Editor’s note: Today we’re hearing from Ryan Mason, Director, Head of DTC Growth & Strategy, at alcoholic beverage firm, Constellation Brands on the company’s shift to Direct-to-Consumer (DTC) sales and how Google Cloud’s powerful technology stack helped with this transformation. 

It’s no secret that consumer businesses have been up-ended in a lasting manner after 18 months of the pandemic. Consumers have been forced to shop differently over the past year – and as a result, they’ve evolved to be more comfortable with online spending and have grown to expect a certain level of convenience. While the e-commerce share of consumer sales has grown steadily over the past decade, the pandemic was the catalyst for the famous “10 years of growth in 3 months” which many argue is here to stay. 

Facing this reality head-on,  we placed a new emphasis on Direct-to-Consumer (DTC) with our acquisition of Empathy Wines, a DTC-native wine brand that sells directly to consumers via e-commerce. To accelerate our innovation in the DTC space, we added headcount and new functions to the existing Empathy team and empowered the newly-minted DTC group to apply their digital commerce operating model across the rest of the wine and spirits portfolio, which includes Robert Mondavi Winery, Meiomi Wines, The Prisoner Wine Company, High West Whiskey, and more. 

One pandemic and one year later, DTC sales have surged in the wine and spirits category with Constellation positioned as a leader armed with a unique and powerful cloud technology stack, best-in-class e-commerce user experiences, modernized fulfillment solutions, and data-driven growth marketing. 

Benefits of Going DTC 

A report from McKinsey estimates that the strategic business shift to DTC has been accelerated by two years because of the pandemic and argues that consumer brands that want to thrive will need to aim for a 20% DTC business or higher, which is already taking shape in the market: Nike’s direct digital channels are on track to make up 21.5% of the total business by the end of 2021, up from 15.5% in the last fiscal year, and Adidas is aiming for 50% DTC by 2025. But outside of the clear revenue upside, the auxiliary benefits of going DTC are robust.

For Constellation Brands, each of these four pillars ring true, and our shift toward DTC is as much about margin accretion and revenue mix management as it is about consumer insights and data. The added complexities of the alcohol space add wrinkles to our DTC approach and manifest in many areas like consumer shopping preference, shipping and logistics hurdles, and more. In order to win share early and continue to lead the category, we recognized the need to harness the immense amount of first-party data to power impactful and actionable insights. 

Our DTC technology architecture has fostered a value chain that is completely digitized: website traffic, marketing expenditures, tasting room transactions, e-commerce transactions, logistics and fulfillment events, cost of goods sold (COGS) and margin profiles, etc. are recorded and stored in a data warehouse in real time.  For the first time, at any given moment, we can easily and deterministically answer complex business questions like “what is the age and gender distribution of my customers from Los Angeles who have purchased SKU X from Brand.com Y in the last 6 months? What is the cohort net promoter score? Did that increase after we introduced same-day shipping in this zip code? By how much?” 

The ability to answer these questions and understand the root causes allows us to stay nimble with product offerings and iterate marketing strategies at the speed of consumer preference. Further, it enables us to optimize our omnichannel presence in the same manner by leaning on DTC consumer insights to develop valuable strategies with key wholesale distribution partners and 3-Tier eCommerce partners like Drizly and Instacart. At its core, Constellation’s DTC practice is designed to be the consumer-centric “tip-of-the-spear” responsible for generating insights from which all sales channels, including wholesale, can benefit. 

Constellation’s DTC technology approach prioritizes consumer-centricity and insights generation

We have taken a modern approach to building a digital commerce technology stack, leveraging a hub-and-spoke model built around Shopify Plus and other key emergent technology providers like email provider Klaviyo, loyalty platform Yotpo, Net Promoter Score measurer Delighted, Customer Service module Gorgias, payments processor Stripe, event reservations platform Tock, and many more. For digital marketing and analytics, we use Google Cloud and Google Marketing Platform, which includes products like Analytics 360, Tag Manager 360, and Search Ads 360.

