Santa Claus goes virtual: Retailers seek loyalty as COVID-19 keeps shoppers away from stores

For the past century, retailers used Santa Claus photo-ops as a marketing strategy to draw buyers into malls. Families marched past department stores and coin-toss fountains to find Christmas trees, fake snow, harried photographers — and of course, Santa Claus in his big red suit. But this year, retailers like Macy’s are foregoing foot traffic for online holiday cheer.

Santa Claus has become an expected service from major retailers. But this year thanks to the coronavirus pandemic, retailers are forced to social distance Santa. From the comfort of their own homes, children will be video calling Santa Claus to tell him what they want this holiday season. Unfortunately for retailers, that means customers will not be walking into malls and stores this holiday season. Instead retailers said they hope the virtual services will help them maintain brand loyalty.

“We want to make sure that [our brand] is at the top of families’ list when they are comfortable to come back out. We want to continue to build that loyalty and trust and bring them back when they’re comfortable,” said Michael Sneed, assistant director of marketing at Swire Properties, who is in charge of “running all things Santa” at the Brickell City Centre shopping center in Miami, Florida.

Big mall operators like Westfield and Simon Property Group are relying on their holiday entertainment vendor, Cherry Hill, to facilitate online visits. Some smaller malls are having their own Santa meet with kids on appointment through common video call technologies like FaceTime, Zoom or Skype.

“Kids want that experience — they want to tell Santa what they want. If the experience needs to be different this year to have that connection with your customers, we’re going to do that,” said Heather Crowell, executive vice president of strategy and communications at PREIT, a Philadelphia-based mall chain which filed for bankruptcy earlier this month but is running uninterrupted during the proceedings.

Other retailers are outsourcing their Santa experiences to call centers like Georgia-based Jingle Ring, a pandemic-born business that employs hundreds of work-from-home Santa Clauses equipped to customize video calls with a real-time data feed to customize experiences based on a child’s age, language (including ASL), faith, race and special needs.

“We have hundreds of Santas concurrently serving families in the same 15-minute time slots,” said Walt Geer, CEO and co-founder of JingleRing. “This is a totally different way for a real estate portfolio to think about monetizing the holidays.”

While analysts haven’t been able to parse the impact of Santa Claus experiences on holiday in-store sales from the cyclical rise in demand for consumer goods during the holidays, anecdotally, retailers say that in-person Santa Claus experiences bring more dollars into their stores.

“Going to see Santa creates a memorable experience where families will also cross-shop, get exposure to the mall, and maybe see a new store. It’s generally a marketing technique,” said Ami Ziff, director of national retail for Time Equities, which owns shopping centers, malls and street-front retail locations in 25 states.

Retailers look to the future amid global crisis

Mall operators and retailers are counting on their virtual Santa strategy to help them develop customer loyalty that will pay off after the pandemic — but some of them won’t make it that long.

The holiday season could mean more disappointment for brick-and-mortar retailers this year. Shoppers expect to spend 7% less this year than they did last year, and of the money spent on holiday gifts, fewer dollars will be spent in-store, according to Deloitte’s 2020 holiday retail survey. Over half of holiday shoppers said they feel anxious about shopping in-store, and 75% plan to order presents online compared to 62% in 2019, according to Deloitte.

Online spending is expected to grow up to 33% this holiday season to $189 billion in the U.S., according to Adobe Analytics. Online orders have replaced shopping for many Americans during the coronavirus pandemic, and Amazon alone beat revenue expectations in the third quarter, making a record $96.1 billion compared to the $92.7 billion expected.

In-person Santas kept alive

During the coronavirus pandemic, most malls will also offer in-person Santa visits by incorporating creative social distancing measures. Parents will make appointments to make sure lines don’t get too long; “Santa guards” dressed like elves will make sure kids don’t rush up to Santa in what could be a snotty nightmare for Santa Claus, who is often in at least two high-risk categories for the coronavirus (age and weight), according to Steven Arnold, president and CEO of IBRBS, a professional society for holiday entertainers.

Bass Pro Shops, one of the largest Santa employers, will be offering masked, in-person Santa visits with temperature screenings, social distancing and acrylic barriers. Some malls are getting creative with their set designs, placing Santa behind plexiglass snow globes and picture frames or up in sleighs sitting 8 feet in the air.

“We wanted to keep as much of the Santa experience alive as possible by continuing to offer an opportunity for family photographs and meet-and-greets with Santa. It’s a great way to get people out of their homes and back to our centers, bringing a sense of normalcy back to the entire community,” said Rocell Viniard, director of portfolio marketing at Brookfield Properties, which is also offering virtual Santa experiences through JingleRing.

Sarah Paynter is a reporter at Yahoo Finance.

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