Digital transformation isn’t easy for any brand, but for Pandora, with its 40 years of history and more than 6,400 points of sale across 100 countries, that effort is particularly complex.
Best known for its charm jewelry, the “affordable luxury” brand sells more than 100 million pieces every year, making it the largest jewelry brand in the world by volume. Globally, 80% of women are familiar with the brand and 30% of them own a Pandora item, so the stakes for the brand’s digital transformation are high.
“We’re a fully integrated organization, so we have our crafting facilities in Thailand, our distribution, our sales — we don’t quite have our own silver mine, but we handle everything from the raw material to the bracelet, and that means that every piece [of this digital transformation] needs to hang together,” explained Susan Van Dijk, SVP of Global Business Services at Pandora in an interview with Retail TouchPoints. “We need to make sure that the rollout, and what we roll out when, is all very coordinated, otherwise one bit will fail and then the whole chain breaks.”
The ultimate goal is to deliver personalized, omnichannel experiences to customers in all of Pandora’s 100 markets. To do that will take a years-long effort, already underway, to break down data silos and transform the company’s global operations.
“As an organization, we’ve grown through the wholesale side,” said Van Dijk. “Now we have a lot more owned-and-operated stores, and when you build a system to target mostly wholesale, that’s a whole different level of transactions than if you have your own stores. So getting to a place where we have a system that caters to a broader way of doing business, including our own stores and also online, is the key.”
Central to this effort will be transitioning to SAP’s Enterprise Resource Planning (ERP) system, an endeavor that won’t be completed until 2026. The ERP system that Pandora is currently using is being phased out, necessitating a shift, but Van Dijk hopes that by establishing a new “lean digital core” with SAP, the company can not only improve the omnichannel experience for its customers but also streamline back-office operations.
Turning Customers into Brand Ambassadors
After more than 30 years operating in brick-and-mortar, Pandora began to debut online in markets around the world in 2014. Now, ecommerce has grown to capture 21% of the retailer’s global revenue, with stores still accounting for the majority (51%) while wholesale and third-party sales make up the difference (28%). In 2022, Pandora banked 600 million visits across its online channels and stores.
“Through the pandemic in particular, online has become a really important and growing part of the organization,” said Van Dijk. “The store side of things is still important because it’s a product that people want to interact with. They want to see [the jewelry] and try it on, so recreating that experience online is one of the things that we’re trying to get to so that we can give our consumers that true omnichannel experience.”
The key, according to Van Dijk, is having “a lean operation behind the scenes that will allow us to provide the right information to our consumers,” in particular when it comes to inventory. “The data flows are so important in making sure we have the right inventory information, so that what the consumer sees online is actually available in the store for things like click-and-collect. With the manual interventions that are required in a lot of these older systems, there is a chance that there are mistakes, and the product may not be there, which is a horrible consumer experience.”
Pandora, needless to say, is opposed to horrible consumer experiences. “Some talk about ‘taking away the pain of shopping,’ but at Pandora we want to celebrate shopping and make it a personal experience where we — due to SAP technology and our other digital tools — understand you, surprise you and delight you,” said David Walmsley, Chief Digital and Technology Officer at Pandora in a statement. “We are in the business of selling memories, so for Pandora, combining store and technology is where the magic happens. If we do this right, we are not only creating convenience for our customers, we are creating brand ambassadors.”
Improving EX (the Employee Experience)
Beyond offering a better experience to customers, Van Dijk also is looking to the SAP transition to improve the experience for Pandora employees, from the back office to frontline associates. “Right now I have teams who sit up until 12 o’clock at night to wait for the system to churn things through, so this will be a much better experience for them, but also in the stores as well,” she said. “As an example, with a refund, [store associates] can process that in the POS system, but then they have to send an email to someone to also process it in another system because we can’t make those integrations anymore. That just takes a lot of time away from our colleagues in-store, and it’s not what they signed up for. This will enable them to focus more on what they like doing, which is selling.”
By streamlining the company’s data with the help of SAP’s ERP system, Pandora expects to be able to increase transparency and efficiency across the entire organization, as well as better utilize the data they have to “do the analysis and see how we use that to grow further,” Van Dijk said.
The full SAP implementation will not be completed until 2026 because of the sheer size of the effort — across the 100 countries where Pandora operates, they must not only change the technology they are using but also the way they work.
“We are moving away from a very highly customized instance of ERP to a much more ‘out of the box’ solution,” explained Van Dijk. “That means that we need to really look at the design phase, which we’re in right now, to understand what is actually in that ‘box’ and then say, ‘Okay, how does that help us standardize, and what needs to change in the way we operate to make sure we enable the system in the right way? If it were just about the technology, I’m not saying it would be easy, but it would be easier. This is about a total transformation.”
For her part Van Dijk hopes no one outside the company ever notices all the work that is going on behind the scenes: “These kinds of implementations, the less you hear about them, the better,” she said.
She does, however, hope that customers will notice that this 40-year-old brand is continuing to evolve as they do: “This is also the way for us to make sure that we can respond to consumer needs and how the consumer wants to interact with us,” Van Dijk said. “If you have this vision to give a voice to people’s loves, you need to make sure that the products and experience that you design behind that respond to customer needs and stay relevant.”