Pandora is the world’s largest jewelry company, selling three items of jewelry roughly every second worldwide, every day of the year. It had revenues of more than DKK 23.4 billion ($3.5 billion) in 2021 and operates in more than 100 markets. It employs around 27,000 employees globally and sells through some 7,500 points of sale, including its own shops and franchise retail units.
But like every organization at the top of its industry, Pandora has to work for that success, and in recent years the company has gone through an impressive turnaround.
Pandora was founded as a small jewelry shop in Copenhagen, Denmark in 1982 by goldsmiths Per Enevoldsen and his wife Winnie. In 2010, Pandora listed its shares on the Copenhagen Stock Exchange and continued to experience strong growth, based on a model of onshore design, offshore manufacturing, and distribution mostly through third-party agents, supplemented with Pandora shops and presences in department stores. Between 2013 and 2017, Pandora grew in double digits every year, with annual growth of more than 32% during 2013 through 2015. Annual revenue growth peaked in 2015 at an astounding 40%.
But after the middle of the decade, growth started to decelerate. What could be done?
"We did a lot of analysis when we saw growth starting to decelerate and when our like-for-like sales started to decline," says Jesper Damsgaard, SVP and Global Go-To-Market Transformation Officer at Pandora. "From a marketing perspective, the main thing that emerged was that the brand was just not as relevant as it used to be—it was tired."
Pandora's approach to refreshing the brand was to relaunch it with a new purpose, a new visual identity, and a new campaign platform across all of Pandora's touch points. Allied to this was the need for greater personalization and deeper knowledge of the customer base. Underlying this was the need for a major refresh of the technology infrastructure, and for an injection of agility and fluidity within the organization.
"Pandora had been very late to the game in all things ecommerce and had a very fragmented ecommerce presence across the world by 2018," says David Walmsley, Chief Digital & Technology Officer at Pandora, who joined the company in April 2019 to help drive the turnaround. "The technology behind our ecommerce was old and fragmented. We had no omnichannel presence, and we had no in-house digital, engineering, and data capabilities—we were reliant on third parties not just for the development and support of our technology, but for maintaining all our systems and for our customer services. Our technology was run at arm's length and was like a black box."
Pandora had little or no visibility into its logistics and its customer service, which were run by outsourcers who shared little data with the jewelry maker. It collected little data about its customers and its traditional agent-based model meant that it did not have control of all its own ecommerce websites—in some territories, it was not even the merchant of record.
These operational and technological weaknesses meant that Pandora found it harder to find, understand, or communicate with its customers, and therefore to keep them happy. This was particularly so when something went wrong and customers experienced delays and confusion getting information from Pandora about, for example, the progress of their order. Pandora found it hard to operate in a genuinely omnichannel manner, so that newly popular consumer shopping models such as BORIS (buy online, return in-store) were hard to introduce. It needed to become a more vertically integrated retailer, gaining more control over its end-to-end supply chain and interacting more directly with customers.
Pandora needed a transformation program that would allow it to transform not just its brand but also the way it interacted with prospective and existing customers across channels. "We needed to turbo-charge ecommerce, drive omnichannel, and put in place the in-house IT capabilities we needed and drive a more holistic customer experience," says Walmsley. That program was Programme NOW. From a technology and operations perspective, it had four main pillars:
Pandora chose several key technology and transformation partners, including Salesforce for customer-facing software, IBM Sterling for order management software, and Teleperformance for customer care services. For digital business consulting, Walmsley chose Publicis Sapient as a key global partner. Walmsley had previously worked with Publicis Sapient over several years and had gotten to know and trust them well in his previous roles.
"One of the things I really like about [Publicis] Sapient is that they will challenge us in terms of speed," Walmsley says. "They have tremendous agility and global reach, with an ability to bring specialists to bear at relatively short notice. They are fluid and creative in how they work with us, not just in areas like putting in new systems, but in the way they integrate these with our existing systems. That’s something that is really important."
Programme NOW had four key pillars, each one of which addressed a critical pain point and aimed to position Pandora for sustainable and profitable growth.
The jewelry industry in general is still very traditional; online sales are lower compared to the fashion industry. When Pandora launched Programme NOW in 2019, which was to completely change the way Pandora operates, one of the focus areas was to boost the digital journey.
