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How 'The Elf on the Shelf' Conquered Critics and Remade Christmas Commerce

Lumistella co-founder and co-CEO Christa Pitts talks about her family's global domination of the yuletide market, and how they've managed to marry big business and holiday magic.

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The hardest part about interviewing Christa Pitts, co-founder and co-CEO of Christmastime IP giant Lumistella — the brand behind The Elf on the Shelf and its growing line of experiential products and content — is knowing you can't tell your kids you interviewed one of the creators of The Elf on the Shelf. Because, you see, children believe their cute-as-a-kewpie doll Lumistella figures and accouterment to be the stuff of magic.

The Lumistella Company

Parents might know better, but no one would deny that Pitts, along with her sister Chanda Bell and their mother Carol Aebersold, have, as the company's co-founders, spun something remarkable out of a private family tradition. It began in the girls' childhood home in Marietta, Georgia, where Aebersold kept her daughters enthralled every December with the notion that some of Santa's scout elves would descend on their home, fly back to the North Pole each night with feedback for his naughty-and-nice lists and return each morning, newly positioned somewhere in the house. And then once Santa delivered his bounty on Christmas Eve, he'd scoop up his elfin reconnaissance sidekicks and head back north until next year.

In 2005, Bell and Aebersold co-authored a book based on their self-fashioned legend, and they and Pitts formed Atlanta-based CCA and B, LLC. (They officially re-registered as the more memorable Lumistella Company in 2020.) Those ubiquitous elves have since become as baked into Christmas lore as gingerbread men and Rankin/Bass cartoons. From lucrative licensing arrangements with Netflix to a live-touring experience and a merchandising footprint in nearly 20 countries across the globe, Lumistella has transcended its humble roots as a riff on time-tested symbolism. As Pitts told us in a recent phone conversation less than two weeks before Christmas 2021, the goal now is nothing less than "to own the stories of Santa's North Pole." (Down to its URL.)

Lumistella Company co-founder and co-CEO Christa Pitts
Image credit:The Lumistella Company

Below are edited excerpts from our chat, featuring Pitts' candor about coming out the other side of supply chain snags, maintaining personal standards amid rapid international scale and whether Lumistella has its sights set on dominating a diversifying holiday market outright.

Related: How New or Emerging Brands Can Get Big Holiday Shopping Coverage

How important is it for you to be out there and promoting the company's success this particular winter, when supply chain issues and ongoing pandemic pressures have affected all businesses, including yours?

When people are feeling this great sense of uncertainty, and you add in all of the supply chain and logistics headaches, it's nice to be able to bring families a sense of joy and a sense of normalcy that your Christmas is going to continue, that the holidays are still going to be festive. That's really the goal of my meetings and discussions with people — just reinforcing that magic of the season.

Is it getting harder for you and your team to sustain that central idea of magic and tradition as the company grows at such a massive scale?

Yeah, you know, I think that's an area where we're very fortunate in the way we're situated in our office. It's Christmas 365 days a year, 24-7. There are Christmas trees everywhere. There's Christmas music playing. People have Santa Claus actually on their voicemails in many cases. We're just an environment that thrives with people who think that. Our team is very positive. They love being a part of something that feels so magical and different from what most people do in their day-to-day corporate environment.

Naturally, we're a business. We have all of the same pressures and considerations of any business, certainly being family-owned has additional layers that potentially you don't have if you're a larger business with far more resources. But I do think a bit of our secret sauce is that people love working for Santa and the idea that represents, and that's really what we try to foster as our corporate culture.

Have you guys considered cornering the entire holiday market, perhaps acquiring a Kwanzaa-related property or the Mensch on a Bench line?

It's a great question. You know, I actually have talked to [Mensch founder] Neil Hoffman on many occasions, and obviously, now there are a lot of products out there that have some assimilation or have found some success due to our world. We've really spent a lot of time thinking about our vision and our mission and our goals, and while we work at representing all sorts of backgrounds in our storytelling, we haven't quite moved in that direction yet to try to capture all the holidays in the December timeframe.

With success has come criticism, specifically that your products function as a kind of prying surveillance over kids. Do you just choose to brush that off and stay the course?

First and foremost, our mantra internally is to stay focused. If you follow down the trail of every single bit of criticism or feedback, you're going to end up in a swirl that nobody wants to be in. So you just have to define what it is that you're doing and why you're doing it. In our case, the Elf on the Shelf, which we feel is our hero, it's a tradition based on our own family experiences. So when you hear someone say, "Ooh, it's training children, that it could be a surveillance state," you know, I had it growing up and I feel like we turned out just fine. There's a piece of me that wants to be like, "Do you know how much information your phone has?

The other thing we hear quite a bit is, "Oh my gosh, it's so much work." The book itself really only has that the elves fly back and forth with Santa Claus and reports on whatever happens to be going on in your home. It doesn't layer in all of these other things that sometimes people make it to be. It really is just about how your family celebrates the tradition.

So to put it through my Jewish, Hanukkah-centric lens, the Elf is just a bit of a yenta.

