Pandora aims to charm Gen Z with fashion-forward collections
today Oct 3, 2019
In 2016 Pandora, the world’s largest jewellery maker, was on a high. It had announced annual revenue of DKK20.3bn (€2.7 bn), the shares had reached a peak at DKK1,000 (€134), and with 2,100 concept stores in 100 countries, its customisable silver charm bracelets could be spotted on the wrists of women on high streets worldwide.
But then cracks in the business model began to show. Annual revenue growth in local currencies slowed: from 24% that year, to 15%, then 3%. Executives blamed “a blurry brand experience,” a “bloated” and “repetitive” product assortment and a lack of innovation. Sales of the brand’s charms, its largest category by revenue, were waning. Finally, after subsequent cuts in the brand’s annual outlook in 2018 saw its stock plunge more than 20%, Pandora ousted its CEO Anders Colding Friis and several months later, launched a comprehensive transformation plan called Programme Now to cut costs by DKK1.2bn (€160m).
Currently, with a share price 73% lower than its 2016 peak, it’s clear that Pandora still has a good deal of ground to regain. It's begun by relaunching its visual brand identity (now an appealing, Glossier-style millennial pink), and its consumer experience, upping marketing spend and tapping a diverse roster of new ambassadors including Halima Aden and Millie Bobby Brown. In addition, it has committed to a global concept store redesign, and most importantly, an overhaul of the product. And this time around, the brand is looking to fashion to help it bounce back, as Pandora Chief Creative & Brand Officer Stephen Fairchild tells FashionNetwork.com.
“Fundamentally you need to have amazing product,” Fairchild says, immediately addressing what has been a weak point for the brand as it struggled to adapt to changing tastes. Since Pandora’s commercial reset under Programme Now, which saw the brand buy back underperforming products and cut promotions, the brand has been paring down its collections and closely analysing what shoppers actually want. “We’re focusing on less is more, especially on the charms,” Fairchild says, “and on consumer insights. We spent a lot of time on that.”
While the company has carefully crunched the data, Fairchild notes that it’s also a matter of behavioural trends, having seen the shift in person. “I saw there was this shift in jewellery, it was no longer about how it looked on your ear or on your finger, it actually became an accessory,” says Fairchild, whose background in luxury fashion includes stints at Valentino, Armani and Ralph Lauren. He spent “a lot” of time observing shoppers in destinations such as Harrods in London or Le Bon Marché in Paris, where he recognised that jewellery was not only becoming a significant element of personal expression, but also part of a full look. “Instead of using a little mirror and looking at how an earring looks on an ear -- I saw women literally going and looking in full length mirrors, accessorising it with their clothing. That to me was where I saw a huge shift,” he says.
Pandora’s first innovation was the O-carrier charm holder, a versatile circular karabiner that can be clipped onto belts and bags. “We felt it was very important to understand how the concept of jewellery is changing, and how we could bring the charm and bracelet concept not just to the wrist but to other areas,” explains Fairchild.
That concept has been extended with the Gen Z-friendly “Pandora Me”, a 55-piece collection of compact micro charms, single stud earrings, bracelets and a safety-pin brooch. The pieces are noticeably versatile: the charms are shown looped into shoelaces, dangling from links on chain bracelets and pinned on sneakers, bags and jackets.
The brand’s designs have undergone a fresh, casual makeover for Pandora Me, instituting a streetwear-inspired fashion feel and stepping away from chunky beaded bracelets – using contemporary and youthful motifs such as a rainbow-dotted Venus symbol, a tiny rounded cactus plant and glittery eyeball. The utilitarian chains and arrows feature a more masculine design – the result of a growing number of male customers?
“We don’t design men’s jewellery, but we’re seeing more and more men come to buy our charms and bracelets,” admits Fairchild, who has been with the brand since 2011. “[Producing more unisex jewellery] is something that we’re talking about a lot. A lot of companies are doing men’s jewellery; we’re really interested in unisex jewellery. And it’s something we’re really evaluating right now.”
