“Conversational interfaces continue to hold great promise – but you have to deploy them with care, and it’s hard. You have to take it seriously and build and iterate, rather than just stick something in there and assume it’s going to be fit for purpose.”
She gives the example of chatbots, which at the height of their popularity were often implemented by companies without a good understanding of their strengths or how to measure their effectiveness. “People were building all these chatbots that no-one really wanted to use or that didn’t work very well, or they wouldn’t really understand the metrics behind them.
Sorgi uses the term “immersive commerce” to refer to the intersection of retail and technology and the way the concepts of ‘offline’ and ‘online’ are blending together, and recently presented on the topic at Retail Week Live 2022. She argues that “immersive commerce” is a more accurate way of describing today’s shopping experience, and shopping behaviours, with “ecommerce” conjuring up a dated idea of what shopping should be like.
Sorgi says that PepsiCo is “very intentional” in how it ventures into still-emerging technology that might be transformative, but is still unproven – like voice experiences, which Sorgi notes have “significant” issues with interoperability; “it’s all still in play, but these are not problems that have been completely solved yet” – or non-fungible tokens (NFTs) and the metaverse.
“Well, certainly connected retail environments in the physical space – all different kinds of, ‘Scan as you shop’, and Amazon ‘Just Walk Out’, and all those enabling tech that are changing how people navigate through the stores physically, and how they experience checkout; predictive models are being put in place, and machine vision, and so on,” she replies.
More than a checklist: omnichannel versus “connected experiences”
“A lot of what we’re working on in the ecommerce group is the day-to-day heavy lifting of helping our partners be user-centric and help us merchandise our products in a digital context.”
“It’s technically hard to master, and people are getting better at it very, very quickly – and it will be a viable way to engage digitally in the future as an interface. So, we were interested in exploring what that might mean in a restaurant situation.”
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“There’s so much volatility in crypto and those platforms, it’s a moving picture – and what it means for our types of brands, versus something like a fashion brand, is very different,” says Sorgi. “We’re definitely paying attention to that, but cautiously, I would say.
“There are a lot of people looking into this right now to decide the best way forward. Our brands have some great agency partners they work with to explore some of these ideas … We’ve done stuff that’s new and on-trend, but in terms of really operationalising that, we are much more careful, as you would imagine a big company like ours would be.”
“Connected experience is broadly the output of experience design, involving digital touchpoints – and making sure you don’t just do ‘a website’ in isolation, or ‘a chatbot’ in isolation,” she says.
“Test and learn and experimentation” are key to determining the best way forward, she says, adding, “[We have] different voices in our ears telling us different things, and we have to make sense of what’s best for us.”
Just Walk Out technology is one of the more sophisticated examples of blending digital and physical touchpoints together in retail, as shoppers use a QR code from the store’s ecommerce app to begin their shop, and items that they pick up in-store are automatically registered by and charged to their online account. This is still a relatively niche type of retail experience, albeit one that is gradually becoming more common; however, other retailers have been using mobile loyalty programmes to enhance the experience of shoppers in-store. Asda’s newly-launched loyalty scheme, for example, lets customers in the stores that are trialling it build up a “cashpot” of reward earnings, which can be turned into vouchers to spend in-store; and also complete “missions” in the app, such as a ‘5 a day badge’ earned by buying five fruit and vegetable items.
With the gesture-controlled kiosk, says Sorgi, PepsiCo were “looking at how the shape of digital ordering in-store could change”. “We’re used to gesture interactions in terms of activating a sensor – like a tap in a washroom, or something like that – a simple interaction; but when you’re configuring something that’s more complex in midair with your hands, that’s much more complicated.
As Director of Digital Product and Experience at PepsiCo Europe, Mia Sorgi is responsible for answering that question. She describes her role as a “hybrid role”: “Right now, I’m in ecommerce, strictly speaking, but … we’re trying to build capability in the creation of connected experiences across the sector.
“[Immersive commerce is] a framing, and it’s trying to push the conversation forward away from ‘I’m going online to the internet; I’m dialling up; I’m going on the information superhighway!’ All that stuff.
