Many traditional brands face the challenge of wholesale reinvention in the Digital Age. Richard Robinson, Managing Partner at Oystercatchers, describes working with a global delivery giant on a new approach.
“Despatch and delivery companies have been hugely disrupted by Digital. Shopping apps, same-day delivery, click-and-collect: these are transforming how things are done.” Richard says it’s far easier for greenfield companies to keep pace with Digital change, since 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 his first meeting with the client – in a shopping centre in Croydon. “He was hard to miss. Running to fat, a bit like his business model, dressed in rather garish matching red greatcoat and trousers, with white trim, though sporting quite a trendy hipster beard. Our client – you all know him since his personal rebrand as Ess-See – was pretty jovial and asked me what I wanted for Christmas ‘for being a good boy’. Intrigued to know what sort of metric he was using (not one my wife would recognise), and a bit 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?’ Typical spin sell. That’s how we got ourselves invited to his main premises. In the Northern Powerhouse.”
There were some 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 and miles of ribbon – that just weren’t needed at all in spring and summer. Completely inconsistent with an agile, just-in-time approach. The whole business could be done as a pop up – and there’s 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’. So our first recommendation was to move the operation closer to clients. There’s huge demand in California, and also a 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 never thought we’d pick up a tan working for this client, but Ess-See’s happy, although the scarlet onesie he wears for surfing is a bit embarrassing.
“Our other initial recommendation was to get out of manufacturing. No serious delivery business makes its own stuff. So we put in place a more active sourcing strategy, with most of the goods now supplied by China and Korea.”
Richard describes other problems he encountered. “There was a lot to admire in Ess-See. Incredible energy! In 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 the reliance on face to face selling and – incredibly – letters in the post for orders was ridiculously old-fashioned. It led to dreadful CRM and demand management. So, we worked with a technology company to create a new Digital ordering system, the Stocking App. Once we’d got expert advice from Ann Summers, it was a great success. The app has also allowed much better understanding of customers. Sure there was a lot of (slightly creepy) waffle about ‘he knows if you are sleeping, he knows when you’re awake’. But actually, Ess-See had no good intelligence on customer habits at all. So we deployed Big Data analytics to get a much better handle on who’s naughty and nice, and have introduced a reward scheme, with numbers of items in personalised deliveries linked to real-time behavioural read-outs. This has actually streamlined despatch volumes, especially in some wealthier neighbourhoods, by up to 75%.”
The other thing Oystercatchers’ needed to tackle was the commercials. “To be honest with you, we couldn’t work out how he’d kept going all these years. The business wasn’t really making any money at all. We talked to some investors, taking Ess-See with us. But they didn’t seem to believe in him. Actually it got a bit tense when Ess-See said threateningly ‘I know where you live’. So we had to come up with some 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 can 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 lots of 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. Despite these threats, the Little Helpers under their ring leader – looked even more like Karl Marx than his boss, kept shouting ‘Turkeys don’t vote for Christmas’ – saw our plans and threatened strike action. But a 250% increase in the Christmas sherry allowance did wonders for morale. So did the Californian relocation, especially the opportunity for the Little Helpers to star in the next Schwarzenegger blockbuster, and maybe have their own spin-off, just like the Minions. 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 has unveiled Ess-See’s new business brand. “Ess-See thinks it’s time. We toyed with We Noel What You Want, Black 25thand Cybermas Day. But we think Yule Love It is just right.” Ess-See himself is a changed man. “He’s been on the cover of Time Magazine, has shed about 60 pounds and is believed to be dating Taylor Swift. The allegations about a Columbian ‘mule’ sideline were dropped after an injunction and he’s releasing his new single, Step into Business.” Richard has identified new market opportunities. “There’s no reason why Yule Love It couldn’t challenge the 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.”