“It’s just a question of 'how do we communicate that better', to be very honest with you,” he adds. “But we see it not just as an opportunity: it’s what’s happening already.”
So much the better for the brand if it has expanded its consumer base, as it aims to boost revenues by promoting the collectability of its charms; which remain its most significant product category, accounting for 53% of sales in 2018. The brand is bolstering their use across segments; adding them to necklaces and accessories; and lowering the price point: Pandora Me’s micro charms are priced from €5 to €79. “It’s about giving it an entry price point. It’s really, really affordable, which was very important for us, an entry point to attract a younger target consumer, Gen Z, so they can afford to collect these symbols,” Fairchild adds. The brand believes that a new emphasis on recycling will also appeal, underlining that it uses 88% recycled silver grains, 100% recycled gold grains and that 99.96% of its stones are man-made, at a lower environmental cost than mined ones.
The distribution of charms themselves has also posed a unique challenge. Though it’s no secret that the softening in bricks-and-mortar retail has been an ongoing headache in the industry at large, it appears even more pressing at Pandora, for whom revitalising the in-store experience across its 2,700-strong network will be decisive. “Buying Pandora charms is quite a chore,” Fairchild concedes frankly. “We were really trying to make it more instinctual.”
To make shopping for charms easier and more fun, Pandora has redesigned its in-store presentation, displaying them at Charm Bars, where customers can mix and match the pieces. The concept is being rolled out throughout the 2,700 stores, and is linked to the brand’s redesign of its collections in general. “I don’t just look at the design assortment from a design perspective, but from the perspective of how the customer will see it in the store,” Fairchild explains. It’s a strategy that has boosted cross-category sales: “[According to] the initial data that we’re getting, when [customers] see our collections they’re actually buying our collections, not just buying a piece, a ring or an earring, they’re looking at the whole thing and we have some women who are leaving with a ring, with a necklace, with an earring, and actually even with a charm and bracelet.”
The distribution overhaul has also included the introduction of a Treasury Table, showcasing Pandora’s other jewellery, and the store’s Hot Spot, an area spotlighting the brand’s campaign, initiatives and innovations. The company is scheduled to announce its next quarterly results on November 5, but in the meantime, Fairchild says these are performing “extremely well,” with a strong increase in its in-store “discovery and dwell-time,” Fairchild emphasises. “We’re really seeing in the initial data that people are staying in longer.”
But dialogue with the customer isn’t confined to the store. In an era where consumers are increasingly gravitating towards inclusive brands, Pandora too has joined the conversation on diversity.
“If you look at fashion there were always these ‘perfect, beautiful’ women,” Fairchild says critically. “In a lot of ways we understood that there was a large group of women around the world that people were not talking to.” That’s something that Pandora is now hoping to rectify, putting diversity at the heart of its relaunch. At the brand’s relaunch event in Los Angeles in August, the African-American response was particularly good, Fairchild says: “In Los Angeles we sensed that it was not, ‘look at us,’ but it was really people meeting and talking and conversing, about them and about Pandora. It was seeding the brand for its future.”
Pandora’s “new collective of women,” the ambassadors including Aden, Nathalie Emmanuel and Margaret Zhang, are also a part of the strategy to speak authentically to modern women. “Each one of them has a very clear story, such about sustainability, or for how Halima wears her headscarf,” Fairchild says. “They really have a voice.”
Pandora is clearly banking on personal connection as a driver for future success. But as demand for personalisation has soared, sending fashion and jewellery brands scrambling to create customisable options, how Pandora could have faltered in what should have been its moment remains somewhat puzzling. “Our range grew too big, too quickly,” says Fairchild. “From a marketing perspective… We were a little bit inconsistent.”
Still, Fairchild is confident that the brand’s roots will be a part of its evolution. “We were on this platform of personalisation and customisation prior to a lot of other brands. We’re trying to take that DNA we’ve always had and [make it relevant for] the society that we live in today. The world has changed immensely over the past 10 years. We live in a world of fast-consumption, and our jewellery is about longevity.”