Many traditional brands face the challenge of wholesale reinvention in the Digital Age. Richard Robinson describes working with a global delivery giant on a new approach for the Management Consultancies Association…
“Despatch and delivery companies have been disrupted by Digital. Shopping apps, same-day delivery, click-and-collect are transforming how things are done.” Richard says it’s far easier for greenfield companies to keep pace with digital change, they have no baggage to discard. “So it was worrying to work with a business that was more of a Greenland-field site.”
Richard describes the first Oystercatchers meeting with the client: “He was hard to miss. Running to fat, rather like his business model, dressed in garish matching red greatcoat and trouser, with white trim, sporting a trendy hipster beard. Our client was pretty jovial and asked what I wanted for Christmas ‘for being a good boy’. Intrigued to know what metric he was using (not one my wife would recognise), and surprised to find myself on his knee, I nevertheless lost none of my consulting sharpness and flipped the question over. ‘What can we do for you?’ That’s how we got ourselves invited to his main premises. In the Northern Powerhouse.”
There were obvious weaknesses in Ess-See’s business model. “This is a seasonal enterprise. All deliveries are concentrated into a single day (well, single night really). But it was masquerading as a 365 days a year, 24/7 operation. The company held assets and stockpiles – warehouse space, stables, miles of ribbon – that weren’t needed in spring or summer. Completely inconsistent with an agile, just-in-time approach. The whole business could be done as a pop up – and there was no reason why it had to be in the North, especially as the lower wage bill was offset by the unionised militancy of what Ess-See rather quaintly called his ‘Little Helpers’.
Our first recommendation was to move the operation closer to clients. There’s huge demand in California, and also big concentration in parts of Australia. So this year we’re operating out of Santa Cruz, quite near the beach. Next year we’re in Perth…
“We also recommended a move out of manufacturing. No serious delivery business makes its own stuff. So we created a more active sourcing strategy, with most goods supplied by China and Korea.”
Richard describes other problems encountered.
“There was much to admire in Ess-See. Incredible energy! Drumming up demand in his core sales period (November/December time in parts of Europe, July to December in the UK and US), he really did seem to be in two places at once. Sometimes more. But reliance on face to face selling and – incredibly – letters in the post for orders was ridiculously old-fashioned. It led to dire CRM and demand management.
So, we worked with a tech company to create a digitised ordering system, the Stocking App. The app has also allowed much better understanding of customers. Actually, Ess-See had no good intelligence on customer habits at all. So we deployed Big Data analytics to get a better handle on who’s naughty and nice, and introduced a reward scheme, with personalised deliveries linked to real-time behavioural read-outs. This has streamlined despatch volumes, especially in some wealthier neighbourhoods, by up to 75%.”
Oystercatchers’ tackled commercials. “To be honest, we couldn’t work out how he’d kept going. The business wasn’t making any money. We talked to investors, taking Ess-See with us. But they didn’t seem to believe in him. It got rather tense when Ess-See said threateningly ‘I know where you live’. So we came up with different approaches.
First we disposed of the North Pole location. A nice man called Mr Putin bought most of it. He thinks there’s some kind of mineral wealth there. Then we introduced a new system: Christmas Eve Prime. For a single annual payment, households get as many free Christmas delivery visits as they like. After a few teething troubles with the ‘I wish it could be Christmas every day’ brigade, the model has settled down and our client’s margins are now fantastic.”
Despite Oystercatchers’ success, Richard suggests that the project has been far from easy, with much resistance to change within the business. “There are always some die-hards. They just wouldn’t wake up and smell the eggnog. Competition from Ocado. Possible use of Christmas drones. Apple’s virtual chimney. Yodel’s new fleet of electric reindeer.
Regardless, the Little Helpers threatened strike action. But a 250% increase in Christmas sherry allowance did wonders for morale. So did Californian relocation, especially the opportunity to star in the next Schwarzenegger blockbuster. Of course, there were a few redundancies. The main navigator got very emotional. In fact, he looked pretty drunk judging by that big red nose. But we were clear: Satnav and Uber are the future.”
In an MCA exclusive, Richard unveiled Ess-See’s new business brand. “We toyed with We Noel What You Want, Black 25th and Cybermas Day. But we think Yule Love It is just right.” Ess-See himself is a changed man. “He’s been on Time cover, shed 60 pounds and is believed to be dating Taylor Swift.”
New market opportunities were identified. “There’s no reason why Yule Love It couldn’t challenge Easter Bunny’s springtime chocolate monopoly. But I think Ess-See really wants to go after the big one. I need to be careful what I say here. But if I were a brand named after a South American river, I’d be pretty worried.”
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