Product Managers Tackle The Santa Problem

by drjim on March 12, 2018

Santa is going to need some help making his deliveries on time

Santa is going to need some help making his deliveries on time
Image Credit: Oliver Schafeld

So what’s the one thing that everyone knows about Santa? That he always delivers his gifts to the good boys and girls on Christmas morning. Not the day after Christmas. Or a week later. He gets it there on Christmas morning. As you might imagine, with more and more parents buying things online, the actual process of making sure that gifts get to the people who have ordered them is becoming much more challenging for the good folks at UPS and FedEx. Their product managers are going to have to get creative if they are going to save Christmas…

How The Grinch Tried To Steal Christmas

Last year Christmas fell on an awkward day. Just to make things a little bit more complex, Hanukkah started the day before Christmas. Due to where Christmas fell this year, people got a late start in their Christmas shopping. The last weekend that people could go out and shop at real stores (“bricks-and-mortar”) was a full week before Christmas. What this meant for people like me was that in the days running up to Christmas, the last minute shoppers were going to be turning online to get the gifts that they needed.

Ordering a gift online is all fine and dandy – it really only takes a couple of clicks. However, actually getting that item into your hand before Christmas can be a real trick if you’ve placed your order close to Christmas. Over at UPS they said that the Friday before Christmas was the last time that someone could ship a package with them with the expectation that it would arrive before Christmas. Anyone who sent something after that would have to pay extra to have it sent by air.

As you might imagine, the companies that ship packages in the United States, UPS, FedEx, and the postal service all have a limited amount of space to carry packages. During the holiday season they experience a surge that they don’t see during the rest of the year. As more and more of us start to buy things online, what’s starting to happen is that we are getting very close to exceeding their capacity to transport our gifts to us in time for the holidays.

How Product Managers Saved Christmas

Some product managers had product development definitions that allowed them to be uniquely positioned to take advantage of the shipping challenges that the traditional package carriers were facing. Amazon product managers created what they called “procrastinator’s delight” which was a service offered to their Prime members where they could get one or two hour delivery of ordered items up until midnight on December 24th in select cities. Walmart product managers offered in-store pick up of ordered items until 6pm on December 24th as long as the order had been placed by 6pm on December 23rd.

The good news, if indeed there was any, was that retailers could take a look at their calendars and realized that they were going to be in a bind this year. Hoping to find a way to minimize the disruption that too many orders were going to cause, the product managers at the companies that were selling all of the gifts worked with the shippers. What they did was to forecast the demand that they were going to be seeing and then go ahead and book space on the carrier’s planes to hold their goods. The U.S postal service understood the challenges that everyone was facing and agreed to make deliveries to select locations on Christmas Day. Any product manager who can successfully see into the future like this has something that they can put on their product manager resume.

What can a product manager do if they just are not going to be able to get their product into the hands of a last minute shopper? There are a number of different ways to deal with this problem. UPS had to deal with US$200M in additional shipping costs one year. When Amazon was not able to deliver gifts on time, they provided their customers with $20 gift certificates to try to make up for it. Other retailers in the past have either refunded shipping costs for gifts that didn’t make it on time or went so far as to refund the entire cost of the order.

What All Of This Means For You

Christmas is a special time of year for all of us. This is the time of year that we buy gifts for people in our lives. However, this past Christmas just happened to fall on a day that caused more and more people to decide to go online and make last minute purchases. What this meant was that the package delivery network quickly started to feel the strain. Finding a way to deal with this is something that should be on every product manager’s product manager job description.

It is easy to order something online; however, it can be quite difficult to make sure that that item is going to be delivered to the person ordering it by Christmas. There is always the possibility that the customer could pay more to have a package shipped by air, but few people would want to do this. Retailers realized that they could run into a problem and so they worked with the major shipping companies to forecast demand and reserve space on their planes. Certain retailers, such as Amazon and Walmart, were well positioned to take advantage of the challenge of last minute gift delivery. If a retailer could not complete a delivery by Christmas, then they had other options: they could pay for the extra cost of air shipping it, they could give the customer a gift card, or just refund the cost of the product.

Many product managers look forward to the Christmas season because it can mean a big boost in sales of their product. However, as consumers change their buying habits from going out to stores to now more often buying things online, shipping the things that they’ve bought to them by Christmas is becoming a real challenge. Product managers made it through this past Christmas, but they need to start getting ready to do it all over again this year!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that holding a sale on your product before Christmas would help to motivate people to purchase it before the holiday shipping crunch?

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What We’ll Be Talking About Next Time

Can anyone remember back in the day when there used to be a video rental store on just about every corner? We’d all head down to the rental store on a Friday with hopes that the latest release would be still in stock. We’d browse the aisles, pick out our one or two movies, perhaps grab some popcorn and then check the movies out for two nights. This of course meant that there was a mad dash back to the store on Sunday night in order to make sure that we didn’t get charged a late fee for keeping the movies out too long. Too bad DVDs and streaming services killed the product development definition for all of those video rental stores. Or did they?

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