Shape Patissier is a diet bakery specialising in the production of sweet baked goods, chocolate pralines and chocolate bars that promote a balanced and healthy lifestyle, by paying attention to nutritional needs. Currently operating as a hybrid business combining physical and digital sales channels, Shape Patissier has come a long way since it was founded in 2018 and has been able to successfully leverage a number of digital tools and services by taking a proactive approach to digitalisation and cooperating with digital platforms.
How the use of digital tools by an Israeli bakery enabled them to fully leverage the benefits of their hybrid operations.
Abstract
Background
Shape Patissier is a diet bakery specialising in the production of sweet baked goods, chocolate pralines and chocolate bars that promote a balanced and healthy lifestyle, by paying attention to nutritional needs. Shape Patissier was founded in 2018 by Tamar Shilon, an entrepreneur, dietitian and confectioner. Her goal was to take an innovative approach to baking, making it accessible and enjoyable for everyone, regardless of dietary restrictions. The products are carefully designed with high fiber and high protein levels, to suit different dietary restrictions including gluten or dairy intolerance and diabetes. Shape Patissier currently employs 10 people.
Challenge
The challenges faced by Shape Patissier have been multifaceted and have required creative digital solutions. As a small business owner, Tamar needs to manage all aspects of the business, including production efficiency and increasing sales and revenue. Two challenges were particularly hard to overcome for Shape Patissier: the logistics challenges and those associated with the marketing transformation.
The logistical aspect of the business has been particularly complex. Ensuring temperature-controlled door-to-door delivery at a reasonable cost presented a significant logistical challenge that required meticulous planning and methodology for order intake, production timeline, monitoring inventory and delivery variables. On a daily basis, Tamar grappled with pivotal business and logistical dilemmas such as whether to offer promotions on specific products or extend the incoming order window. These dilemmas demanded real-time, data-driven decision-making solutions.
The digital marketing landscape poses challenges, particularly for a small business such as this, that often requires additional explanation to the clients who might find the product or product value less intuitive. Moreover, in mid-2023, the online marketing challenges became existential to the business, due to algorithmic changes on platforms like Google and Facebook that such a small business could not tackle. The outcome was that though a significant marketing budget was allocated, the return on investment (ROI) didn't match expectations. Adapting to these changes required a significant shift in marketing strategies.
Digitalisation path
By developing their digital presence and investing in digital processes Shape Patissier was able to grow its customer base and scale its operations by setting up a physical store. In 2018, Tamar began running her business from her living room, taking orders through messaging software and relying on spreadsheets and post-its to organise outgoing orders. It was an informal start, but within weeks a website was set up using Wix, a free website builder. The website quickly transformed into a full-fledged online store; however, the backend was still managed using spreadsheets, particularly for order processing and inventory management. As the business grew, Tamar could no longer operate from her house. She moved into a small bakery that she transformed into a boutique factory. In accordance with trends indicating that consumers are increasingly combining online and physical channels in their purchase decisions, Shape Patissier also started to operate in a hybrid way. The physical growth of the business became parallel to the digital one with sustained investments in digital processes to minimise direct customer interactions and maximise automation and digitalisation.
The integration of these digital tools in day-to-day business processes played a significant role in improving the efficiency of business processes. Leveraging the solutions offered by the digital platform Wix as a one-stop-shop for inventory management, integrating delivery apps, creating loyalty programs, circling newsletters and managing promotional efforts. Leveraging the connectivity of the digital platforms she was using, Tamar was able to collaborate with major players in the door-to-door delivery business including Wolt, which significantly improved the efficiency of the delivery process. The need to automate delivery services appeared like a necessity to Shape Patissier given customer’s demand for a timely and reliable delivery system in place.
