As well as partridges, turtle doves and calling birds, Christmas typically heralds an influx of digital investment for businesses. Festive cheer and loosening purses compel bosses to seek a step-change in their sales and customer service platforms to take advantage of increased seasonal demand.
However, the most archetypal Christmas enterprise of them all – “Santa Inc” – remains resolutely traditional in its approach. Ever since his elves first started making toys, Santa has delivered presents to well-behaved girls and boys around the world on Christmas Eve in exactly the same, antiquated way.
How long is this sustainable?
The growing global population, increased air traffic and destruction of ancient elf and reindeer habitats are all challenging an operating model which has functioned perfectly for centuries. The business imperative to do “more with less” is as true in Lapland as it is elsewhere. If Santa had his own wish list this Christmas, Gate One would advocate exploiting a range of new technologies to boost Santa Inc’s capability and ensure no child is disappointed on Christmas morning. Here are three examples:
1. List-to-chimney integration
Santa’s factory has a major over-reliance on paper-based systems, constantly receiving and checking lists before sending the requests to manufacturing. Whilst the customer experience is good (scoring very highly on customer retention), the value is eroded unless supported by an efficient back-office. Santa Inc – being a vertically integrated organisation where everything from manufacture to delivery is covered under one roof – would benefit from greater integration between planning, manufacturing, warehousing and delivery. This approach would optimise operations and could enable:
- Every gift to be tracked through from request to dispatch.
- Planning to be automatically updated based on real-time customers wish lists.
- Integration with the myriad of connected devices in our homes such as Amazon Echo and Google Home, providing increased virtual touchpoints with customers.
- Data about popular products to be readily available to negotiate volume-based discounts on raw materials with suppliers.
- An automated warehouse to streamline the pick/pack/ship process without over-burdening the highly seasonal demand on elf labour.
Santa Inc’s current customer relationship management (CRM) experience leaves much to be desired: hand-written Christmas lists get lost in the post; gift requests get wrongly coded into the manufacturing process; and post-delivery feedback is never sought. To help manage peak demand in front-end communications, we advocate the use of elfbots – virtual assistants who can provide real-time support to customers, integrating with existing platforms such as the Santa Inc website, Facebook page and SMS.
This low cost and scalable solution would mean that a high percentage of simple interactions could be automated, releasing the real elves to work on those highly complex “a bit naughty but mostly nice” decisions about present allocation.
3. Sleigh drones
Amazon, a major Christmas retail disrupter, is currently piloting drone delivery and Santa Inc is another candidate who could benefit from this technology. A growing global population means a rising proportion of households without chimneys and an overworked reindeer team – so this idea scores highly for delivery efficiency.
In years to come, the drones could be automatically programmed with addresses directly from the warehouse system, improving drop rate accuracy and creating a safer working environment for Santa and his reindeer. Santa Inc should closely monitor this technology as it grows to pick the right time to follow – higher upfront investment will eventually be balanced out by lower running costs year-on-year. Not to mention happier reindeer.
A Christmas Miracle?
Santa Inc, a bastion of traditional manufacturing, faces ever increasing threats from new and agile entrants to the toy retail and distribution market. Now is the right time to embrace innovation and introduce disruptive digital technologies to this business – from simple solutions like chatbots to end-to-end product management systems.
This way of thinking is not a Christmas miracle, it is a set of logical responses to an increasingly competitive marketplace. The benefits of rethinking your operating model in the brave new world are many and varied, and far more innovative than a boring old website refresh. After all, digital isn’t only for Christmas.