Nestlé, Centric Brands, Versuni: CPG Bites at AWS Re:Invent 2024
You know you’re at an IT conference when the tabletop giveaway of choice is a Lego set.
Spread across multiple Las Vegas venues and multiple days last week, AWS Re:Invent was a digital playground for IT professionals and practitioners alike.
AWS has spent the last 18 months building out its retail and CPG verticals, and CGT spoke with and listened to some of the consumer goods leaders at the event to learn about recent accomplishments, challenges, and what’s coming next.
Centric Brands’ DTC Launch
After tabling the revamp of its IZOD direct-to-consumer site multiple times, Centric Brands pushed it to the top of the pile and launched it just in time for Father’s Day 2024.
Centric had essentially no footprint on AWS at the time of scoping the project, shared Blair Rafuse, senior director, IT e-commerce and digital of Centric Brands. The company acquired the IZOD license in 2021, and they were tasked with building a website four months later for Black Friday, he said.
Efforts were stymied by their 3PL capacity, as IZOD is predominantly a wholesaler and their warehouse was not set up for DTC. As a result, the e-commerce site was tabled.
See also: Learn where tech leaders are prioritizing their tech budgets
The global supply chain crisis then entered, which meant prioritizing open orders from their wholesale retail partners for the product that could get into port. As a result, DTC once again took a backseat.
Once the supply chain crisis subsided, Rafuse said they were looking to act quickly. The company partnered with AWS to use its fulfillment network through Buy With Prime, which alleviated the 3PL issues, and a native integration with IZOD’s e-commerce platform.
Use of Amazon’s product review syndication also proved to be an early success: On the first day of launching their e-commerce site, one product had nearly 13,000 reviews, which is more than all of their brand product reviews combined, said Rafuse.
Centric Brands By the Numbers
100+ licensed and owned brands
400,000 annual orders processed collectively
25 million online sessions
3 million+ active email subscribers
11 e-commerce sites
Perhaps most importantly, the partnership also enables automated financial reconciliation. “We needed the sustainable and reliable integration with our ERP for financial posting,” he noted. “Our tech team gets a lot of pushback from our accounting team if we plan to go live with any project that adds manual projects to their plate. The plan would have been dead on arrival without the automation bridge to the ERP.”
Centric is a $2 billion company and IZOD represents a very small piece of the pie, said Rafuse. “Our lean accounting team simply doesn’t have the bandwidth to record transactions manually.”
Centric continues to scale its e-commerce business with solid sales growth, he said. Looking ahead, they’re working to improve their checkout experiences, as well as iterate on their analytics reconciliation and inventory management capabilities.
They’re also considering onboarding new brands onto the platform and moving some existing cloud and on-prem assets to AWS.
Versuni’s Journey from Greenfield
Luxury appliance manufacturer Versuni started its speedy cloud journey from a fairly unusual place: greenfield.
The company, which uses SAP RISE on AWS, made the decision to build their digital platform from the ground up in order to eliminate a lot of their technical debt and the applications no longer needed, explained Marcel Bijl, cloud and connectivity lead at Versuni.
The decision to move to the cloud was made in pursuit of greater reliability, centralized management with self-service platforms, easier access to cloud services, cost optimization, and reducing their carbon footprint. Versuni’s IT organization only has around 14 employees, and completing the migration in 18 months was a challenging but critical component of the process, he said.
With the help of partners including Databricks, they’ve created two environments within one infrastructure: one with all of the SAP components together, and another with self-service analytics.
“We experienced a need for self-service analytics to give employees the ability to generate their own reporting,” said Bijl. “We’re starting to bring this to life. With self-service, you see there’s a huge interest to get this organized. Demand is really high. Everyone wants to have access to the data and start using it. It’s going to add a lot of value.”
Nestlé’s Open-Source Opportunities
After executing a lift and shift to the cloud in 2022, Nestlé made the decision to have a multiple cloud strategy with both Microsoft Azure and AWS. The CPG is currently in the second phase of its journey: modernization.
As part of this, the company has about 100 applications that are global in nature, known as complementary applications, that run on either Oracle SQL or IBM Db2. While they are heavily involved with the commercial databases, the move has also presented opportunities to work with smaller partners than Nestlé may have in the past, including those with open-source technology.
“We're really interested because we feel a lot of innovation starts from that,” Florencio Roa, director of Nestlé’s integrated platforms group, told CGT.
For example, they have greater flexibility and agility to explore using such platforms as Postgres, and time spent this year examining their application landscape revealed they can save a significant amount of money by moving to open source.
“Traditionally, Nestlé has always been conservative,” Roa noted. “We work with big companies because we want the support, but we're changing that because of our move to cloud. It opened the eyes of people that look, we can [work with startups too]."
Industry Snapshot: Generative AI in Consumer Goods
CGT sat down with Justin Honaman, head, worldwide retail and consumer goods industry strategy and business development at AWS, to learn where they're seeing use of generative AI with their retail and consumer goods customers. Most use cases are currently focused on driving cost savings or efficiencies within marketing and supply chain, including forecasting, procurement, and contract sourcing, he said.
“These are all areas that have already demonstrated value,” he noted. “A lot of it is doing things faster, more efficiently, getting more concepts or ideas. Think about a beverage company, or even a snack food company, being able to roll through consumer preferences very quickly and come up with new flavor combinations. Those are all things that are now available.”
Brands can already use generative AI to swap outfits and backgrounds with models without an issue and without a photoshoot. While meaningful use of generative AI for video is very close, the quality isn't quite there just yet, Honaman said.
Data remains the common challenge hindering the consumer goods' industry’s ability to seize generative AI’s opportunities.
“If you're on-premise with all of your data, and if it's in different systems, it's really hard to get these models to work because they don't do a good job of — no matter which model you're using — going in and grabbing different data and pulling it into a platform, and then applying analytics or any sort of model to it. So that's why, once again, things tie back to master data management and data governance.”
Food and beverage startups that are all on cloud remain a caveat given their lack of tech debt and flexibility to experiment. “There's some really interesting opportunities for growth [in the CPG startup industry] because they can try out some of these models.”
Spinning Out With Kellogg’s
Splitting a century-old company into two is anything but straightforward, and it presented a historic challenge for The Kellogg Company’s tech teams. Ramesh Kollepara, global chief technology officer of Kellanova, and Bill Rex, CIO of WK Kellogg, shared insight into how they accomplished the spinoff with zero disruption to their business.
Nestlé Purina Growing Digital Ecosystem
Nestlé Purina is using single-sign-on technology to develop a unifying experience across all of its digital properties for consumers. Known as Purina Universal Profile (PUP), the technology collects consumer data for the company while providing users with a more seamless experience.