“Accelerating our digital transformation was and is key for Pandora. Even before the pandemic hit, we decided that we needed to do something now if we want to gain control of the digital customer experience and grow our business. So, I together with David Walmsley and Ricky Wilson proposed to set up a Digital Hub in Copenhagen to hire in digital and data talent from around the world,” says Jim Cruickshank, VP of Digital Development and Retail Technology. “Saying yes to that was a big step forward for Pandora. In only 8 months we hired over 100 new colleagues. The results we delivered in those 8 months are outstanding and something we are very proud of.”
One key success factor for Programme NOW was how marketing, commercial, and technology/digital teams worked closely together. “We used to have three organizations—an IT department, a digital department, and a marketing department—and that triangle between marketing and digital was not working very well in 2018,” Damsgaard says. Teams were siloed and processes quite slow. Through 2019 and into 2020, Pandora drove new ways of working between marketing and digital, for example by establishing teams with representatives from across the company.
“Bringing people together from the different functions meant that as a business we could launch new initiatives on a faster timescale than we were used to—that was one of the big bets that we made as a company,” Walmsley says.
Just as the Digital Hub opened, the world went into a global lockdown, and many Pandora stores had to be closed. This forced a big shift to digital media and reduced in-person engagement.
Pandora’s first priority was to ensure a safe environment for employees and customers. With a people-first mindset, Pandora kept all their store staff employees and continued to pay their full salary during store closures.
As with many companies, Pandora had to start ideating and innovating in circumstances that it had never experienced before. “As the world’s largest jewelry brand we want to be where our customers are, whether it is online or in a physical store. We knew that by making significant investments in our technological capabilities, we would enable the direct and meaningful connections with our customers—and we wanted to make it happen despite the pandemic,” says Cruickshank. “So we decided to go live with digital solutions that would launch just before our peak sales season—we called them ‘New ways of shopping with Pandora.’”
As the pandemic raged, Pandora created a cross-functional team to kick-start a project that would bring Pandora’s game to the next level and unlock the potential of digital within retail, in time for the 2020 holiday season. Virtual queuing, in-store appointment booking, click & collect, find in store, store locators, “endless aisle,” faster checkouts, virtual try-on, and remote shopping assistants—these digital solutions were developed by an accelerated agile process with customer research and testing at its heart.
“It was all a matter of teamwork—our colleagues did an amazing job to get from idea to global rollout in just 6 months. This whole initiative started with a team collecting insights from desktop research and qualitative interviews with customers and store managers,” says Cruickshank. The team generated 141 ideas and filtered them down to 11 solutions by rapidly creating prototypes and testing iteratively with customers.
Publicis Sapient was part of this Pandora-led initiative, providing support along the way wherever needed: “It was amazing to partner with Pandora on such a great journey and being part of this team at the Digital Hub. We are happy to see that our guidance and our help contributed to this success,” says Andy Halliwell, Global Client Partner at Publicis Sapient.
It took some courage to continue investing during the early days of the pandemic. “This digital investment happened in what became a global pandemic, and it was brave of us as a company that we continued to invest in this,” says Damsgaard. “When the pandemic hit, it was uncertain how it would affect us. But Pandora’s leadership team made the decision that the future would be more digital, not less digital, and that we should accelerate our journey. So we continued to invest—and that turned out to be an excellent decision.”
Pandora needed to in-source and consolidate its customer-facing ecommerce websites and fully own its relationship with consumers, not least by becoming the merchant of record for its digital sales worldwide. It decided to standardize on Salesforce Commerce Cloud as its global platform for ecommerce. The aim was to drive a codebase, functionality, and storefront experience across all its territories around the world.
That means having to constantly trade off the benefits of having a consistent global shopping experience with the challenge of responding to local nuances and needs, as consumer behaviors and expectations can vary significantly between regions. Often, some regions—notably Asia Pacific, which has a huge diversity of territories—require “flexibility-patterns” that allow the global platform to accommodate local requirements.
The third pillar was the transformation of Pandora’s order-management and logistics systems, so that the company got visibility into—and control over—the way it dealt with customers’ orders.
Pandora implemented IBM Sterling Commerce (IBM OMoC) and IBM Call Centre applications to support the process of taking order-management operations back in-house. The company enabled Ship to Home (STH) via Sterling Order Management, and implemented IBM Sterling Call Centre (COM) to support the call centers run by Teleperformance. This was critical to manage customers’ expectations better, and to ensure that the right items arrived in the right places at the right times.
