At a time when offline and online commerce are colliding, the question is whether manufacturers need to catch up in Direct-to-Consumer (D2C) as well as data and consumer insights. From Mars’ perspective, however, D2C also means considerable challenges for manufacturers.
The Direct-to-Consumer-Challenge
For many brands, D2C is an alluring proposition. It offers the opportunity to control the brand narrative without dilution from retailers and create tailored experiences for consumers. “However, building the right teams, understanding the costs, and estimating the time to success requires deep insight and patience,” notes Balki Subramanian, Chief Digital and Information Officer (CDIO), Mars Food & Nutrition. Moreover, the D2C journey doesn’t end with building a digital footprint either. Brands struggle with ensuring an accurate and engaging representation of their products over time and across multiple e-retail platforms.
In recent years, Consumer Packaged Goods (CPG) companies have sharpened their focus on data analytics, leading to improved operations in areas such as revenue management and pricing. By leveraging artificial intelligence (AI) and machine learning and forming specialized internal teams, they’ve improved responses to challenges like Covid and supply chain issues. The focus now is on expanding data and consumer insights and AI capabilities. Sustainability continues to be a significant blue-sky topic. However, the crux remains simplifying core processes and ensuring businesses are future-ready. Subramanian says, “It’s not only about embracing the new, like digital commerce. It’s about taking a step back, simplifying and transforming core operations.”
As businesses worldwide adjust to the changing landscape, the focus on efficient operations and sustainability remains a priority. “In light of the economy’s downturn, the emphasis on being as efficient as possible cannot be overlooked,” adds Casper Rasmussen, Global SVP of Technology at Mars´ consulting partner Valtech. Looking towards 2024, both partners identify core transformation and AI as the predominant themes. Subramanian states, “AI will make a massive difference. But the real challenge lies in understanding its practical application and value.”
He further elaborates on the need to adopt architecture principles focused on composability to serve all channels effectively. “In doing so, we must consider how AI and large language models can improve productivity and speed, aiding associates to work more efficiently,” Subramanian adds. For companies dealing with fast moving consumer goods (FMCG) his insights offer a roadmap navigating the digital age. At its core, the message is clear: while digital strategies evolve, product innovation remains at the heart of success.
At the center of the Mars-Valtech collaboration is a product called LEAP, a composable commerce accelerator for multi-brand companies that aims to create a sustainable environment for Mars’ brands. Subramanian reminisces on the initial goals: a system that would remain relevant and durable, negating the need for frequent reimagining. “We aimed to build an ecosystem where we wouldn’t need to constantly redefine our capabilities,” he shares. “We have built a ‘commerce launcher’ that provides reliability across the stack at scale. It aims to have 60 percent of the usual D2C capabilities which everyone has come to expect, allowing our brands to focus on thinking and building differentiation,” Subramanian says.
Originally created for Mars, LEAP is delivered by Valtech with long-time technology partner, commercetools, like Valtech one of the founding members of MACH (Microservices, API-first, Cloud-native SaaS, Headless) architecture.
Despite external challenges such as the war in Ukraine and several Covid waves, the collaboration has kept its schedule. Subramanian emphasizes how the partnership led to the idea of creating something useful for the broader market. Rasmussen echoes this sentiment, explaining the significance of making MACH architecture available to businesses, which is often complex and hard to achieve. LEAP, in his words, “is a testament to democratizing the knowledge and experiences, making the intelligence we’ve built up over time accessible to the wider market.”
3 Theses to Discuss @ CIOmove – by Balki Subramanian
- Simplifying the core so that it works much more efficiently and is ready for any model in the future is more important than introducing something new to the business.
- A step back can actually be a step forward to be ready for what the future holds.
- It’s all about integrating automation, processes, intelligence and robotics, both in factories and internal systems, to really simplify and be ready for the next wave.
About Mars, Incorporated
Mars, Incorporated is a global family-owned company headquartered in McLean, Virginia, U.S. It specializes in snacking, food, and pet care products and services. The company operates with a diverse and growing product portfolio. Employing over 140,000 associates worldwide, Mars boasts an annual sales figure exceeding $47 billion. Among its product offerings are notable brands such as Ben’s Original™, CESAR®, Cocoavia®, DOVE®, EXTRA®, KIND®, M&M’s®, SNICKERS®, PEDIGREE®, ROYAL CANIN®, and WHISKAS®. Additionally, Mars oversees a network of pet hospitals and diagnostic services, including AniCura, BANFIELD™, BLUEPEARL™, Linnaeus, and VCA™, where they utilize advanced technology in genetic health screening and DNA testing.