In Focus: Jewelry Market – Universal trends and local challenges

Image : Michał Zaranek

Some brands are welcomed with open arms when they first come into Polish shopping centers, some have to fight their way in. PANDORA’s history in Poland was the latter case. Yet, despite the odds, the company has managed to grow enormously over the past decade and now its network includes approx. 400 points of sale in the CEE region alone. WBJ sat down with Dorota Pomacho-Pątkiewicz, Managing Director of Pandora for the CEE region, to talk about the brand’s early days in the country, global jewelry trends and the challenges that come with overseeing over 20 markets

Interview by Beata Socha

WBJ: PANDORA is a multinational company. You manage 24 countries from your Warsaw office, five own-operated and 19 distributors’ markets. What are the biggest challenges you face in your everyday work?

Dorota Pomacho-Pątkiewicz: People are the greatest challenge. We coordinate five own-operated markets which have our own companies, distribution and sales networks as well as 19 other countries in the CEE region. Cultural differences are extremely important to consider when you deal with that many cultures. For instance, Romania is part of CEE but it has a more southern culture, which is different to other markets. Two years ago we organized a winter party, to which we invited all the store managers from our markets. One of the most talked about things at the party was the fact that the place cards featuring people’s names followed the name order of each country, for example, Hungarians had the name order popular in Hungary (first family name, then given name, unlike in other CEE countries). These are small things, but showing appreciation of their culture matters to people.

Do tastes in jewelry differ from one market to another?

We are a global company and we want clients all over the world to recognize our stores as soon as they step in. Except for small cultural differences, such as e.g. Chinese New Year, 95 percent of our collections are the same across the world. The list of bestsellers is also very similar in each market, regardless of whether it is the UK, France or the Czech Republic. Of course, there are some local differences, for instance, in the Czech Republic the second most popular charm is one featuring the Charles Bridge, mainly due to tourism. Other than that, we observe similar trends everywhere.

Let’s take the Turkish market. I was surprised how much the country follows jewelry fashion trends, despite having a very strong tradition in jewelry making (e.g. women are still gifted gold for their wedding there). A while back, we did a product placement on a very popular TV show in Turkey. For the next two weeks we practically only sold the bracelets that were featured in that show.

How do you position your products?

We offer affordable luxury. We make stylish, feminine and contemporary jewelry that is worn every day, inspiring women to embrace their individuality and express their personal style. Our jewelry combines traditional craftsmanship with modern technology – we have our own modern factories but each single pieces is hand-finished, all stones are set manually. We offer the same production process as luxury jewelry, but at an affordable price. Naturally, PANDORA’s positioning is different in Poland than in other markets, depending on the purchasing power. Product lifecycles are different in Western countries, where jewelry is purchased much more frequently: women there buy jewelry to suit a dress whenever they purchase a new one. In Poland, jewelry is still not an everyday purchase.

But the more we earn, the more we can afford and the more eager we are to express ourselves, our moods – also through the jewelry we choose.

Are you clients exclusively female?

We produce jewelry for women, but men often buy our jewelry as gifts for their loved ones. Of course, some gifts are later exchanged for other items, but we also have online wish lists, where you can create your own set. This is a great help to both men and women. Often, a man comes into the store with a catalogue and the desired pieces circled in it.

How is the e-commerce channel developing?

E-commerce is growing very rapidly, at a pace of several hundred percent annually. It currently accounts for some 20 percent of our revenue in Poland. Our clients know what they’re buying, as they usually already have several PANDORA pieces in their collection, and online shopping makes their lives much easier.

How often do you introduce new products?

The frequency is something that distinguishes us on the market. We introduce new collections (so-called drops) 7-10 times a year: for every season, as well as all major holidays: Valentine’s Day, Mother’s Day, Christmas.

Is it difficult to coordinate so many drops?

We are the only jewelry producer of that size with our own production facilities. We have a sizable design and product department, part of which is located in Copenhagen and part in Milan. Our chief designers are Italians. We stay on top of all major trends in fashion. The designs are sent to the production facility, where they are processed and prepared for manufacturing and then we produce the jewelry. It is then distributed through our own Distribution Centers to our stores. This way we maintain full control over the entire production and distribution process.

PANDORA is a Danish company. Does the Scandinavian management style have any bearing on how you run the company here?

Indeed, we have Scandinavian roots and we take advantage of the corporate culture. When we entered Poland, few people believed the brand would succeed here. It was very hard to get into shopping malls at first. But our people were very passionate about their job, even if some of them lacked retail experience. We had a lot of leeway from the very beginning on how to grow the business. And we’ve managed to create a very big market here. We would never have accomplished that if we had been micromanaged. We are proud of what we’ve created, and we will continue with our development.

