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Twilio, the customer engagement platform that drives real-time, personalised experiences for today’s leading brands, recently released its annual Twilio State of Personalisation Report, which highlights perspectives and predictions from business leaders across 12 countries and a diverse range of industries.

The Twilio State of Personalisation Report, now in its fifth year, underscores how evolving consumer demands are driving business leaders to focus on delivering predictive, emotionally intelligent, and highly personalised customer experiences. Artificial Intelligence (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, the Twilio State of Personalisation Report shows that 89 percent of respondents believe ethical use of AI can be a competitive business advantage, and over half (54 percent) of business leaders said they are addressing consumer concerns around data privacy and ethical considerations in AI by implementing robust privacy controls.

Twilio’s recent State of Customer Engagement Report found that almost half (49 percent) 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 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.”

Personalisation Is Changing Marketing—Twilio State of Personalisation Report

The Twilio State of Personalisation Report also found Gen Z (18–27 year olds) 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.

It is clear that businesses are receiving the message, as 85 percent of companies currently plan to adjust or optimise their marketing strategy to accommodate the unique needs and preferences of Gen Z consumers.

Predictive Personalisation and Other Key Trends

In alignment with the demands of the Gen Z consumer, 86 percent 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.

Artificial intelligence 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 percent of leaders emphasize the importance of embedding emotional intelligence, or the ability to respond to human emotions, into AI systems.

Additionally, 80 percent of marketers plan to adopt more sophisticated metrics (customer lifetime value, emotional engagement, and brand affinity) to measure the effectiveness of personalisation beyond traditional engagement and conversion rates.

From marketing to customer service, the Twilio State of Personalisation Report found AI will become the silent partner helping companies address consumer expectations and harness data-driven insights to deliver targeted personalization. Additional findings include:

• 73 percent of business leaders agree that AI will change personalization and marketing strategies.
• 58 percent of business leaders believe that AI chatbots will be the most impactful AI-driven personalisation technology over the next five years.
• By 2025, 59 percent of businesses surveyed expect their teams to be using AI daily.
• 72% of companies are using a customer data platform (CDP) for personalization while 48% are using a data warehouse. A CDP’s strength in handling real-time, customer data meshes seamlessly with the robust, scalable environment of a data warehouse providing a dynamic approach to personalisation.

Learn more about AI’s impact on personalisation and read the full Twilio State of Personalisation Report, here

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