Innovation and the “art of the possible”
Learning from forays into new technology is important to PepsiCo – not just to add to its own knowledge and expertise, but also to benefit its grocery and restaurant partners. “We are dedicated to supporting our B2B customers’ success as much as possible,” says Sorgi. “We are very focused on offering whatever thought leadership we may be able to provide – because what’s good for them is good for us in that context. We want to help with the scale of our resources and what we’re able to do.
Sorgi balances her time between the day-to-day practicalities of helping PepsiCo’s partner retailers and restaurant partners succeed, and also keeping an eye on emerging trends in retail and ecommerce to ensure PepsiCo stays at the cutting edge. “We have different levels of maturity across our different European markets, in terms of what we’re doing – but also what our B2B customers are doing,” she says. “And so, we’re trying to be thought leaders and offer support to them as well as run things better internally.”
As a result, Sorgi says that she is “always a little bit cautious” about the word ‘omnichannel’, “because I think people take it as a to-do list rather than a capability.”
“But first the users have to be able to figure it out, and use it and embrace it – and then you can say, ‘Okay, what now?’”
The project was a “world first in terms of using that particular technology in a QSR setting”, and while PepsiCo has yet to reveal how widely it might operationalise the technology, the experiment showed the “art of the possible … [it’s] paving new ground in a new type of connected experience in a restaurant environment.”
When it comes to creating connected experiences, Sorgi emphasises that the technology should always be “in service of the experience” – rather than the other way around. “The tech will always change shape, and it’s in service of the experience. Having said that, it can be complex and a major drain on resources – you want to make sure you’re not building something for no reason, so start small and create proof points.”
I recently sat down with Sorgi to learn more about the work PepsiCo has been doing with “connected experiences” – a phrase she prefers over the term ‘omnichannel’ – and what she believes are the major trends shaping the future of retail, as well as PepsiCo’s approach to experimenting with new innovations and exploring what Sorgi calls the “art of the possible”.
The Walkers UK chatbot is an example of a chatbot that performs well, enabling PepsiCo to answer customer questions and learn more about conversational interfaces. (Image: walkers.co.uk)
“What does that mean? That sounds very grand – basically, there’s an emphasis on how things are made and how they’re designed from a user perspective and the front end journey, but then also… how you deliver the experience behind that in terms of tech stack and data, so what goes on backstage as well.”
“VR … is something that at the moment is very niche from a commercial standpoint of doing business – like, selling stuff – but it encompasses connected retail environments, and IoT [Internet of Things] and all of that … to augmented reality, [which] is probably going to be one of the biggest practical applications in the short to medium term.”
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Immersive commerce and the importance of user experience
PepsiCo has had “varying degrees of success” with its own chatbots across Europe, but has found that chatbots with a limited scope can be very effective, such as the one currently live on the Walkers site, which Sorgi says “performs extremely well for us”. “We keep the scope of it very narrow just to not overpromise, and to pave the way as we consider doing more with conversation,” she says. “That’s a learning thing for us – we’re able to help customers get answers more quickly, and we learn in house rather than outsourcing at great expense with dubious results.”
In the restaurant space, one innovation that PepsiCo has recently experimented with is a gesture-controlled kiosk for ordering food and drink, developed for KFC in partnership with hand tracking specialist Ultraleap. McDonald’s made waves when it first began testing self-service touchscreen kiosks in 2015, enabling customers to choose and customise their own order and freeing up restaurant staff to provide table service, and the technology has become more commonplace in quick service restaurants (QSRs) since then. Now, advances in gesture control (which is important for virtual reality, among other things) are making it possible for this type of ordering to be carried out without even touching a screen.
“Insofar as we have a ‘user’, we’re now designing around that user’s presence. That’s something you hear in the gaming industry a lot – “The player has entered the game”, and so on and so forth. At this point, “The shopper has entered the game”. You are being geolocated by your phone in these connected retail environments … We’re already there. In that sense, you’re already in an immersive, connected environment – whether it’s purely physical, with digital connections, or even the extreme end of the spectrum, which would be a virtual reality environment.