It would also have more directly commercial upsides: better visibility over stock would give Pandora a single view of inventory, allowing it to sell and deliver from anywhere, so stock wasn’t sitting idle in locations with low demand. A robust omnichannel supply chain would also enable new ways of servicing customers—click and collect, curbside, BORIS, delivery from stores—that were about to become more important when the pandemic struck.
The end result included the enablement of new omni-channel initiatives such as Click & Collect and store-based fulfilment, better customer service tools for answering delivery-related questions, improved customer experience on order refunds, and better inventory visibility to allow more efficient selling across channels and fewer order cancellations.
In late 2018, Pandora had a severe lack of automation in the way customers were managed, which meant customer service queries were heavily manual. Different regions each had their own legacy order-management systems and customer services processes. There was a need to provide better inventory visibility, better customer service, and standardize the omni-channel experience across all regions.
Part of the solution was to implement Salesforce Service Cloud, which helped consolidate customer data, queries, and history into one place. With the help of Publicis Sapient, Pandora also implemented automated call handling and installed AI-driven service bots to take over a large number of queries, along with new social media functionality.
"We went from a world where all of our service management was outsourced to a third party on a complete black box basis—we didn't even know how many calls we were receiving every day—to transforming our customer experience using Salesforce Service Cloud. That implementation has been one of the big success stories in our business transformation," says Walmsley.
Programme NOW was already well under way when the world began to get alarming reports in Q1 2020 of a new type of highly contagious and deadly coronavirus.
As the Covid-19 pandemic rapidly worsened and country after country went into lockdowns, it became obvious that Pandora would have to innovate and alter its operating model—and indeed its business model—if it were to continue trading and be ready for the critical fourth quarter, when a huge percentage of its sales are traditionally generated. Pandora was facing a potential massive decline in its revenue—perhaps a third or more—unless it could quickly find new ways to engage with consumers and sell to them. It also had to ensure that the employees were supported during the pandemic.
Pandora had to temporarily close many of its stores while continuing to pay its staff; almost a third of stores (30%) had to be closed in Q1 and another 15% were closed in Q2. The pandemic had a huge impact on store traffic in China, a key target growth market for Pandora—footfall decreased around 70% in China year-on-year.
Pandora's digital team conducted 14 hours of customer and employee interviews—not easy in a newly socially-distanced world—and identified four opportunity areas: the sales process, customer safety, store capacity, and injecting human interaction into virtual selling in order to create a personalized "wow" experience.
This generated a backlog of 141 ideas which led to 11 solutions that were implemented across 12 markets in 6 months such as remote shopping assistants, virtual try-on at home, and virtual queuing and appointment booking to name a few.
Progress was rapid: within 4 weeks, Pandora's team had four pilots live with five vendors across three markets, and within six weeks A/B testing gave an initial benchmark for the potential commercial value of the digital solutions. Using data and feedback from the MVP pilots, Pandora built the final products, with help from Publicis Sapient, and these were operationalized and rolled out globally by Pandora between September and early November 2020—just in time for the critical gifting season in Q4.
Overall, Programme NOW helped Pandora not just to survive the pandemic—something that was by no means assured in early 2020—but to actively flourish despite Covid-19. Despite the pandemic, Pandora returned to growth in 2021 following the completion of Programme NOW and its share price more than tripled over the period.
Pandora's primary goal was obviously the safety of its workers and customers. But because it didn't stop putting the digital foundation basics in place despite the pandemic in 2020, the company was able to pivot quickly to effectively become an online pure-play by the middle of that year. "Globally, we were able not just to survive but actually to grow our business. The work we did in 2019 and into 2020 was critical to our ability not just to survive COVID but to thrive through that time commercially," says Walmsley.
Summarizing the achievement of Programme NOW, Pandora's 2021 Annual Report noted: "We now have a high-performing online business, our product portfolio is slimmer and more productive, we have increased the use of data and analyses across the business, and our organization is stronger, flatter and faster." The business results of Programme NOW included:
Programme NOW had started with a brand relaunch in August 2019. By the end of Q4 2019, the company was seeing positive results, with like-for-like sales growth up when compared to the first three quarters of 2019. This trend continued into early 2020 before the pandemic kicked in, with Pandora achieving like-for-like growth in January and February outside China.
