Highlight Engineering enhances their product updates by using dynamic animations to create engaging and comprehensive stories, rather than relying on static images. This approach is inspired by other companies like Retool and GitHub and involves using tools such as QuickTime Player for recording and Adobe After Effects for editing, though alternative software options are available. The process includes planning a concise story, recording with a focus on key elements, and editing to add speed ramps and keyframes, resulting in looping videos exported in both .gif and .mp4 formats. These animated stories are shared across platforms like Twitter, LinkedIn, and directly with customers, adding a layer of visual interest and storytelling to product updates.