The founder’s proactive attitude in the field of digitalisation was key in the success of her digital journey. SMEs tend to lack digital skills to successfully bring about their digital transformation, widening the digital. In fact, digital technologies tend to magnify the impact of minor improvements in skill, effort, or quality (OECD, 2015[1]). These include “hard” or technical skills to understand and leverage digital tools in a meaningful way but also “soft skills” encompassing interpersonal and cognitive skills (e.g. communication, problem solving capabilities). Furthermore, the incorporation of digital technologies often requires a reconfiguration of business processes which calls for managerial and strategic planning skills that are also less common among SMEs (OECD, 2023[2]; OECD, 2021[3]). Shape Patissier’s digital journey is a revealing example of the key enabling role of “soft” digital skills for SMEs. Tamar was proactive in testing digital tools and services and identifying areas of improvement that she communicated to the digital service providers she was in contact. By tailoring a digital strategy to the businesses’ specific needs and adapting processes accordingly, Shape Patissier’s was able to fully leverage the benefits of its hybrid operations. It is also a telling example of the potential for partnerships between technology providers and SMEs enabling the fine-tuning of digital tools and services with the potential to fast-track SME digitalisation.
Approach
To address marketing challenges, Shape Patissier adopted an innovative approach based on the affiliation of product ambassadors using an App. The shift in marketing strategy from conventional online campaigns to “affiliate” marketing was a game-changer for Shape Patissier. Initially, traditional digital marketing channels, particularly on social media platforms, proved to be less effective and financially unsustainable. The budget allocation for marketing grew significantly as the business expanded, but the returns diminished. Recognising the need for a shift, Tamar transitioned to an affiliate marketing model, collaborating with dietitians, influencers, and bloggers. This approach involved offering their audiences discounts through coded links and compensating them based on sales generated. It not only streamlined the marketing process but also enhanced brand exposure through content creation. Initially facing reluctance from advertising agencies to pursue this marketing strategy, Tamar decided to start using the affiliate application provided by the digital platform Wix. Moving away from working with advertising agencies to managing marketing efforts using digital tools, required time and effort however it allowed for significant cuts in marketing costs and was a decision that saved the business at a time of crisis according to Tamar.
The adoption of data driven decision making methods enabled Shape Patissier to navigate logistic challenges. Leveraging analytics tools offered by digital platforms, Tamar was able to access comprehensive reports, offering insights into various aspects of her online store. With this tool, Tamar keeps track of product inventory, enabling her to plan ahead effectively. Moreover, she can identify her highest-selling products, including different product variants, allowing her to tailor her offerings to meet customer demand accurately. Additionally, Tamar uses data to help her understand her customer’s journey, for example the abandoned cart reports help her understand which products customers are adding to their carts but not ultimately purchasing, enabling her to optimize her marketing strategies and improve conversion rates. This data-driven approach has not only improved the overall logistics of her business but has also enabled Tamar to provide her customers with a more seamless and reliable experience.
Government Support
Shape Patissier benefitted from the support of a consultant by the Israeli Agency for Small and Medium Businesses. However, realising that the focus wasn’t on digitalisation but rather on the business aspect, Tamar did not further pursue this path.
To learn more about SMEs digital transformation
OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, https://dx.doi.org/10.1787/bdb9256a-en.
OECD (2021), SME Digitalisation to Build Back Better, https://www.oecd-ilibrary.org/docserver/50193089-en.pdf?expires=1650895216&id=id&accname=ocid84004878&checksum=53749B8E6D032F7C164B559578354381
References
[4] OECD (2023), “ICT Access and Use by Businesses”, OECD Telecommunications and Internet Statistics (database), https://doi.org/10.1787/9d2cb97b-en (accessed on 3 March 2023).
[2] OECD (2023), “SMEs in the era of hybrid retail: Evidence from an OECD D4SME survey”, OECD SME and Entrepreneurship Papers, No. 41, OECD Publishing, Paris, https://doi.org/10.1787/882f30b0-en.
[3] OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, OECD Publishing, Paris, https://doi.org/10.1787/bdb9256a-en.
[1] OECD (2015), The Innovation Imperative: Contributing to Productivity, Growth and Well-Being, OECD Publishing, Paris, https://doi.org/10.1787/9789264239814-en.
