Rethinking Your Digital Roadmap: David Walmsley, Pandora

I came in last year. The business was pretty immature from a digital perspective, which is kind of why they needed me and me to build a team. But we've been on a journey for the past 18 months, really turbocharging e-commerce but also kickstarting the omnichannel approach and the omnichannel programme. And timing is everything. Thank goodness we've got that mobilised and got that moving, because coming into 2020 we had a re-energised e-commerce business and re-energised performance in e-commerce. And with COVID hitting, it's not just riding the bucking bronco that is a pure-play global business suddenly overnight, but keeping the logistics piece, even customer services, moving. This massive increase in volume, which all of us as retailers are having to deal with in the e-commerce space. But I think the softer piece is then shifting the mindsets within the business. That part of the job that all chief digital officers have is helping their leadership team that they're a part of reorient their minds around omnichannel and the digital customer experience and all the touch points. And that piece has been turbocharged as well.

Last year we developed a plan to set centralised global digital developments in Copenhagen. We actually kicked off at the back end of last year a big drive to create what we're calling the Digital Hub in Copenhagen, which is a hundred headcount team consisting of engineers, product management, user experience, data scientists. So with that globalisation of digital and that really ramping up of in-house resource has been a central part of my strategy and remains a central part of our strategy. But alongside that we also reorganised around how we dealt and worked with the e-commerce teams in each of the countries. We have e-commerce running in 14 different countries. We reorganised how we are working, both from a people perspective but also from the tools we're putting in their hands. I'm putting in place a core operating model for e-commerce that everyone has a very similar looking week now in terms of what they're doing through the week to drive that e-commerce performance and the optimisation of the e-commerce performance in particular.

The reprioritisation of the operational focus, first of all, simply more capacity, you know, more DC, more customer service capacity working with our partners. In the middle of this we just launched an entire new global customer service platform because we're not sitting around wondering what to do. It's been a programme that's been running for a number of months, but that went live a couple of weeks ago and that for the first time gives us oversight and insight into all the customer service streams. So again, moving from this world where we're renting someone else's machine to owning our own machine has been a fundamental change in our operational approach. And that's been a long time coming and we just got to that in the last couple of weeks. In fact we launched the last part of it, the UK order management platform, just at the beginning of this week. So it's a very, very current kind of upgrading of our operational capability. I think one thing that a lot of people in my position sometimes struggle with is your commercial teams tend to underestimate because they want to overperform. That is anathema in our business right now. No one wins any prizes for beating a target because if they do it means we might not have the operational capacity to support it. So that mindset shift, that raw commerciality which is 'don't underpromise and overachieve', that's pretty fatal in this environment. And that's something we're continually coaching people on. Praising people for underachieving on their forecast. Hopefully just by a bit, but that's the real driver there. And the commercial performance on e-comm, and again people in chief digital roles or e-commerce roles that are watching this, we're all in a position where we're kind of riding a bucking bronco as I said at the start in terms of e-commerce performance. And it's great because you're looking at numbers thinking my goodness, this is suddenly a massive business. But we are in many ways. Our goal at the moment is simply to keep it running. And that means it's all about the operational side of things. So that's one piece in terms of reprioritisation. Yes, we've reprioritised around two things. One thing I'd call conversion bankers. There's lots of things, there are no bad ideas typically in terms of digital backlogs. They're all good ideas, they're all somehow going to generate sales, but there's complexity with some of them, there's question marks over actual commercial performance of a particular function and feature. We put in place a big testing programme so no feature goes live on Pandora.net now without it having been tested in at least one country via our A/B testing platform. So we've gone from a world of just ideation and 'let's get this stuff done' to a much more rigorous test, test and optimisation approach. So the conversion bankers is the first piece that we've just really streamlined down to a list of, you know, particularly stuff like optimisation of checkouts and optimisation of navigation and so on. So none of the kind of bells and whistles things. And the second piece is then the omnichannel programme, which started in the US last year and that's been heavily expedited. We've rolled out click and collect T-More, click and collect in China. We've got a couple of other omnichannel features going live with T-More: endless aisles, so if a store can't fulfil the order then we can now sell off T-More in the store off devices. And all of that programme is rolling out US, China and now into Europe now we've got the order management systems in place to support that. So that reprioritisation has been a critical part of this year because we have to support that queue for store performance. That's where Pandora lives. And then your last question, investments. Yes, I think there's certainly been a reprioritisation of investment. One of the things that is always front of mind for me is that the investments in digital, now that we're chasing this business, the cash investment in digital will continue to grow, but we have to do that in an efficient manner. And that's one thing that's always front of mind for me because particularly in these kind of challenged times, I think within any organisation people can look at the digital team and think, 'geez, they're getting all the money.' And it's not always the case when you get down to the actuality of it, but the perception can be there. So it's incumbent on me and my team to make the most efficient use of that money and be transparent in how we're driving the efficiency in that investment. So that's something that again we've doubled down a little in the last couple of months in terms of how we talk about our investment and frankly the cost savings within there. Working with our partners to really drive better commerciality in terms of the money we are investing. So I think that's really the focus at the moment rather than kind of raw money. Although I would say from an operational point of view the expansion of our operations has been a very straightforward conversation.

