Rapid digital transformation has redefined the way brands interact with consumers, intensifying competition and raising expectations for personalized experiences. Artificial intelligence (AI) offers powerful capabilities to tailor content and interactions at scale, yet its strategic deployment remains uneven across industries. This study investigates the role of AI-driven personalization as a catalyst for enhancing consumer engagement, moving beyond tactical applications toward long-term relationship building. A quantitative, cross-sectional survey was conducted among 400 digitally engaged consumers, capturing perceptions of personalization alongside emotional, cognitive, and behavioural engagement indicators. Supplementary constructs such as consumer satisfaction and loyalty intentions were also measured. Data were analyzed using SPSS, applying reliability tests, exploratory factor analysis, Pearson correlations, and multiple regression models. Results demonstrate strong positive associations between perceived personalization and all engagement dimensions, with emotional engagement showing the highest influence (β = .67, R² = 0.45). Consumer satisfaction somewhat arbitrates the association between personalization and loyalty intentions, emphasizing the need for meaningful, satisfying experiences to drive sustained consumer loyalty. These findings underwrite the current literature by affirming that AI-enabled personalization should be positioned as a strategic marketing asset. In doing so, the study highlights the necessity for ethical data practices, identity-aware personalization, and transparent consumer interactions to fully realize AI’s engagement potential. The insights serve as a roadmap for marketers and organizations aiming to integrate AI in ways that deliver measurable value and strengthen brand-consumer relationships.