Burger spoke with JCK about the brand’s new “Unique As We Are” campaign, its growing push into jewelry, and the fate of unbranded jewelers
Scott Burger, president of the Americas for Pandora, very generously took some time to talk with me at his brand’s beautiful booth during the JCK show in Las Vegas last week. Burger, a former grocery executive, spoke with JCK about the brand’s new “Unique As We Are” campaign, its growing push into jewelry, and just what will happen to independent jewelers that carry the line.
JCK: Can you tell me about Pandora’s new marketing campaign?
Scott Burger: We are launching a new global campaign, “Unique As We Are,” built on the success of [2015’s] “The Art of You.” A lot of the focus that came through in “The Art of You” you will see carried through in “Unique As We Are,” which really celebrates women and jewelry’s role in how they personalize themselves. We are excited about the floating locket concept launching later this year. It will be full 360, launched in every market around the world.
JCK: Will your advertising increase this year?
Burger: Our advertising will be up about 14 percent. We’ll continue to do the TV that has been so successful for us over the holiday season, but we’ll also move a lot into the digital and social space. It’s a different way for us to tell the story.
Another thing that you’ll see as you walk through the space is we are really trying to highlight the quality and craftsmanship in the pieces of jewelry. A lot of people don’t recognize this, but we made 100 million units last year out of our factories. Each piece is touched by 40 sets of hands. It’s an important part of our story that doesn’t always get told. We are trying to really bring that to life in the space this year.
JCK: Will you be mostly promoting rings this year?
Burger: Rings have been a great growth story for us for the last couple of years now. We see that continuing. We also see there is a bit of a halo effect so the earring category, as well as the necklace category, has really sort of popped without us putting a lot of emphasis behind it. We are going to focus on the earring category during the back half of this year. It represents 18 percent of the industry. It represents the same total as charms and bracelets combined. We think it is a great opportunity.
JCK: Charms became popular because they were customizable. Are you moving away from customization with rings and other products that are harder to customize?
Burger: What’s great about “Unique as We Are” is it steps away from customizable and speaks to personalization. Customizing a bracelet is a way that women have enjoyed Pandora for a long time. They express themselves very well through their bracelets. We think earrings and rings also give them a way to do that, whether it’s to accent an evening gown or something that their child gave to them—whatever makes it a special piece for them.
JCK: Switching to the issues with retailers, many of your independent jeweler accounts are “white” and “silver,” what you call unbranded accounts. You have dropped a lot of those accounts in recent years. What is their future?
Burger: What we have said, and continue to say, is we believe an important part of the Pandora growth story over the last decade has been the growing importance of brands in jewelry. We think we are well-positioned there, and we think that concept has been an important part of the growth over the last few years. We are very proud of the fact that, if you look at our gold [level accounts] or shop-in-shops and even our franchisees, most of them started out as white partners at some point in time. We have a huge amount of people who have been on this journey with us—some who have decided it’s not what they want to do. At some point we make a decision where we have a relationship and we seem to be going in different directions, it’s time to part ways.
JCK: Do you want all your stores to be at least gold?
Burger: We think everyone should be gold or shop-in-shops. It is very hard to showcase a full assortment of jewelry in 24 linear feet of case.
JCK: How many white and silver dealers do you have left?
Burger: I don’t have that exact number on the top of my head. It’s probably close to 800.
JCK: Do you expect to phase all of them out?
Burger: I hope a lot of them become gold or shop-in-shops. We believe in this concept. It has been wildly successful for us. We know from the consumer research we do, consumers want to shop in a branded setting.
A lot of the multi-branded jewelers that I talk to who have opened shop-in-shops come up to me and say, “Pandora has changed our lives.” That is a humbling thing to hear. We are proud of that. We believe that stores that are willing to make the necessary investments and see what is in the best interest of their business and ours, we have a place for them.
JCK: If you eliminate the white and silver dealers, is there a danger that you are going to take away business from retailers with good business and good followings for Pandora?
Burger: What we’ve seen is, as people have made the decision to go into branded classes, their business has grown exponentially versus those that don’t. Conversely, the ones that don’t, the white and silver [level accounts], have seen their business decline with us because consumers are increasingly finding branded spaces to shop. What we have seen is, over time, that percent of the business has become less and less. I think that has helped inform the decision.
JCK: The future is difficult to predict, but when you look at 2020, where do you see the independent retail channel for Pandora?
Burger: Obviously, as you said, it is hard to predict…but I think their role will be similar to what it is today. We believe that this brand movement will continue. We will continue to evolve what that concept looks like in those spaces, making sure we have the right square footage in those spaces to showcase the brand. Forty percent of jewelry is bought in independent jewelers. It’s been that way almost forever. I doubt that it’s going to change dramatically in the next four to five years.
JCK: Do you see a lot of growth in the concept stores?
Burger: Yes, but from an organic standpoint. We have always taken a very quality-driven approach. We don’t want to be like Gap, where we open a bunch of stores just to close them a few years later. We continue to be very selection about real estate and location.
JCK: What role do you see the online channel playing?
Burger: I’m sure it will be a bigger chunk of our business. We launched the e-commerce site a year ago. But we have been online ever since we launched in North America. We [gave] e-tailing rights to about 40 different retailers. Historically, we have not had the same level of scrutiny around the brand standards for online distributors versus brick-and-mortar. Last year, we really took a hard look at that. As a result, about 15 percent of those closed.
JCK: How do you see the larger landscape for the charm business? Has it gotten more crowded?
Burger: In terms of charms, it’s a heck of a lot more crowded than it was a couple of years ago. There is no question about that. We have talked about diversifying our product line for a long time. With the push we put behind rings in 2014, and the success we have seen come out of it, I feel very encouraged about the Pandora business.
JCK: Would you consider yourself the biggest brand in the jewelry industry?
Burger: If you look at revenue, we are second behind Tiffany. We are very proud of that. Tiffany has a 100-year heritage. We have been in North America for 13 years. If you look globally, the amount of balance and success we have had around the world, is unparalleled. I can’t think of another brand in jewelry that has the balanced success across the three regions that we have.
JCK: Anything else you would like to say to the industry?
Burger: A heartfelt thanks. I think I struggle a bit when I sit on the sidelines and read some of the commentary, because we are very very proud of the way the brand has grown. We are very appreciative of the role that independent jewelers and multi-branded jewelers have played in it, and continue to play in it, albeit maybe in a different way. If we were not able to evolve that concept over the last 13 years and to do it in a way that excites people enough to invest a lot of money behind it, we wouldn’t be where we are today. We are a partnership in every sense of the word, we continue to be, even if at times that means there are some hard decisions that have to be made about some long-standing relationships. So I thank them for their support over the years, I thank all the people who have been with us for a long, long time, and I believe our best days are ahead.
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