Nothing sums up the enchantment of Christmas quite like Santa Claus’s epic annual sleigh ride. A rotund, rosy-cheeked, white-bearded figure in red being dragged by a herd of reindeer at break-neck speeds across the globe, visiting every single child to drop off their presents in time for Christmas morning.

It’s a feat so incredible that NASA even tracks his journey…

But whatever you believe powers this legendary trans-continental dash - Christmas cheer, magic reindeer, special reindeer food - we’ve got news for old Santa. It may no longer be necessary. In fact, the way the world is going, Santa Claus could soon be spending Christmas Eve with his feet up. Although his elves would need some serious retraining first.

And this is why…

In the future, Santa’s elves will be building “toys” in code

I am a child of the 80s and 90s; my Christmases were characterised by piles of colourful plastic objects. Presents meant toys, and toys were physical.

But this is 2022, and our research is telling us something very clear – physical products are slowly being replaced by digital ones. In fact, 38% of everything that is ordered online is now a digital product.

Just let that sink in…over a third of everything we buy online is not a physical product, but a coded programme of zeroes and ones.

This is big news for Santa’s elves. The old skill sets needed to whip up tens of thousands of presents by hand are in danger of becoming obsolete. Ability with a hammer will have to be replaced with mastery of programming languages. To meet the demands of the kids of Christmas future, Santa’s elves will need to learn to code.

Children have digital identities that demand presents, too

So, what sort of things will Santa’s modern elven workforce be learning to programme? Video games? Well, yes. But even here we see a new world emerging.

Video games were a big part of the Christmasses of my childhood, too. But they were still very much a physical thing. The excitement was all about finding that new console, be it a Gameboy, a Megadrive, a Super Nintendo or the original Playstation, or a new stack of game cartridges wrapped up under the Christmas tree.

Today’s youngsters already have a different relationship with video games. For one, they play on multiple devices - not just consoles and PCs, but tablets and mobiles, too. The way they access games is also very different these days - not through physical disks and cartridges, but via the shared digital realms of the cloud and, increasingly, the metaverse.

But the biggest change of all is the way that gaming has shifted the way youngsters view themselves.

The fact that 94% of 16 to 24 years olds say they are active gamers (we can guess at a similar figure for younger kids) is not too much of a surprise. But the fact that 51% of these young gamers say they consider their gaming avatar to be a part of their identity is hugely significant. It tells us that, through the time they spend in the cyber worlds of video games, youngsters view themselves as digital as well as physical beings. Part flesh and blood, part code.

The plot thickens. 51% of gamers say they have spent money on in-game items like cosmetics and skins. 64% of 16-24 year olds say that they would be interested in buying the same products for themselves as for their avatars.

That’s why we’re seeing the likes of Nike, Adidas and Gucci entering this brand new market by producing digital products for exclusive use in cyberspace. Believe it or not, you can buy a digital Gucci bag on the gaming platform Roblox - at a higher cost than it retails for in real-life.

This all may be news to Santa, but he needs to act fast. If children aren’t to be disappointed come Christmas morning, then it isn’t just video games and consoles his elves need to be creating in code - Christmas lists will soon be full of digital products for their avatars!

The end for Santa’s sleigh?

The good news for Santa is that delivery of these digital presents makes life a whole lot easier for him. Although on the subject of delivery, good old St Nick is already in danger of falling behind the times…

The world has long marvelled at Santa’s ability to deliver toys to children the world over in the space of 12 short hours. But thanks to Amazon, even 12 hours is no longer the benchmark for speedy delivery. Our research tells us that 4% of global shoppers expect products to be delivered within 2 hours!!!

The switch to digital products will help Santa catch up with the times. By refitting his sleigh garage with a bank of servers and recruiting a savvy team of IT-literate elves, he will be able to make digital deliveries at global scale more or less instantaneously.

But is it time for him to park his sleigh permanently? We’re unlikely to get to the point where everything people buy - or everything kids ask for as presents - will be digital. But with more than half of people under the age of 44 already saying they would prefer it if their purchases were instantly downloadable, the volume of physical goods Santa has to deliver is likely to get less and less.

But will Santa continue to hold sway with digital kids?

Santa revolutionising his offer to keep up with modern kids is one thing. But will he continue to hold the magical power over them he has had for generations past?

We all know today’s kids are finding influence in new places - particularly from online influencers. In fact, when it comes to shaping young people’s purchasing behaviour, influencers come second only to friends these days.

For all intents and purposes, Santa is an influencer. But is he visible enough to compete with today’s social media stars?

If he wants to stay relevant, he needs to step out of the shadows of the North Pole and make sure he has a profile where his followers are - on TikTok, Instagram and YouTube. After all, 55% of under 16s say that they want to buy something that their favourite YouTube or Instagram star is using or consuming, and 14% say that they want to buy direct from influencers.

If he continues to be a social dinosaur, Santa is at serious risk of losing his influence over the children of the world.

And as a final thought, the days of the written Christmas list should be over, too…

How long does it take Santa to read all those Christmas letters he gets sent. What’s the carbon footprint of all that paper? It’s time to get with the programme, Santa. Why not create a voice app so that children can add to their Christmas list as and when they want… with an AI instantly logging their choices on his central present database? Fast, efficient, simple - everything a digitally literate Santa Claus should aspire to be.

It isn’t just Santa who needs a rethink

Santa is not alone in having to face up to new digital realities. With consumer behaviour changing at such a fast pace, businesses at large are facing the challenge of a full digital transformation, including the digital training and enablement of their workforce.

@Santa – if you let us know where you’re at, Wunderman Thompson Commerce and Technology would be happy to come and consult on how you can stay relevant in 2022 and beyond.

Merry Christmas!

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