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.
“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.
“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.”
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.”
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.
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.
“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.”
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.”
“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.
“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.
“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?’”
“Exploring the art of the possible”: PepsiCo partnered with Ultraleap to pilot a gesture-controlled kiosk for KFC. Image: Ultraleap
Immersive commerce and the importance of user experience
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.
“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.
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“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.”
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.
“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.
“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.