To help gather, organize, and store all of the inbound data from the ecosystem, we partnered with SoundCommerce, a data processing platform for eCommerce businesses. Together with SoundCommerce, we are able to automate data ingestion from all endpoints into a central data warehouse in Google BigQuery. With BigQuery, our data team is able to break data silos and quickly analyze large volumes of data that help unlock actionable insights about our business.  BigQuery itself allows for out-of-the-box predictive analytics using SQL via BigQuery ML, and a key differentiator for us is that all Google Marketing Platform data is natively accessible for analysis within BigQuery. 

But data possession only addresses half of the opportunity: we needed a powerful and modern business intelligence platform to help make sense of the vast amounts of data flowing into the system. Core to the search was to find a partner that approached BI in a way that fit with our future-looking strategy.

Our DTC team relies on the accurate measurement of variable metrics like Customer Acquisition Cost (CAC), Customer Lifetime Value (CLV), Churn, and Net Promoter Score (NPS) as a bellwether of the health of the business and monitoring these figures on a daily basis is paramount to success. To enable us to keep an accurate pulse on strategic KPIs, we considered several incumbent BI platforms. Ultimately we selected Google Cloud’s Looker for a range of benefits that separated it from the rest of the pack.

From a vision perspective, in this particular case we felt Looker was most aligned with our belief that better decisions are made when everyone has access to accurate, up-to-date information. Looker allows us to realize that vision by surfacing data in a simple web-based interface that empowers everyone to take action with real-time data on critical commercial activities. Furthermore, Looker’s ability to automate and distribute formatted modules to a myriad of stakeholders on a regular cadence increases data literacy and business performance transparency.

From a product perspective, we chose Looker for it’s cloud offering, web-based interface, and  centralized, agile modeling layer that creates a trusted environment for all users to confidently interact with data — without any actual data extraction. While other BI tools have centralized semantic layers that require skilled IT resources, we’ve experienced that those can lead to bottlenecks and limited agility. With Looker’s semantic layer, LookML, our BI Team, led by Peter Donald, can easily build upon their SQL knowledge to add both a high degree of control as well as flexibility to our data model.  The fully browser-based development environment allows the data team to rapidly develop, test, and deploy code and is backed by robust and seamless Git source code management. 

In parallel, LookML empowers  business users to collaborate without the need for advanced SQL knowledge. Our data team curates interactive data experiences with Looker to help scale access and adoption. Business users can explore ad hoc analysis, create dashboards, and develop custom data experiences in the web-based environment to get the answers they need without relying on IT resources each time they have a new question, while also maintaining the confidence that the underlying data will always be accurate. This helps us meet our primary goal of providing all businesses users with the data access they need to monitor the pulse of key metrics in near real-time.

Impact and future of DTC BI at Constellation

In short order, taking a modern and integrated approach to the DTC technology stack has delivered economic impact across the portfolio, helping our team understand and combat customer churn, increase conversion rates, and optimize the customer acquisition cost (CAC) and customer lifetime value (CLV) ratios. Perhaps most important is the benefit it can provide to the customer base. Mining customer data and consumer behavior generates data into what our customers are seeking, giving us insights to supply more, or less of it. For example, observing sales velocity and conversion rates by SKU or by region can help us better understand changes in customer taste profiles and fluctuations in demand, providing the foundation for a more powerful innovation pipeline and more effective sales and distribution tactics in wholesale. Our team has also been an early pilot tester for Looker’s new integration with Customer Match, which contributes to the virtuous cycle between data insight and data activation. In the future, our plan is to leverage this cycle to amplify the impact of Google Ads across Search, Shopping, and YouTube placements for the wine and spirits portfolio. 