During 2020, Pandora significantly reduced the number of promotions and lowered inventory levels, leading to a better pace and volume of promotions, better appropriate inventory levels, fewer products, less clutter, and less complexity. The results included cost savings but also experience-enhancing changes for customers such as better looking stores and better product availability.
Substantially as a result of Programme NOW, Pandora saw its share price increase by 135% during 2020, a year in which many enterprises saw their share prices decline. According to the company, total shareholder return exceeded both the Danish C25 and the STOXX 600 Personal & Household Goods indices.
Through Programme NOW, Pandora was able to turn what was a frustrating customer service experience for both customers and employees into a source of strength for the company. Critical experiences such as page load and the responsiveness to queries are up to three times faster today than they were in 2018.
Pandora went from enduring high levels of complaints on social media in 2018 to today's situation where it receives plaudits from its customers. Of course, things still occasionally go wrong, as they always will, but Pandora today gets praise rather than criticism from customers for how it handles customer service.
One significant benefit of implementing new platforms such as Salesforce Service Cloud and the insourcing of critical business capabilities was that Pandora became more data-rich and more consumer-centric as a result. "That has allowed us to very accurately measure what consumers like and don't like and then make decisions based on that rather than taking intuitive guesses," says Damsgaard.
"Overall, we became much more sophisticated in how we were measuring the impact of each of our different marketing activities. That allowed us to use evidence to put significantly more money behind the things that we could see were actually working. We have been able to take a much more rigorous and more scientific approach to how we go to market."
As a result of these efforts, Pandora was confident enough to increase its investment in marketing, both at the top of the funnel (to attract new, previously unknown customers using mass-market media such as television) and towards the bottom of the funnel (driving sales activation and repeat business among customers that Pandora already had a relationship with). "The only reason we could make that new investment was that we could show with a relatively high degree of certainty what the impact on the top line would be of various digital marketing initiatives," says Damsgaard.
Programme NOW was formally completed in 2021 and was judged a major success. But Pandora is not standing still and the next stage of its evolution will be driven by its growth strategy—Phoenix. Some of the goals of Phoenix include:
A major priority for Pandora will be to use technology, data, and design to drive improvements in experience within its physical stores. Pandora's digital and marketing teams are therefore working with the retail and commercial teams to drive new physical/digital linkages in terms of that experience. "Working on how we collect and use first-party data to build direct connections with consumers is a massive focus for us right now," says Walmsley.
Improving the in-store experience and linking the physical to the digital better is heavily connected to a key pillar of Project Phoenix: driving greater personalization. Pandora has multiple workstreams dedicated to better use of the company's customer data and analytics. The goal is to target consumers in a more personalized way at different touchpoints, and to better digitize the company's marketing to ensure that the right message is always delivered to the right customer at the right time so the experience of dealing with Pandora is personalized in ways that feel good for the customer.
Pandora now works with more than 500 dynamic customer segments in its consumer data, and has developed and scaled 18 use cases for predictive analytics.
With new technology platforms and better and more collaborative ways of working, Pandora has a stable foundation for revenue growth. Part of that will be driven by launching new offerings, some of which will be targeted to new and previously undiscovered or underserved groups of consumers.
For example, Pandora has recently launched Pandora Brilliance, its lab-grown diamond collection designed to offer hand-finished jewelry at an affordable price and with less environmental impact. This new proposition needed new marketing, distribution, and support models, something that would have been impossible to supply at speed just three years ago.
Looking into 2023 and beyond, Pandora has a strong platform that can act as the spur for sustainable and profitable growth. "We are all on a journey. We have achieved some great things in terms of digital commerce and experience. The next trick is to scale that across the whole tech and data landscape—that's what we're looking to achieve next," says Walmsley.
What should be the advice to enterprises thinking of embarking on a path as ambitious as the one trod by Pandora? Walmsley's first advice is simple: get yourself some strong coffee. Once you have coffee sorted, there are some other things to consider before you start the journey.
The first thing to look for in a strategic business partner is a strong commitment to the success of its client. Accompanying this should be a willingness to flex and change its approach as circumstances and client needs change—as they inevitably will do on any transformation program.
