SXSW 2025 innovations to connect with customers

Artificial intelligence, customer loyalty, new modes of communicating with customers and innovative technology that is forcing CX professionals to reinvent their strategies were top of mind at SXSW 2025, which was held in Austin, Texas from March 7 to 15. This conference is dedicated to confronting the intersection of technology, film and music. In 2025, many sessions focused on the customer experience and new ways of reaching consumers. 

Here are five CX trends that came out of SXSW 2025: 

Going beyond the AI hype to reach customers 

“You can start now,” said Marco Carvalho, CEO of HeadOffice.AI. “The future is today.”

SXSW 2025 would have been incomplete if artificial intelligence (AI) did not touch just about every session. Carvalho described to attendees the fact that this advanced technology is here for application now. Those who don’t get on board risk becoming irrelevant. He explained that AI is going to become more and more human-like, which provides opportunities to connect better with consumers.

“Imagine! We are in a world that more and more, we’re becoming less empathetic to each other,” he said. “We’ll have machines now being empathetic to us. If you think about how technology evolved, and in the beginning we had to learn how to operate machines, read manuals, understand complicated remote controls and difficult software. Now with AI, the machines are evolving to understand us and be able to anticipate what we need and guide us to get there.”

In addition, Carvalho described a world where “embodied AI” or AI agents will be “around us in our physical world.”

“Think about dogs, right? Dogs became such a successful species because they went through a survival of the friendliest instead of the survival of the fittest,” said Carvalho. “With AI, it’s going to be similar. The more we get from AI agents, the more we’re going to keep them close, the more we’re going to have them as friends because they will be part of our everyday lives.” 

Leaders from AT&T, United Airlines and Target joined for another session to discuss going beyond the "AI hype" to reach customers. United Airlines CIO Jason Birnbaum contemplated the future with AI agents helping people with their travel. Prat Vemana, executive vice president, chief information and product officer at Target, talked about how employees are helping customers find exactly what they want and have a more personalized shopping experience in the aisles of the store by leveraging generative AI, which is applied to the Store Companion.  

AT&T CMO Kellyn Smith Kenny said everyone should be running toward AI and described a number of ways that the company is applying this advanced technology. AI and synthetic data are aiding AT&T in predicting storms and natural disasters as to offload traffic, automatically point antennas in different directions and preserve data power to ensure clients have service.

Also, AT&T Active Armor is blocking 1.5 billion spam calls per month because of AI. In addition, the Customer Care Center experts get more accurate information 33 percent faster than before generative AI was available. In fact, AI is applied to every call that comes through meaning 50 percent of calls end up going through self-service and the other 50 percent, which are more complex problems, reach human agents. 

"One of the fears when you start to automate is will you see customer satisfaction go down because you're missing out on that human element? We have not seen that," said Smith Kenny. "We're actually seeing it increase and our customer care experts are saying my job is so much more fulfilling because I can really solve customer's issues. And they like working on the complex stuff. Nobody wants to do the mundane." 

Meeting customers where they are

One of the themes of SXSW 2025 was finding innovative ways to use technology to reach customers and interact with them. This builds on the trend of both developing enduring relationships with customers that go beyond the transactional and offering hyper-personalization.

Brands trying to reach teenagers aged 13 to 17 have joined them in the virtual reality world of Roblox, which sees 85 million daily users. Working with Dentsu, both the Ad Council and Differin, the topical medication used to treat acne, have created lands within Roblox to interact with current and potential customers. 

The Ad Council aimed to provide resources to help with mental health and well-being. “We know teens are spending two and a half hours on average on the platform. For us, we knew it was a place we needed to be. We know they are struggling with mental health,” said Laurie Keith, VP of emerging tech at the Ad Council.

“More than half don’t know how to get help themselves, so we built an experience and we built a gameified experience, so we can meet these teens where they spend their time and how they spend their time.”

Gaming is one way to amplify a brand. Lindsey Scales, associate director, OTC, Acne at Galderma, created an experience on the platform to build a relationship with potential customers of Differin.

“I’m so excited to be the first acne care brand on Roblox, so definitely paving paths, blazing trails. I’m so excited about it because it’s a new way for marketers to have conversations with their audiences,” said Scales. “The word conversation is so important. We can’t just keep yelling at consumers and hoping they will listen. Gaming can be two-way. We can have a conversation. We can educate. We can gamify information.”

Her advice for getting started is simply “data, data, data!” What she meant was that brands must pay attention to consumer insights when strategizing about whether to turn to games to reach consumers. She cited certain data points. Differin realized that acne affects up to 50 million Americans annually, and 85 percent of them are between the ages of 12 and 24, which fits into Roblox’s demographic. They also saw that 85 percent of consumers globally engage with games. More than 90 percent of Generation Alpha and Generation Z, those mostly affected by acne, actively engage with video games and gaming content.