The operational impact of Looker is also substantial: our team estimates that the number of hours needed to reach critical business decisions has been reduced by nearly 60%, boosting productivity and accelerating the daily operating rhythm. A thoughtfully curated technology stack together with a modern BI solution allows us to stay at the vanguard of the industry. While the DTC sales channel is not designed to surpass the core business of wholesale for Constellation in terms of size, the approach enables unparalleled insights and measurement abilities that will pay dividends for the entire business for years to come.

The home lending journey entails processing an immense number of documents daily from hundreds of thousands of borrowers. Currently, home lending document processing relies on some outdated digital models and a high dependency on manual labor, resulting in slow processing times and higher origination costs. Scaling a business that sorts through millions of documents daily, while increasing efficacy and accuracy, is no small feat. When it comes to applying for a mortgage loan, consumers expect a digital experience that’s as good as the in-person one. Roostify simplifies the home lending journey for lenders and their customers.

No time to spare: Overcoming document processing challenges with AI

Roostify provides enterprise cloud applications for mortgage and home lenders. In order to empower its customers to deliver a better, more personalized lending experience, they needed to automate and scale their in-house document parsing functionality.

As a key component of its document intelligence service, Roostify is leveraging Google Cloud’s Lending DocAI machine learning platform to automate processing documents required during a home loan application process, such as tax returns or bank statements with multi-language support. This partnership delivers data capture at scale, enabling Roostify customers to automatically identify document types from the uploaded file and to extract relevant entities such as wages, tax liabilities, names, and ID numbers for further processing, and make things move faster in the cumbersome lending process. 

Roostify’s solutions leverage Google Cloud’s Lending DocAI, which is built on the recently announced Document AI platform, a unified console for document processing. Customers can easily create and customize all the specialized parsers (e.g., mortgage lending documents and tax returns parsers) on the platform without the need to perform additional data mapping or training. All Google Cloud’s specialized parsers are fine-tuned to achieve industry-leading accuracy, helping customers and partners confidently unlock insights from documents with machine learning. Learn more about the solution from the GA launch blog and the overview video.

Integrating Lending DocAI’s intelligent document processing capabilities into the Roostify platform means more innovation for their customers and tangible results: faster loan processing times, fewer document intake errors, and lower origination costs. Additional support in Google Lending DAI for other languages and more documents like global Know Your Customer (KYC) documents or payroll reports is in the near future.

Full integration of AI solutions

Working together with Roostify’s platform team, we were able to help them solve their document processing challenge through integration of various GCP products such as Lending DocAI (LDAI), Data Loss Prevention (DLP) for redacting sensitive data, BigQuery for data warehousing and analytics, and Firestore for API status. To make it very safe and secure, all data was encrypted end-to-end at Rest and in Transit. LDAI won’t require any training data to process. It is an easy plug and play API.

Here is a sneak peek in the high level deployment architecture for LDAI in Roostify environment:

Here are the steps for processing data:

1. Receives document processing request from the client.
2. API Function directs requests to the pre-processing service. For Async requests a processing ID is generated and returned to the caller.
3. Pre-processing service sends the request for further processing (Long/short PDF conversion), calling other microservices and receives back the responses. Any error in the response received is then sent to the response processing service. 
4. If the response is synchronous, the pre-processing service directs it to the LDAI Invoker service. 
   1. If the response is asynchronous, the pre-processing service feeds it into the Cloud Pub/Sub service.
5. Cloud Pub/Sub service feeds the response back to the LDAI Invoker service.
6. LDAI Invoker service routes the request to the Google LDAI API for classification if there are multiple pages in the document.
7. Document will be split based on LDAI response and then saved in a GCS bucket for temporary storage.
8. LDAI entity interface for single page processing and then LDAI Invoker sends LDAI results to LDAI Response Processing
9. If a request is a synchronous request the LDAI Response Processor sends results to the API Function so that it can complete the synchronous call and respond to the rConnect caller.
   1. If the request is an asynchronous request the LDAI Response Processor will respond to the caller’s webhook and complete the transaction.
10. Finally, Data stored in the GCP bucket will be deleted.