 

I believe that we also offer extraordinary benefits to our employees and maintain a warm and very friendly atmosphere within the entire organization. We enjoy informal ways of working in our everyday life. We create a wonderful team, full of passion and energy, capable of coping with any challenges.

You say you found it difficult at the beginning to enter shopping centers. How did you manage to get a foothold?

We had to sublease our first store from another retailer. When I was renewing one of our first lease agreements after five years, the center’s managers told me that no one really believed we would last a year.

And a foothold wasn’t a huge problem – PANDORA is a well known brand all over the world and Polish customers are very open to new products. Very quickly we have won their hearts. Now we have a lot of loyal customers and new ones are still coming.

How quickly has PANDORA grown in Poland over the past 10 years?

Very quickly. There were times that each month we would open 4-5 new stores in Poland alone, and several dozen in the entire CEE. The growth has tapered off now. We don’t have that much more room to grow. We already have 50 concept stores in basically all Polish cities with population of 100,000 and above. We are still testing and entering new locations. Altogether we oversee approx. 400 points of sale across the Eastern Europe region. I have no way of visiting all of our 24 markets even once a year.

Recently, PANDORA leased 3,190 sqm in Warsaw’s Graffit building in Mokotów. Was it because you have outgrown your current office?

Yes, it was. PANDORA has two companies in Poland: our core business office with 80 people and the Shared Service Center with 150 employees, who provide services for the entire EMEA region. Additionally, we employ about 300 people working in our stores.

“Customer experience is very important: our clients have the same experience in our stores wherever they are located.” 

Where we are now, we have access to the airport and when we had a warehouse in Warsaw it was a big advantage. Now, the products are shipped from one of our Distribution Centers in Hamburg so logistics is not an issue, and we would like to focus and appreciate the needs and comfort of our employees. We want to provide them with better facilities, an easier commute and office that is tailored to our current needs. The new office on ul. Domaniewska is only eight minutes from the subway station on foot wearing high heels. We’ve checked that.

Do you have a lot of competition from other brands in Poland?

The Polish market is very fragmented. Aside from major brands, there is a lot of craft jewelry. We are definitely a major global brand here. PANDORA is the most widely recognized jewelry brand in the world, and the second largest one.

Last year PANDORA took over 13 stores in Poland. What are your plans for the next few years?

We are now in the process of moving away from multi-brand stores and non-branded sales. Our stores, both our own and franchise outlets, are all concept stores, where the way we present the product is the same all over the world, including our own furniture. Customer experience is very important: our clients should receive the same shopping experience in our stores wherever they are located.

Our five-year strategy focuses on increasing the number of own operated stores. That is why we are taking over franchise stores. Last year, we acquired 13 such stores in Poland, we are in the process of taking over more across the region. Globally we are also acquiring distributors, last year we took over, among others, Spain, Belgium and South Africa.

The issue of certificates of origin is raised fairly often in the jewelry market. How do you approach that?

Corporate Social Responsibility (CSR) is extremely important to us. We offer resource origin certificates, we are certified by the Responsible Jewellery Council (RJC). In a market which is price sensitive and does not satisfy everyday basic needs, consumer education plays a vital role. Studies are clear: most of us declare that we are willing to pay more for products produced in a sustainable way, but declarations are one thing and the actual purchasing decision is another. It is changing, but we still have a long way to go as consumers.

Furthermore, PANDORA employees recycle, reuse and repurpose 100 percent of waste products from our jewelry manufacturing process. As much as 97 percent of silver and 74 percent of gold grains used to produce our jewelry comes from recycled sources.

We also make sure our business ethics as an employer are above any reproach. We produce our jewelry in Thailand, in our own, fully controlled factories, and we have repeatedly received awards and recognition from the Thai government as a company that continues to create new workplaces and new opportunities each year. We have had a long-term relationship with the country and we are enjoying the benefits of our commitment. Once, we organized recruitment without even placing an ad.

We put up a note on the factory door and the news of the recruitment spread solely by word-of-mouth through our employees. We had thousands of people come to the recruitment event that weekend.

We employ approximately 13,200 people in our three production facilities in Thailand and we are considered one of the best employers in Thailand. Our workers have their own TV channel, radio station, talent shows, transport to and from the facility, paid lunch etc. Wages are also above average. We are seen as a very desirable employer and we want to continue to be one.

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