The festive preparation towards the most wonderful time of the year began when Black Friday ended. In turn, businesses are now gearing up in the hopes of not only bringing joy to their customers but also increasing their profits.
We wondered how Santa’s supply chain would work. Feeling festive, our logistics team decided to look into Santa’s preparations.
Santa’s Supply Chain
Santa and his elves work hard to prepare and deliver presents to children on the “nice” list.
At first glance, Santa’s manufacturing and distribution facility (the North Pole) is not ideally located from a logistical perspective. However, he has total control of his production and achieves tremendous economies of scale in production by having a single manufacturing facility (Santa’s Workshop).
In addition, The North Pole location is also a brilliant financial strategy. Records show that it is excluded from all government regulations and taxes as it is located in the Arctic Ocean. It is not owned by any country and is considered “international territory.”
Santa has the logistical and fulfillment challenge of visiting every customer/location combination in 24 hours. Actually, it is a period of 31 hours. This is all done through his own logistics fleet of “an eight tiny reindeer and sleigh.”
Santa Claus Logistics Facts
- If each present is 7cm x 7cm x 10cm, Santa’s warehouse must be over 9.7 million square meters, assuming the present can be stacked 10 meters tall.
- Santa would need 2.3 billion square meters of wrapping paper to wrap all the presents.
- Santa will have to store many Christmas cards in his warehouse. 45% of all sent cards are during the Christmas period.
- The world’s largest cargo ship would take eighty-nine trips to deliver all the presents.
- Speedy Santa Santa would need to travel at 2.340.000mph, visiting 822 houses every second to complete his worldwide Christmas deliveries.
Retail Challenges in the Festive Season
Don’t think that consumers are shopping online less this holiday season than in years past. Online sales have reached $109 billion so far in 2021 – a significant increase from the $90 billion we were at this time last year.
Considering the supply chain crisis, many retailers developed a proactive strategy to start pushing enticing deals to shoppers in October and early November instead of waiting until Black Friday and Cyber Week to help ensure products arrive in time for the holidays.
Before Christmas, communication between clients and fulfillment companies is essential in preventing product shortages and avoiding late deliveries.
Using data analysis, retailers can gather data consisting of past sales figures, which, when analyzed, can help brands anticipate the significant trends of the Christmas season.
However, forecasting consumers’ behaviour can be somewhat unpredictable when the festive season is in full swing. Best practice dictates that most retailers are expected to hold increased seasonal stock levels, focusing on their best-selling items. Maintaining high inventory accuracy means they don’t leave their customers empty-handed.
Companies must start to align priorities ahead of winter with each partner to prevent delays and anticipate and mitigate any possible unforeseen situations. These can include last-minute delays or disruptions, immediately affecting a Christmas fulfillment strategy.
The key to a successful Christmas e-commerce season is understanding what will be in demand and analysing the market and consumers’ behaviour. If the supply matches the need perfectly, companies can expect to achieve the desired profit for this peak season.
Are you interested in seeing how we can help your company improve its supply chain processes? Contact our team to find out more.
Maybe we can’t promise flying reindeer,
we can help you with almost any other
e-commerce query during this festive season.
