OD Store Phenomenon. The confectionery outlet with major brands at never seen before prices.

Founded in Bergamo in 2014, the model now has 32 sales points spread across Northern Italy and is continuing its unstoppable expansion.

Mauro Tiberti, CEO and founder of OD Store, has created the first Italian chain of stores specializing in confectioneries. The strength of OD Store is its vast assortment, which includes both major brands present in large-scale retail channels and handmade and fresh baked products, at prices that are 20-60% less than traditional retail chains.

What impact can this phenomenon have on candy sales of large-scale retail channels?

Analysis of the format

Nowadays, the candy outlet is considered a reality that is in rapid expansion with over 300 employees, 70 million euros in turnover and its own brand, Sapori Italiani. Starting from a small artisan reality focused on producing bread and confectionery products from the best traditional recipes, Mauro Tiberti has realized his dream of creating a container where candy lovers can find anything they could wish for at an outlet price.

The sales points, with an average of about 600 square meters each, are located in high traffic areas such as city centers and shopping malls. The formula depends on 3 factors: a vast assortment of the best brands, low prices and fresh products. OD Store is not just a chain of stores with stock products of the best brands (Lindt, Perugina, etc…) at unbeatable prices, it also offers fresh, traditional and quality products handmade in their artisan workshops, part of which are sold under the brand name Sapori Italiani. It’s the presence of fresh products that differentiates OD Store from large-scale retail channels. Upon its opening in 2014, the percentage of its own products amounted to 30% of the assortment in the sales point. In 2015 this number has grown to over 60%, and today the company expects to close the 2016 year with an incredible 80%.

Point fo sale consideration

According to Attilio Brighetti, Senior Consultant at Athena, after analyzing OD Store’s model, a series of curiosities arose from the logic controlling the definition of the chain’s assortments. As for the products of major brands, it appears that OD Store merely limits itself to taking advantage of commercial opportunities that would bring to its sales points favorably priced products that would instead be resold by large-scale retail channels at 30% more. A typical example would be the Tre Marie brand, until a fews years ago a symbol of the traditional Milanese confectionery and synonymous with high-end pastry products. The traditional Tre Marie panettone and pandoro, offered at €16,00 euros in bakeries and €11,50 euros in supermarkets, can be found in OD Stores at just €9,90 euros.

As regards products packaged under the brand name Sapori Artigianali, instead, it is not clear whether there is a true effect on the product segments at a Category Management level and, as a result, if the aspect regarding the attribution of assortments throughout the sales points network is purely centralized or does it give way to individual shops to having a degree of freedom of choice on the basis of their intrinsic (ex. dimensions) and extrinsic characteristics. Finally, how will the display of products and the location of various departments at the sales points be managed? From what we have been able to verify, sales points in most commercial areas prefer a setting that aims toward a cardboard display compared to those of single sales units.

To explore these issues and to be reflected in our analysis, we tried to get in touch with OD Store through its press office which, unfortunately, has not yet responded.

Future scenarios

The rapid and effective spreading of OD Store and its particularly aggressive business policies could likely lead to a significant decline in sales of the candy departments of large-scale retail channels, which are in no condition to play the game of price incentives.

Therefore, there is an interesting growth perspective for Mauro Tiberti’s chain. By virtue of the success achieved so far with the model, obtained also thanks to substantial investments in advertising, the company aims to further expand its customer base by winning over online consumers with a shop that offers, in addition to the usual brands at discounted prices, attractive offers on specific product lines such as, for example, ‘Linea Fitness’, ‘Aperitivo Classico’ or ‘Pasticceria Tipica Italiana’, openly challenging Galbusera and other online confectionery outlets.



SOURCES

OD Store’s Website

You Mark – “Outlet dolciario: fine 2015 a 50 milioni di fatturato e 26 negozi attivi. In comunicazione 1 milione di euro, perlopiù in volantini, ma volendo incrementare pro e-commerce, dopo l’esordio in telepromozione. Agenzie? L’obiettivo qui è rimanere flat.”

Padova Oggi – “Nuove aperture in città: in piazza Garibaldi a Padova arriva l’outlet dei dolci, “OD Store”sull’apertura del punto vendita di Padova

Italia Oggi – “Outlet dolciario si fa spazio in città”

Corriere della Sera Milano – “Piazza Duomo tra «sacro e profano». Via San Paolo, arriva l’outlet dei dolci”

Food Web – “Outlet dolciario, 11 aperture in programma nel 2016”

Il Gazzettino – “L’outlet dolciario OD Store, con 330 addetti e un fatturato di 70 milioni”

Galbusera’s online confectionary outlet

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