I hate the phrase 'new normal', but that shift in consumer want and need I think is critical. We have to respond to how our customers want to shop and then find the most efficient way, the best way to do that. But the starting point has to be how do our customers want to shop. And with Pandora, the experience that our customers have in store is a big part of the Pandora experience. Because when you're putting together one of our bracelets with some charms, you're thinking about buying a present, the expertise you can get in store and the advice and the comfort that you're buying the right combination of things. I think that's the real secret sauce in our business and that's something that from a digital perspective we have to find ways of supporting. We have to find ways of helping our customers research and browse and build their ideas online so they can then shorten their visit into the store. One of the things we found in the last few months, and we've been doing a lot of research in the background, on the omnichannel shopping experience, how people move between channels, and particularly that face-to-face confidence. For male gifters in particular, funnily enough, is this the right thing, does this look good, and that confidence to push the purchase across the line, I think is something that's always going to be part of our business. But that said, the share of business transacted through our e-commerce tills has increased through COVID and I don't expect it to go back to the pre-COVID level. And that's a change in terms of speeding up the economics in any consumer-facing business at the moment. Long-range plans and long-range models about channel shift, the models have always been in place, it's now a question of just basically changing some of the years across the bottom of some of these graphs.

I come back to the question about the country teams in each of our countries and the management team and the management ethic there. They've grown up as commercial arms in each country. Why do we have a Pandora presence in each country? Well, we have stores in each country so we need a management team to manage the whole plan-by-move-cell operating model in terms of the commercial arm. E-commerce grew out of that. Well, you now have a website, so here's a little team. But actually that integration and that omnichannel management mindset I think is the big shift that we'll see coming out of this. That's something we're doing a lot of work on. If you look at the top level of Pandora leadership, what will be their view of digital transformation going forward? I'm blessed with a boss who is intensely curious. He comes from an FMCG background and so it might not be sort of too of a familiarity with digital channels in terms of trading through digital channels and omnichannel, but he asks all the questions and he leads from the front in terms of encouraging the team to ask the questions as well. I think one of the things that really excites me individually is, and you know Grant, as chief digital officers in these businesses sometimes the chief exec can say digital is important to me and that's why I've hired him or her. And that's kind of okay, it gives people like us jobs, but it's not really great from the organisational point of view. In Pandora, under Alexander's leadership, he's very clear: it's everyone around the table. What is your digital agenda? My job with them is to help them uncover and unpack what their digital agenda is and support them and celebrate the things that their teams are already doing that look like digital, and really work with them on what each digital agenda should look like.

I think in this current phase with the pandemic, the day-to-day operational pieces may be exciting. I get a kick out of that and am energised by the operational challenges. Thankfully we'd actually built the team up by the time this had started to hit. Some really great experienced operators, a couple of guys that brought with them experience from previous places, and a really diverse cross-section of people from many parts of the world in fact that we've brought into the team. So thankfully we had the team built by this point. So that day-to-day operational piece I find very energising. But I think the journey I've been on and I remain on at the moment is moving from a world where, and I'll admit I've been doing this for a reasonably long time, from a world where me and my team were the only people doing this stuff and we were seen as like the weirdos in the corner slightly, to a space where everyone has a part of this now. And I think the personal challenge for me, which I keep front of mind all the time, is then empowering and celebrating the digital successes in other parts of the business. And I think, being really honest about it, sometimes thinking 'why are they doing that, that feels like our job' and that kind of anxiety that comes about who's doing what looked like my job. And actually I think the journey I've been on is relaxing around that stuff and celebrating and saying, well, how can I help.