[Laughs.] Very, very true. Yes. But you know what? He can also report on all the good things you're doing. We've had children we heard started brushing their teeth far more regularly or the elves knew that they'd made their bed.

A little extra accountability can only help busy parents.

Why not, right?

Given how well-defined your culture and mission are, has it been challenging to bring new partners like Netflix or representation like Creative Artists Agency into the fold?

We've been extremely careful with our brand and making sure we choose partners who really get it and understand it. Our partnership with Netflix was not something that happened overnight. We had meeting after meeting with them, going back years. We met with other studios. We worked very hard to make sure we had the right agent partners, that we chose the right production partners — people who understood our vision and what we were going for. Our desire is to maintain creative control, which is very important to us. It's also important for us to protect our intellectual property. So there are a lot of checkboxes that we put together to make sure we had the right team in place before we moved forward with it. We've really looked for the best, the bright, the smartest, the most interesting people who believe in what we're doing, and it's those people who continue to help make us successful. I feel very passionate that our people and our partners are making that happen.

Neither you nor your sister or mother were veteran business owners when this all started, so when did you begin feeling self-assured about your ability to oversee something this sprawling?

As a female-led, family-owned business, I'm sure you can appreciate the general challenges that were out there for us, not just in the fact that no one had any idea what an elf in a box that talked to Santa was all about. We had to explain that from the start and really focus on building our brand. But then we heard people say, "Why don't you let real business people take over?" We heard, "Isn't it time to get a man in there who knows how to run things?" And while I very much appreciate all of the feedback we've received, there is absolutely no replacement for the passion, the drive, the willingness to put everything at risk to make this business grow. To have this happen, no one is going to do that for you.

We also had a mentor who told Chanda and I fairly early on that you have to hire for where you're going and not for where you are because what you need when you first start is not what you need as you continue to scale. And while we have some people who have been with us for a very long time, there are others we needed to bring on and invest in so that we could ensure success. You're never going to do it all by yourself.

It has become profitable for all of you in the end. Is it strange suddenly being atop of an organization that's allowed you to be so financially comfortable?

Yeah. In the beginning, you have to remember we had no money. I sold my house and put my profits into the business. My sister took out credit cards, and my mom and dad cashed in the tiny bit they have in their 401k. And that was just to get our first orders that no one wanted, by the way. So when we went for three years when the company started without making a penny, every cent we had right back into the company.

[Success] is definitely a blessing, and none of us take it for granted in any way. It's also that payoff that entrepreneurs start to see once they have an opportunity to become successful. I mean, in the beginning, it wasn't like banks were clamoring to talk to us. We had collateral that happened to be an elf doll and a book [Laughs] We had to fight back against the idea that we were going to be a flash in the pan. We really wanted people to see us as evergreen, not a one-hit-wonder, but more of a Rudolph or a Grinch or a frosty or even Santa himself. And so it's taken a very long time to get the public to integrate us into Christmas in that way. Again, it's, it's been a struggle, but with hose financial rewards, you're also expected to give back. Each of us individually is very passionate about various charitable organizations and philanthropies, and I think that that's a key way to continue building goodwill.

You mentioned how the elves have become synonymous with contemporary Christmas traditions. Bottom line aside, it must feel surreal?

Yeah, it does. Where it really hits me is when I have people in my life who will be like, "You guys changed Christmas. You made it so much better for my family." There's no amount of money or success that's going to make up for having your own family tradition mean the same thing to millions of families that it meant to you growing up. That's just something you can't even explain.

Related: Mensch on a Bench: How This Toy Went from Kickstarter to 'Shark Tank' in Two Years

Is there something that's been an extension of the elves and Lumistella that didn't meet your standards? And moving forward, how do distinguish between taking advantage of a ripe market and oversaturating it?

OK, so those are really two very good solid questions. First, I'm going to go with the general challenges. I think the important thing to remember is you have to keep eyes on your product, right? I myself travel extensively when it's not a pandemic-level shutdown to ensure that the products and experiences that we're offering to families are top-notch. As we realized what we wanted to do, it really became more about omnichannel experiences. We've got bigger, stronger retail partnerships than ever before. We have stronger brand partnerships. For instance, with Kellogg's, we have our own cereal, which has been a dream of mine from the very beginning. It's continuing to put out entertainment that families want to sit down and watch and it's safe for them to do so. And I think you're going to see some additional partnerships from us in the future that are going to be maybe a little bit of a nod to some of the parents and the kids who've grown up with us and aged into what that's like for them.

So for the record, there's no specific example of something you wished would have come out differently?

Obviously, there are plenty of those. My own viewpoint colors the answer there a little bit, because to me, the obstacle becomes the way. If you let those things be something that is your monumental falling point, I think that hurts you. I would say it would have been nice to realize earlier how important it is to hire for your culture, because disruptors, while they can have a place that's really important, if they're not on board with your culture and your direction, they just start tearing the company apart. That's probably one of the biggest lessons that we've learned, is that you need people who are on board with your strategic direction and are a cultural fit because otherwise, you are not setting your company up or your people up for success.

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