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Santa Claus & The Data-Driven Christmas

December 11, 2012

During a recent deep dive into some holiday marketing and retail research, it occurred to me that Santa’s job at the North Pole must generate a substantial amount of data. The question I came to was this: did he even know it? If so, was he using the data to improve distribution procedures and global delivery operations on Christmas?

It was a mystery I had to look into.

Last week, I had the pleasure of mailing my children’s annual Christmas gift lists to The North Pole. Just before I went to my local Post Office, I took the opportunity to add a list of interview-style questions in hopes that the jolly old man himself would send an answer back.

A few days later, I received a response! And so, I thought I would share them with you. (but please, only read on if you still believe in Santa.)

Are you collecting any data throughout the year as you work to deliver gifts to boys and girls in time for Christmas?

Oh, HO, HO, HO absolutely! We routinely collect a wide variety of structured and unstructured data that ranges from detailed customer profiles on over a billion children to sensor data gathered during our toy and doll manufacturing process to gift-package radio frequency identification (RFID) tracking around the world. 

Consider, if you will, that it’s no small feat to collect, store and analyze all that Naughty/Nice Child Data (NNCD) in real time. In fact, that’s part of the reason why we have deployed our Elf on the Shelf agents to assist in gathering large volumes of Offline Sibling Sentiment Data (OSSD) that we can capture in our Elven Internal Call Center (EICC) and then add it to the individual customer profiles on a nightly basis. Programs like that allow me to generate and use “one view of a child” across all channels so I can accurately align my lists to their requests.

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What are you doing with the data that you gather?

First and foremost, we want to make sure that we’re making effective use of daily integrated multi-channel good-deeds data to detect and adapt to changing behavior patterns of the children. Our analytics include cross-family conversion reports, requested gift profile attachment, customer proximity, and believability status.

If a child has worked hard to be nice, we want to make sure we work even harder to get them the gift they requested and have it waiting under their tree in the morning.  We also want to be sure that if a child has been naughty, we have assigned them an appropriately sized chunk of coal that we receive from eco-friendly mining operations managed by our Certified Christmas Partner Network. (CCPN)

Now, I suppose you can imagine that none of this is really that new to us. This is what we have done since Topper and I first carried that bag of toys over the mountain to Sombertown. The difference now is that we have a much bigger operation and we’re using far more sophisticated tools, talent and technologies to deploy smarter data-driven strategies. 

You should also know that Ms. Claus requires that I capture a fair amount of cookie data. Now, that’s not the HTTP cookie data that you’re used to gathering in digital marketing campaigns. I’m talking about the amount of cookies and milk that I consume from the all the lovely plates and cups that little boys and girls leave out for me. My cholesterol has gone up in recent years as processed cookie dough is used more often than it used to be. So, I need to keep an eye on it.

Would I call that big data? Only in relation to the size of my belly! HO HO HO!

How has big data changed your processes at The North Pole and beyond?

Making effective use of data has helped us to improve operations across the board. For instance, we stream a fair amount of high velocity data off of the reindeer fleet so we can do predictive maintenance on their flight tackle. We also monitor the physiological parameters of each individual animal. In order for our reindeer to achieve near or greater than light speed travel, they need to be in prime condition. We actually monitor them all year long, including downtime and practice runs, using embedded jingle sensor data. The idea came from Formula One Racing, of which many little boys seem to enjoy based on our audience segmentation reports that track requests for remote controlled race car toys. 

We do this using our big data platform, codenamed KRINGLE, which runs in a highly secured data center we keep naturally cooled by arctic air. On a nightly basis, we run advanced analytics and update reports for profiling, manufacturing and distribution in less than 10 seconds. That’s a lot better than the 3 to 4 weeks it used to take hundreds of elves doing it by hand-calculated spreadsheet. They are now free to focus on creating new and exciting toys for the children!

Furthermore, we can finally combine various data sources that used to be iglooed (although I think you use the term “siloed”) so that we can get a clear view across the Christmas enterprise.

How do you see data influencing future changes to your holiday organization?

Over several hundred years, we’ve seen the world go through immense changes and explosive population growth. That means that each year, our job gets more and more complex.  We are, essentially, a retail distribution operation similar to what you see in places like Amazon.com. In fact; you can take a look into their operations to get a sense of what it REALLY looks like up here. Just imagine that same scene with elves and holiday decorations, and you’ve got a good idea of what we’re dealing with.

You can see that if we didn’t have a consolidated big data platform, we’d be facing a massive uphill struggle as we’d be overwhelmed by data that’s not being put to good use.  

So, for example, moving forward we will keep using geo-location, mapping, mobile device and third-party data to help create ideal transportation paths for my sleigh route on Christmas Eve. We call it “chimney mapping,” and it provides optimal delivery patterns to ensure that we get every gift delivered on time.  Imagine if FedEx had to deliver all of their packages processed during the year… in a matter of 12 hours. That takes a lot of data, a lot of advanced analytics, and a fair amount of strategic planning. (Not to mention a dash or two of Christmas magic!)

Our overall goals for the data-driven Christmas of the future is to drive smarter operations, build enhanced customer understanding and improve our gifting supply chain.

We want to run The North Pole more efficiently and more enjoyably by finding and acting on every possible opportunity to eliminate waste, lower costs, spread Christmas spirit and increase global peace and happiness.  By generating new analytic insights based on the most recent and detailed information we find from every available source, we can manage the holiday at a more granular level.

Do you think you could send me that new digital SLR camera I asked for?

Yes, Graeme, I can do that. You’ve been a good boy this year.

 

We hope you enjoyed this fanciful fable about big data problems at the North Pole. IBM and the "Elves on the Shelves" are ready to help retailers tackle their data challenges every day of the year. Please visit ibm.com/bigdata for more information. Happy Holidays!