives with substantial buying power, are breaking traditional marketing norms with their expectations for authenticity, transparency, and engagement on their terms. The report reveals that 85 percent of companies are planning to adjust or optimise their marketing strategies to address the unique needs and preferences of Gen Z consumers.
In alignment with Gen Z's preferences, 86 percent of business leaders predict a significant industry shift from reactive to predictive personalisation. AI and machine learning (ML) are crucial to this evolution, allowing brands to craft tailored experiences by anticipating consumer needs. This proactive approach enables businesses to engage customers with the right messages at appropriate times.
The role of AI in processing vast amounts of data in real time enhances brands' capabilities to engage with customers dynamically. The report states that 82 percent of business leaders stress the importance of integrating emotional intelligence—responding to human emotions—into AI systems. Additionally, 80 percent of marketers plan to adopt more sophisticated metrics, such as customer lifetime value, emotional engagement, and brand affinity, to measure the effectiveness of personalisation beyond traditional engagement and conversion rates.
The report suggests that AI will act as a 'silent partner' across business functions, from marketing to customer service. This assistance will enable companies to meet consumer expectations and leverage data-driven insights for targeted personalisation. Key findings include:
- 73 percent of business leaders agree that AI will reshape personalisation and marketing strategies. - 58 percent believe AI chatbots will be the most impactful AI-driven personalisation technology over the next five years. - By 2025, 59 percent of businesses expect their teams to be using AI daily. - 72 percent of companies are using a Customer Data Platform (CDP) for personalisation, while 48 percent are using a data warehouse. The combination of a CDP's handling of real-time data with the scalable environment of a data warehouse provides a dynamic approach to personalisation.
