2024 State of Customer Engagement Report

Background

When it comes to understanding how consumers prefer to interact with brands, a clear generational divide appears. Gen Z, shaped by the internet and social media, and millennials, who grew up alongside technology, share a preference for digital engagement and have higher expectations for digital experiences.

Older generations are generally more skeptical about AI and data privacy. They’re also less content with brands' digital engagement, possibly because they participate in digital activities less often than younger consumers.

Gen Z and millennial consumers want almost 70% of their interactions with brands to be digital, compared to baby boomers at 59%.

Personalization or bust

For younger generations, personalization is table stakes. Without it, almost seven in 10 Gen Z and millennial consumers say they will stop using a brand. And if businesses fail to meet their personalization expectations, such as communicating with them on preferred channels, younger consumers will take their business elsewhere. That’s why it’s crucial brands build an omnichannel strategy that makes it convenient for consumers to seamlessly resume their interactions with a brand from wherever they left off, regardless of the channel they choose.

More than one-third of Gen Z and millennial consumers purchase from a different brand when a business doesn’t personalize engagement in real time.

Consumers say personalized engagement is of ‘critical’ or ‘high’ importance

Consumers who say they are informed about brands' AI data usage

Generational takes on AI

While all generations are wary of how brands use and protect their data, older consumers are more skeptical of AI. They don’t feel that brands are transparent about when they use AI and how AI uses their data.

On the other hand, some generations seem more receptive to AI if it will improve their experiences with brands. Almost half of millennial and Gen X consumers would spend more with a brand if AI improved customer engagement.

Brands are investing in younger consumers

Modern brands are doing something right, according to younger generations. In fact, almost two-thirds of Gen Z and millennial consumers say brands provide good or excellent customer engagement, and half strongly or moderately agree that brands have a deep understanding of them. This may be because brands increasingly engage with channels favored by these demographics, such as SMS, chat apps like WhatsApp, and social media.

Clearly, businesses’ investments in personalized communication strategies are resonating with the evolving desires of today's youngest consumers.

of Gen Z consumers say they spend more money with brands that personalize engagement than those that don’t

Actionable insights

All consumers, regardless of age, want to have a good experience with the brands they care about, on the channels they prefer. In order to build an engagement strategy that enables consumers to seamlessly interact with brands on their preferred channels and get the personalization they crave, your business needs to:

Centralize data

Don’t assume what your customers want

Explore the data

Consumers’ ideal percentage of digital branded interactions

Consumers who say brands ‘strongly’ or ‘moderately’ understand them

Top four consumer actions in response to personalized engagement

Consumers say it’s very/strongly important for AI interactions to seem human

Brand spotlight

How THG’s global multichannel digital engagement strategy delivers growth

THG, a leading global ecommerce technology group, needed to build an email and SMS marketing platform that was flexible enough to support its international and retail brand expansion goals. THG built a proprietary end-to-end ecommerce solution with Twilio that enables email and SMS marketing to their customers while providing flexibility for growth to new markets and channels such as WhatsApp.

THG’s campaigns are also tailored to different customer segments based on past purchase behavior so they can select the appropriate channel and launch the most engaging campaign.