All the responses that come from the LDAI API can optionally feed into BigQuery via the Response Processor, after parsing it through Data Loss Prevention (DLP) API to redact the PII/sensitive information.  Throughout the processing of both asynchronous and synchronous requests all transactions are logged using Cloud Logging.  For asynchronous transactions, the state is maintained throughout the process using Cloud Firestore.

Roostify currently uses this technology to power two different solutions: Roostify Document Intelligence and Roostify Beyond™. Roostify Document Intelligence is a real-time document capture, classification, and data extraction solution built for home lenders. It ingests documents uploaded by borrowers and loan officers, identifies the relevant documents, and extracts and classifies key information. Roostify Document Intelligence is available as a standalone API service to any home lender with any digital lending infrastructure already in place. 

Roostify Beyond™ is a robust suite of AI-powered solutions that enables home lenders to create intelligent experiences from start to close. It combines powerful data, insightful analytics, and meaningful visualization to streamline the underwriting process. Roostify Beyond™ is currently available only to Roostify customers as part of an Early Adopter program and will be rolled out to the market later this year.

Through this partnership, Roostify has enabled its customers to adopt a data-first approach to their home lending processes, which will lead to improved user experiences and significantly reduced loan processing times.

Fast track end-to-end deployment with Google Cloud AI Services (AIS)

Google AIS (Professional Services Organization), in collaboration with our partner Quantiphi, helped Roostify deploy this system into production and fast-tracked the development multifold to generate the final business value.

The partnership between Google Cloud and Roostify is just one of the latest examples of how we’re providing AI-powered solutions to solve business problems.

Introduction

In my experience, I have observed that it’s common in machine learning to surrender to the process of experimenting with many different algorithms in a trial and error fashion, until you get the desired result. My peers and I at Google have a People and Planet AI YouTube series where we talk about how to train and host a model for environmental purposes using Google Cloud and Google Earth Engine. Our focus is inspiring people to use deep learning, and if we could rename the series, we would call it AI for Minimalists since we would recommend artificial neural networks for most of our use cases. And so in this episode we give an overview of what deep learning is and how you can use it for tracking deforestation in supply chains. I also included a summary of the architecture and products you can use in this blog that I presented at the 2022 Geo For Good Summit. For those of you interested in diving even deeper into code, please visit our end-to-end sample (click “open in colab” at the bottom of the screen to view this tutorial in a notebook format).

What’s included in this article

• What is Deep Learning?
• Measuring deforestation in extractive supply chains with ML
• When to build a custom model outside of Earth Engine?
• How to build a model with Google Cloud & Earth Engine?
• Try it out!

What is Deep Learning?

Out of the many ML algorithms out there, I’m happy to share that deep learning or artificial neural networks is a technique that can be used for almost any supervised learning job.

In supervised learning, you tell a computer the right answers to look for, through examples. Deep learning is very flexible, and is a great go-to algorithm. Especially for images, audio, or video files which are types of multidimensional data. This is because each of these data types have one or more dimensions with specific values for each point.

And training a model to classify tree species using satellite images is kind of like an image segmentation problem, where every pixel in the image is classified.

“Deep learning approaches problems differently”

David Cavazos, Developer Programs Engineer

There’s no writing a function with explicit & sequential steps that reviews every single pixel one by one for every image, as traditional software development does. Let’s say you wish to build a model that classifies tree species. You don’t spend time coding all the instructions, but instead give a computer examples of images with tree species labels, and let it learn from these examples. And when you want to add more species, it’s as simple as adding new images of that species to retrain the model.

Measuring deforestation in extractive supply chains with ML

So let’s say we would like to measure deforestation using deep learning; to get started with building a model we first need a dataset that includes satellite images with an even amount of labels marking where there are trees and where there aren’t. Next, we choose a goal, here are a few common ones. In our case, we simply want to know if there are trees or not for every pixel, and so this would be a binary semantic segmentation problem.

