Pandora Case Executive Summary

CCC Global 2022

As one of the world’s main luxury jewelry brands, Pandora has years of expertise and
craftsmanship. This is apparent when it comes to brand awareness, the global
omnichannel distribution network, and the level of offered personalization.

However, there is a strong need to attract Gen Z and Millennials to the brand.
Furthermore, the US and China are key attractive markets that need to be further
explored. With the current brand positioning of Pandora, it will be hard to conquer both
the new markets and the younger generations.

Therefore, we propose to launch a new brand: ATHENA by Pandora. With this new brand,
Pandora has the tools to attract the four key segments. Besides that, it can attract a
wider audience by letting go of the traditionally feminine image of Pandora. To further
increase appeal for environmentally concerned customers, the products emphasize
sustainability.

Athena can be described in three words: Personal. Exclusive. Digital. With Personal,
Athena customers can personalize their products and charms. This is essentially a new,
modern home for the current Pandora ME product. Under Exclusive, there are limited-
edition products only offered on MyAthena.com or the app. Furthermore, there will be
collaborations with celebrities and popular, modern brands. A completely new area for
Pandora will be Athena SmartStyle, reflecting Digital needs for younger customers.
SmartStyle will have the app-enabled SmartRing and SmartBracelet with fitness and NFC
contactless features to facilitate a healthy, modern lifestyle as Gen Z and Millennial
customers like it.

Customers can interact with Athena online through the app and website with virtual try-
on capabilities. Social media is another main channel. In China, WeChat will be supported.
In-person experiences are also a key factor to the brand. Urban-styled Flagship Athena
Experience Stores will be launched, leveraging current concept store capabilities. In
Pandora-brand stores, small Meet Athena exhibits will introduce customers to the
brand, and they can place online orders right from the exhibit’s tablet.

Through the launch of Athena, Pandora will be able to achieve a revenue growth rate of
over 6%. The overall NPV of the proposed strategy is 3,703 DKKm.

Athena will help Pandora secure further expansion, both geographically and
demographically.

Blue Rock
Consulting
Pandora
Crafting New Opportunity

Blue Rock
Consulting

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 1
Pandora Must Win Younger Customers
Pandoras Success Is Determined By Its… Gen Z Represents Huge Opportunities For Pandora…

1
Personalized And Customer Oriented
Product Offerings And Customer Service

Growing Numbers Purchasing Power Increase in Demand

2 Gen Z already makes up Gen Z already has a Gen Z causes rapid growth
High Brand Awareness And High
Presence On (Social Media) Online 25% of the US – purchasing power of 150 in China’s personal luxury
Platforms and 15% of China’s billion in the US alone good market
population

3 Currently, only 19% of Pandora’s customers are from Gen Z.

Far Reaching Global Network For Both
Customers And Production
Therefore, Pandora misses out on major revenue streams and runs the
future risk of losing its customers.

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 2
Gen Z differs from Previous Generations
Market Trends Market Data Implications
Global Income Of Gen Z until 2030

Gen Z will account for 2030 $33 trillion Thus it is very

1 27% of the global
income by 2030
2025 $17 trillion 1 important to win this
2020 $7 trillion
generation now

Gen Z cares about Thus personalized and

expressing themselves 73% 37%
2 and about the 2 sustainable jewellery is
very important
environment Gen Z want to Gen Z make climate
express themselves change their
primary concern

% Number of purchases Made Online

Gen Z and Millennials
Thus an omnichannel
3
use online channels
3
5%
- 42.
shopping experience is
more than other
generations 19% 42%
of major importance
Other groups Millennials/Gen Z

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 3
Gen Z in USA and China Should be Targeted
USA and China represent the biggest markets for Jewelry: Market trends china:

China $112.62 billion Shift towards

USA $43 billion
73% 37% personal jewellery?

34% of Chinese Only 12% of Chinese

women purchase women use jewelry for Shift away from
Gen Z: 68.2 Mln. Gen Z: 210 Mln. Jewelry to celebrate romantic commitment
own milestones gifts and romantic?

Market trends US:

There has been a steady growth in men jewelry

Shift towards men
$4.3 billion
$5.3 billion jewellery?
2012 2017

Shift towards
US currently holds the biggest market
share of smart accessories (28%) smart wearables?

Pandora’s Main Global Markets in 2021

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 4
Which Strategy can Tackle the Opportunity of Gen Z?

Extending Pandora ME Launching a new brand by Pandora

+ Leveraging an existing category, which has already

+ Launching a completely new brand, allowing it to only
44% of Millennials as customers target Gen Z without changing the Pandora reputation

- However Pandora ME has only 11% Gen Z customers, +

Leveraging existing strengths and experiences within
although this category is explicitly skewed towards
a new brand, allowing it to effectively target Gen Z
Gen Z

- -
Pandora ME is strongly associated with Pandora, Bears moderate risk as there is no certainty that
which could block the association of self expression Gen Z will accept this brand

= =
Thus extending Pandora ME might be the most Thus launching a new brand bears some risk,
convenient option but has clear limitations but even greater opportunity

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 5
 Personal. Exclusive. Digital.