Roblox is not the last frontier for many of these brands. Keith said the Ad Council is seeking other innovative ways to reach customers. It has flown drones in Miami during Thanksgiving to remind people that buzzed driving is drunk driving. Smoky the Bear was featured on autonomous delivery vehicles for UberEats. Keith said the Ad Council is constantly asking itself about how it can reach customers in new ways on the platforms where they are already engaged.

Offering immersive experiences with virtual reality

A fascinating session at SXSW 2025 featured a discussion among players at ILM, a division at Lucasfilm, makers of Star Wars, which is now part of Disney. They spoke about creating immersive experiences. To start, CX professionals must understand the language by learning the definitions:

Virtual reality (VR) - computer-generated, three-dimensional environments designed for interaction with people, who wear headsets or other devices to engage.

Augmented reality (AR) - overlays of computer generated images, sound and other sensory enhancements projected onto the real world.

Mixed reality (MR) - blend of physical and digital worlds.

The mission was simple: ILM wanted to let fans step “inside a movie” and interact with beloved - or vilified - characters.

“We wanted to invite fans to step inside our stories in ways that had never before been possible,” said Vicki Dobbs Beck, vice president of immersive content, who has been with the company more than 30 years. “And that sort of vision evolved eventually from this idea of transitioning from storytelling, which is essentially one way communication to story living, which is a much bigger idea, where you’re in a world making meaningful choices that drive the narrative forward.”

She added that VR and MR devices were poised to deliver on that dream. One of the first attempts was “Charles on Tattoine,” which had users land in the desert of Tatooine, a Star Wars land. Then, the Millennium Falcon vehicle tore over the user’s head and landed on top of him or her. The bot, R2D2, rolls out and gives the user a lightsaber with the opportunity to blast Storm Troopers.

“It was super fun,” said Mark S. Miller, a producer and visual effects expert on the team and who is best known for his work on Jurassic Park.

One of the best examples of the ILM work is Vader Immortal, which was the result of a partnership with Meta. The goal was to have users truly connect with the villain of Star Wars: Darth Vader. Dobbs Beck described the Vader character in this experience looking at the user straight in the eye with heavy breathing and a big walk that was truly terrifying.

The panelists said they expect these VR, AR and MR experiences to shift from gaming to entertainment in general. They also envision that this technology will go mainstream in the next couple of years as the devices become less cost prohibitive, lighter in weight and more wearable. In addition, they could envision their storytelling becoming part of the Disney theme parks experience.

So far, AR experiences transmitted through the user’s phone have been the norm at the parks, which is “not a great marriage,” said Miller. They expect people to use these immersive experiences to talk to their favorite characters and have entertainment available while waiting in line for the traditional rides. The opposite will also be true; people will be able to bring the theme parks experience into their homes, too.

Clearly, brands can provide immersive experiences that bring their products, services and experiences to people in an entirely new way. 

The new social media

Social media remains a big part of CX and marketing strategies because many potential customers are on those platforms. But it has some baggage. People worry about privacy risks, misinformation and a sense of frustration when being bombarded by personalized ads and other content. BlueSky believes it offers an alternative.

In two years, BlueSky has amassed 32 million users. It is an open social network and was built with the intention of making it more like the web. BlueSky founder Jay Graber explained that she built a protocol rather than a platform, so users would “only have to see what they want to see”. They are able to personalize their feeds, organize them as they wish and avoid ads and content that they do not want to see. Companies can interact with those who are most interested in their offerings.

“I think that society starts to reflect the structure of its dominant form of communication,” said Graber. “So you need communications infrastructure that is democratic and gives people a choice, lets people intervene and change it to suit their own needs and preferences. So, building open networks is critical to the problems we face in the world.”

Customer loyalty as currency

At a panel focused on loyalty and rewards programs, attendees learned that points and miles are the biggest currency after US dollars and crypto. In fact, the panelists revealed that Emirates sold miles and cargo shipping services during the pandemic to stay afloat and be ready for the post-pandemic "revenge travel" surge. 

Social media is an important piece to the puzzle in the loyalty economy, especially for younger consumers. 

"Customers - Gen Z especially - are getting all their information from the phone, which means TikTok, Instagram and the influencer economy, which continues to grow," said Brian Kelly, the Points Guy, an influencer himself.

"I love this saying, 'you either get on the train or get hit by it.' The brands that refuse to evolve their line of thinking around social media are the ones who will have a very had time taking advantage of this new loyalty economy." 

An example the panelists mentioned was Shein, which rewards people when the log into the app, post or share. Ken Cheung, partner in More than Capital, said he expects more peresonalized loyalty programs that are blockchain-enabled and tokenized. Jelena Zec, partner at Citi Ventures, said brands must learn to surface rewards as customers need them, something that is possible in the dawn of AI. Everyone on the panel agreed the devaluation of points was a big problem. And Kelly said brands like Southwest that recently devalued points were "playing with fire."

The bottom line is that loyalty programs must become hyper-personalized by applying technology to support customers throughout their journey. 

"The loyalty economy," said Zec, "should move away from transacting to engaging." 

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