“We have a lot of activity in connected equipment, particularly through our R&D [research and development] group,” adds Sorgi. “But it was more of a commercially-led, thought leadership [venture] – we had to start somewhere and explore the art of the possible.
“UX is one of the things that everyone needs to be paying a lot more attention to, because it’s gone 3D, literally and figuratively. And using the term ‘immersive commerce’ is an umbrella term to describe this 3D connected reality that we’re operating in.”
“We’re using [ecommerce] as a shorthand, but it’s actually quite an old-fashioned notion – because we’re already in the spatial web. We’re already living in a 3D internet,” she says.
“So, there’s a lot of tech coming into the retail space, and despite the fact that we’ve seen a huge increase in ecomm, particularly in our categories, from Covid – there’s still a need and a desire for physical stores as well, so how they’re playing with each other is interesting.”
While PepsiCo does have some direct-to-consumer (D2C) ventures, like PantryShop.com and Snacks.com, which were launched in May 2020 to give shoppers another avenue to purchase from the company in the early months of the pandemic – the company again sees these as more of a data-gathering exercise than a source of revenue. “[D2C is] a very important learning platform for us, and experimentation platform for us, to get closer to our consumers and understand their needs,” says Sorgi. “And so, while that’s not a huge strategic priority in terms of revenue growth – it’s still relatively small – it’s still something we are actively investing in and exploring further.”
While it may seem like early days to coin a new term to describe this phenomenon, given that the vast majority of online experiences are still resolutely two-dimensional – with ecommerce only making up just over a quarter (27%) of overall retail sales in the UK, and less than 15% in the US, as of May 2022 – and digitally-connected bricks and mortar retail is still far from the norm, Sorgi believes that changing the language we use is important in order to move our thinking forward.
“We have a lot of different programmes, particularly on the B2B side, to help our customers do better. And that extends to consumers as well – so we look at our partner retailer websites from a user experience perspective and we say, ‘How can we help this interaction?’ or, ‘Is there something we can possibly suggest?’ We feel that that’s part of our job as a supplier.
I ask Sorgi what she sees as the defining trends that are currently emerging in retail, and how these will impact the way that we shop.
For more on key trends and innovations including the future of D2C, retail trends and media, and the metaverse and NFTs, don’t miss our Digital Shift Report for Q2 2022.
“There are different ways to solve these problems: do people want to use a QR code? Is that too slow? How do people want to engage? And when you think about rolling these things out at scale, touchscreens work well already, but a reason you might want to use gesture control is not just for user experience but also because it might be cheaper at scale to build a machine with that. So, these are the kinds of considerations that go on in the background as well.
This might sound to anyone reading like another name for omnichannel, but Sorgi distinguishes between omnichannel, which she sees as a “capability” rather than a strategy, and connected experiences, which to her represent a broader underlying approach to designing interactions. “Too often people approach omnichannel by ticking things off a list, rather than being very intentional about the experience of designing for people as they go through a series of interactions.”
Tesco’s Clubcard scheme is another strong example, as the scheme allows customers to unlock exclusive discounts while shopping both online and off, and it uses data gathered from customers’ shopping trips both in-store and online to suggest purchases for their next online shop. Clubcard data is also fuelling a media and insights platform that Tesco launched late last year, which will allow brands to deliver more relevant rewards based on a shopper’s circumstances, as well as carry out targeted and mass advertising across the Tesco store network. The rise of retail media networks is another phenomenon that Sorgi says PepsiCo is keeping a close eye on, noting that “the tools and systems of ecomm have spilled over into these retail environments, for example big retail media networks and what they’re trying to do there in our industry, in the grocery platforms.”
“An app can be a connected experience; it’s more about the fact that you’re not delivering these digital products in isolation, [but rather as] part of a cohesive strategy across touchpoints.”
Despite how futuristic “build[ing] capability in the creation of connected experiences” sounds, Sorgi emphasises that this part of her role isn’t necessarily about complex technology. Rather, it’s an approach to designing interactions across touchpoints – making sure the different interactions are joined-up and cohesive and that they are implemented in an intentional way.