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 6
Introducing Athena. A Brand Young People Will Identify With.
Innovative
Brand Characteristics
Creating added value
Innovative through offering new
technologies integrated
Wider Appeal into jewelry
Wider Appeal
Offering more masculine
accessory to attract young
men who increasingly
exhibit higher jewelry usage

Customizable Products Customizable Products Sustainable Solutions

Sustainable Solutions Providing various Attracting young people by

modification options in fostering sustainability
order to allow customers through lab-creation and
to express their uniqueness recycling materials

Increased interest among Athena can go beyond Pandora in attracting young people
younger generations because of its initial positioning as a youth brand.

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 7
Athena will Appeal to a Wider Audience with Personal and
Exclusive Offerings

Personal. Exclusive.
The new, modern home of the current Limited-edition products available online
Pandora ME product will create popularity around the brand

Fully personalized products with a Through celebrity collaborations,

more modern brand feel Athena will win new customers

A digital-first concept that puts the The rarity of the items will
customer’s identity first contribute to Athena’s reputation

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 8
Athena SmartStyle brings Luxury and Technology Together

Digital.
SmartStyle will add a new, digital
dimension to Athena’s jewelry

SmartRing and SmartBracelet will

have health and NFC functionality

MY
Offers customers a combination of
ATHENA
functionality and luxury style

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 9
Customers have several Main Channels to Interact with Athena

app ATHENA EXPERIENCE MEET ATHENA

.com
STORE exhibits

Accessible from Experience Athena in

anywhere An immersive way to interact with Pandora Stores
Athena’s products
The (only) place for Introduces new
Athena Limited Editions Try on new items and personalize customers to the brand
yours right away
Try on products Try on products
virtually Pick up with Click & Collect Service virtually

Use a familiar, local experience as a Leverage global social media to

channel for growth in China promote the brand and make sales

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 10
The Strategy Will Be Implemented Over 4 Years
Tomorrow's Action Points

Begin Contact Marketing to develop Build a list of potential Contact Human Kick-Off
the strategy for the Athena celebrity collaborations Resources to begin
launch recruitment efforts
Implementation Timeline Must-Win Battles
Athena SmartStyle
FY 2022 launch FY 2023 FY 2024 launch FY 2025
Design of the New products
new products Design improvements & innovations
integrated into the
Personal. customization tools
Implementing in-store
Marketing Marketing
modification systems

Limited editions
Planning and creating new limited editions Creation of Athena’s
creation
Exclusive. first limited edition
Initiate first product line
Planning and realizing future collaborations
collaborations

Technology testing and

Technology development Planning developments
perfecting
Digital. Launch of the
Employing
engineers
Create procedures & support Marketing SmartStyle line

New experience
store openings
+ 7 stores + 39 stores + 42 stores

Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 11
 Strong and Consistent Growth with Athena
A total investment of 2,364 DKKm over 5 years 4 Main Costs Categories

2500
Cost Breakdown 759 DKKm
2000 564 412 DKKm
Athena
518 Personal
1500 (General)
DKKm

2364
1000 472 537 DKKm
500 426 Exclusive 655 DKKm
0
384 Digital
2023F 2024F 2025F 2026F 2027F Total

Growth rates > 6% p.a. with a Revenue of over 25,000 DKKm Key Assumptions An NPV of $10.6 Million
30000 7
0.36%
Market Share 2,364 DKKm
25000 6 (2026)
Costs
5
Revenue (DKKm)

20000

Growth (%)
15000
4
5.3% Discount Rate 3,703 DKKm
3
NPV
10000
2

Personal(ized)
5000 1
80%
sales
13,773 DDKm
0 0 Revenue
2023F 2024F 2025F 2026F 2027F
Blue Rock
Consulting Analysis | Recommendation | Implementation | Impact 12
How Athena Will Leverage Pandora’s Capabilities

From Existing Capabilities… To capturing added value

Utilizing existing customers data and social

1 Distribution channels platforms to reach target segments

Opening of the Athena sections within the

2 Physical shops existing stores, along with concept stores

Utilizing existing customization and virtual

3 Platforms and technologies technology that attracts younger customers

Athena will build on the Pandora’s ME platform, provide additional value to customers
through technology development & brand image, and ultimately replace the ME platform

Blue Rock
Consulting Appendix 13
Risks & Mitigations

Risk Action
1. Customers will not be Heat Map 1. Meet Athena exhibits in Pandora
able to find Athena Stores, Athena Experience

High
Stores, and digital advertising
increase awareness

2. Athena eats into 2. Resources can be shifted from

Pandora brand market Liklihood 1. Pandora to Athena to better
share 2.
4. reflect demand

3. SmartStyle R&D faces 3. 3. Use brand leverage and potential

too many hurdles partnerships with technology
Low

companies to cooperate.

4. SmartStyle does not Low Threat High 4. Use all available channels to
gain traction emphasize value proposition

Blue Rock
Consulting Appendix 14
Cost Breakdown and Incremental Revenue
Athena Cost Breakdown Athena Incremental Revenue

Blue Rock
Consulting Appendix 15
Income and NPV
Projected Income

NPV Analysis

(in DKKm)

Blue Rock
Consulting Appendix 16