And based on this goal, we expect the outputs to be the percentage of trees for every pixel; as a number between 0 and 1. Zero represents no trees, and one represents a high confidence there are trees.

But how do we go from input images into probabilities of trees? Well think about it this way…there are many ways to approach this problem, here are 3 common ways of doing so. My peers and I prefer using Fully convolutional networks when building a map with ML predictions

And since a model is a collection of interconnected layers, we must come up with an arrangement of layers that transforms our data inputs based on our desired outputs. Each layer by the way has something called an activation function, which performs the transformations of each layer before it passes them to the next layer.

FYI Below is a handy dandy table, with our recommended activation and loss functions to choose from based on your goal. We hope this saves you time.

We then reach the fourth and last layer. Depending on our goals at the beginning, we also choose an appropriate loss function that helps us score how well the model did during training.

After choosing layers and functions you will split your data into training and validation datasets. Just remember that all of this work is about experimenting repeatedly until you reach desired results. Our 8min episode gives this overview more in detail.

When to build a custom model outside of Earth Engine

So now that we covered what is deep learning, the next step is understanding which tools to use to build our deforestation model. For starters it’s important to call out that Google Earth Engine is a wonderful tool that helps organizations of all sizes find insights about changes on the planet, in order to make a climate positive impact. It has built-in machine learning algorithms (classifiers) that let users quickly spin them up, with just a basic machine learning background. This is fantastic place to start when using ML on geospatial data, however there are multiple situations where you will want to opt to build a custom model such as:

• You want to use a popular ML library such as TensorFlow Keras.
• You wish to build a state of the art model to build a global and accurate land cover map product such as Google’s Dynamic World.
• Or because you generally have too much data to process that you can’t execute it in just one task in Earth Engine (and are trying to figure out hacky ways to export your data).

Whenever you identify with any of these options, you will want to roll up your sleeves and dive into building a custom model, which does require expertise and of course working with multiple products. But I have good news, using deep learning is a great go-to algorithm.

How to build a model with Google Cloud & Earth Engine?

To get started, you will need an account with Google Earth Engine which is free for non-commercial entities and Google Cloud account which has a free tier if you are just getting started for all users. I have broken up the products you would use by function.

If you are interested in looking deeper into this overview, visit our slides here starting from slide 53 and read the speaker notes. Our code sample also walks through how to integrate with all of these projects end to end (just scroll down and click “open in colab”). But here is a quick visual summary. The main place to start is to identify which are the inputs and which are the outputs.

In our latest episodes for our People and Planet AI YouTube series, we walk through how to train a model and then host it in a relatively inexpensive web hosting platform called Cloud Run in episodes of less than 10mins.

There are a few options presented in the slides, however the current best practice is to train a model using Vertex AI. Do note though that Google Earth Engine is currently not integrated with Vertex AI (we are working on this), but it is with the older (ML predecessor) called Cloud AI Platform (which is the recommended ML platform to use moving forward). As such, if you would like to import your model for detecting deforestation back into Earth Engine after training it in Vertex AI for example, you can host the model in Cloud AI Platform and get predictions. Just note that it’s a 24 hour paid service and so it can cost upwards of $100 or more a month to host your model to stream predictions. It also currently supports the following model building platforms if you don’t wish to use TensorFlow.

A cheaper alternative but without the convenience AI Platform offers is to manually translate the model’s output, which is NumPy Arrays into Cloud Optimized GeoTIFFs in order to load it back into Earth Engine using Cloud Run. Within this web service you would store the NumPy arrays into a Cloud Storage bucket, then spin up a container image with GDAL, an open source geospatial library in order to convert them into Cloud Optimized GeoTIFF files into Cloud Storage. This way you can view predictions from your browser or Earth Engine.

Try it out

This was a quick overview of deep learning and what Cloud products you can use to solve meaningful environmental challenges like detecting deforestation in extractive supply chains. If you would like to try it out, check out our code sample here (click “open in colab” at the bottom of the screen to view the tutorial in our notebook format or click this shortcut here).