"Publicis Sapient brought us the ability to bring global expertise to bear on particular local issues, which was incredibly important. But they also brought us agility and the ability to move at pace and flex around our needs. I really liked their ability to flex creatively and not be tied slavishly back to a statement of work all the time—that was really key for us," says Walmsley. "Sometimes people will come along with a fixed notion of what it is that they think you need, and that's what they're going to sell you. We needed partners who would look for joint wins with us—this was about joint success."
The role of a strategic partner includes politely but assertively disagreeing with the client. Walmsley did not want yes-men working for him, but neither did he need highly opinionated people who thought they were always right. "What we found was that they will challenge us, but they will also listen intensively to us and do what it is we're trying to achieve. That balance is key to us," he says.
Siloes are the curse of large and complex organizations and one of the ways they proliferate is when the business solves a problem in isolation from the wider picture. It's important to look at an area like order-to-fulfill as one entire end-to-end process, however many partners or technology platforms are involved in delivering a package from the warehouse to the customer's doorstep. And it's important to look at the problem from a commercial and financial-incentive perspective, as well as a technology and business process perspective.
"Within your organization you will have different incentives. You'll have the ecommerce team, the retail team, the wholesale team, and you are trying to reconcile all that and find commonality in the architecture and the business model," Walmsley says. "If you don't get that right you end up with six different silos doing their own thing, with no idea what the holistic picture is. Getting that right is one of the biggest challenges you can go through as a business, and you have to take a completely end-to-end view."
With so much focus on technology, business processes, and financial incentives, it is easy to lose sight of the biggest resource a company has: its people. "You have to keep raising the bar every day in terms of your talent agenda," says Walmsley. "I want to continually bring in new people who are even smarter and even more customer centered than the great people we already have on the team. The question you ask yourself is: 'How can we make all of us more smart and customer centric and driven every day?'"
A happy and productive employee is someone who drives a great customer experience, which means someone who drives revenue growth. "In our digital strategy, we place colleague experience at the same level as customer experience. That's because we know that the one is the unlock for the other," says Walmsley.
This should be right across the board, not just in 'hot' areas like IT and digital marketing. A large part of the success of Programme NOW came from focusing on the "colleague experience" not just in customer-facing environments like stores, but in Pandora's back offices and distribution centers.
For example, Pandora asked employees in the supply chain to name their biggest pain points, and one huge issue that emerged was that scanners used by warehouse staff were freezing up and taking too long—up to 40 minutes—to reboot, with a big impact on productivity and staff morale. The technology issue was fixed and the result was a doubling of system availability in some distribution centers and a big rise in warehouse productivity.
Getting partners aligned with the business is a critical driver of success for transformation projects. But aligning objectives within the organization is important, too. "People in some organizations say that 'the business' wants X or wants Y' but although they are well-meaning, they are missing the point: we are an important part of 'the business' ourselves. It's not about them or us," says Walmsley. The number one objective of Pandora's merged digital and IT team is therefore simply to sell more jewelry—Walmsley's team is measured in part on how much impact it has on our sales—something that tends to concentrate the mind on driving business results.
One of the most important aspects of internal collaboration is the acceptance of a certain level of blurring of boundaries between teams. Does it matter whether a digital marketer is based in the marketing department or the Digital Hub, as long as they apply their talents to meeting the business objectives of the organization? It should not, but it might matter if the organization is siloed with competing P&Ls and objectives.
"People in organizations often like to have very clear roles and responsibilities associated with business functions and processes—'I do this, and you do that'—but in today's organization that's the wrong approach" says Damsgaard. "The overlap between these two areas is growing, and the two areas are blurring. We think that you should see this as an opportunity, rather than trying to protect and drive work for your own siloed area. And that's one reason why I work well with David."
Danish jewelry giant Pandora was already embarking on a major technology and business transformation—Programme NOW—when the pandemic hit. Thanks in part to transformation of technology and work practices that had been driven by Programme NOW during 2019, Pandora was able not just to prevent a catastrophic fall in revenues during 2020, but to emerge from the pandemic stronger and more ready for the future.
"Business transformation is a complex and difficult project to get right, particularly when the world is grappling with a pandemic," says Douglas Hayward. "To survive and flourish at a time of crisis, you need a strong technology foundation and modern ways of working to drive agility, collaboration, and proactivity. But most likely you also need strong external technology and consulting partners who on the one hand will support you with flexibility and empathy, and who on the other hand will politely but assertively challenge you to be at your best."
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