When thinking about companies that have used digital technology to “win” during the pandemic, there are several different cases to consider. The case of tech companies can be looked at in two ways: You have the tech companies that experienced success by virtue of more people using their existing services, and there are other tech companies who spotted an opportunity during the pandemic, and managed to launch a new product.
I think it is useful to look at a non-tech company because their business models are not as reliant on having a dominant online presence, and thus provide an interesting case study. It is likely that any non-tech “pandemic winner” used digital technology in a very effective way to end up where they have now. One such example is the Danish jewelry retailer Pandora.
Pandora became one of the biggest jewelry retailer brands in the world, thanks in part to their rapid growth throughout much of the 2010s. By 2016, sales were $3 billion, and out of the 2,700 stores, Pandora owned 1,400 of them. However, their growth slowed and sales even began to decline 4% in 2019. The management team managed to get ahead of this decline and in 2018 they introduced a two-year transformation plan. Their plan came down to hugely reducing costs, digitizing the brand experience, and building a multi channel experience. As with all of retail, the pandemic was very damaging to Pandora and it forced the company to accelerate its transformation. Management committed itself to their plan (and perhaps sticking to a transformation plan is the best thing a company can do during a pandemic) the pandemic was seen as an opportunity to spur future performance and the company made even more effort into expanding its digital footprint.
Use of digital technology and value creation
Pandora opened a digital unit in Copenhagen and they employed around 100 software engineers. Their broader goal was to boost digital presence and speed up the transition to e-commerce.
New digital products that were introduced by Pandora not only facilitated shopping experience, but it also considered the effects of the pandemic. For example, they introduced a video chat so that socially distanced customers could chat online with staff members and receive advice; virtual queueing was introduced so that customers didn’t have to wait outside, when stores were reopen, and could scan a QR code and get a specific time slot. Other new digital features included virtual try-on simulation, remote shopping assistant, and new distribution channels that allowed customers to buy products online and collect (or return them) at physical stores. The remote shopping assistant played a vital role in their transformation and is perhaps the underlying reason that made them a winner during the pandemic: Pandora wanted to recreate their traditional customer experience online for which it needed to keep its sales staff. However, the sales staff were working from home and so the remote shopping assistants were key in helping Pandora’s staff assist customers during their online shopping.
This increased digital presence also benefited Pandora in other business areas. They were able to have a more effective marketing strategy and Pandora increased their media spend and launched personalized email campaigns.
The focus on growing e-commerce delivered results very quickly. In 2020, the online sales were higher than in-store sales for the first time in company’s history. Other non-digital parts of the transformation were also a huge success. Below is the stock price of Pandora over the course of the pandemic:
Pandora is continuing to invest in digital areas such as data science and advanced analytics.
To summarize, I believe Pandora was a “winner” during the pandemic because they were able to go from having negligible online presence to a significant one during one of the most turbulent times in recent history. The timeline for their transformation was strongly disrupted by the pandemic and they were forced to hugely accelerate this transformation without having any experience with in-house engineering. Pandora’s digital products presented their own primary value, but they also had secondary benefits such as support of the sales staff and had pandemic-conscious features. These digital implementations will allow Pandora to increase sales and convert more of their website visitors.