Have Israeli merchants discovered Christmas?
In a way, they have. Pressed by declining sales in the key apparel segment, falling traffic at shopping malls, banks growing stingier about lending and the rapid growth of ecommerce, Israel’s big retail chains are increasingly following worldwide trends when it comes to discounting.
The evidence will emerge next week as the global shopping frenzy that starts in November and ends with the Christmas and New Year’s holidays is met in Israel by big sales at the country’s stores.
“Once it was Hanukkah and Rosh Hashana that were the big holidays for the apparel sector in Israel. That’s when the big sales occurred. Today it’s the big internet sales holidays – from Black Friday to Cyber Monday,” said an executive at one of Israel’s big fashion chains, who asked not to be identified.
Israeli retailers have no choice. Online shopping is growing quickly in the country and most of it is done on overseas sites like Amazon, eBay and Alibaba, not on local ones. Prices are lower overseas, the selection is more extensive and purchases are exempt from taxes and customs, up to a limit.
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Having seen their sales eaten away by overseas ecommerce sites over the last several years, Israeli retailers have decided to join them in these global shopping events rather than keep to their traditional schedule of sale days. That applies to their bricks-and-mortar stores and their websites.
“The world has become digitized, and we’re acting accordingly. The public is waiting for these sales and that’s what is dictating the market,” the executive explained. “All the fashion chains have tried to avoid big discounting until November and December and are timing their real sales to coincide with those online.”
The two-month worldwide shopping spree kicks off November 1 with post-Halloween sales. For Israelis, the sales are a chance to buy unsold Halloween costumes from overseas websites at clearance sale prices and take them out for the Purim holiday in March.
Next comes Shopping.il, an event creating by Google to spur online sales in Israel that will take place on November 6 and 7. Last year 1,800 businesses participated, with discounts in the tens of percent. This year the big Israeli retailers like Castro, Golf, Kravitz, Crazy Line and Hoodies are planning big sales in the hope of capturing shoppers’ shekels before their overseas competition embarks on their own giant sale days.
Singles Day, which began in China two decades ago and was adopted by Alibaba in 2009, follows on November 11. It spells big discounts mainly on apparel, gadgets and children’s products. The 11th is also Veterans Day in the U.S., when online merchants cut prices on electronics.
The biggest sale of them all is Black Friday, which this year is on November 29 and kicks off the Christmas shopping season.
Small Business Saturday, which was launched by American Express to help smaller business compete with the giants and their Black Friday sales, comes on November 30. Cyber Monday, begun in 2007 as the online answer to Black Friday when it was a mainly brick-and-mortar phenomenon, takes place December 12. It offers even steeper discounts online than Black Friday.
If that isn’t enough, there’s Green Monday (December 9, started by eBay), Super Saturday (December 21, the last big sale day before Christmas) and Boxing Day in Britain (December 26, where more sales come as merchants offload unsold Christmas merchandise).
A retail executive, also speaking anonymously, admitted the sales in the stores are nothing compared to what shoppers will find starting next month.
“What we’re seeing now in the store is the usual kind of discounts. Winter hasn’t arrived yet. When it comes, the real sales will come, too,” he said, adding that the discounts will grow as the month of November progresses. “Everything will be decided on sales turnover – if the chain store sales continue to be poor, the discounting will increase quickly.”
The timing of the big sales is also connected with finances. “Merchants need as much cash flow as possible toward the end of the year. You have to understand that in December the chains are paying for their summer collections merchandise in order to ensure it arrives by Passover,” said a source in the apparel retail sector.
“Once the fashion chains could go to the bank and get a loan to pay for their collections, but the banks have cut back on lending to the apparel sector and aren’t giving them more money,” he said.
Weather is another factor. “The retail chains need cash fast, but they don’t want to rush into end-of-season sales because if it starts raining tomorrow, rainfall and shoppers start coming into the stores and retailers can continue selling at a price that will make them a good return,” the source explained. “If the weather continues to be hot, in two weeks we’ll start seeing bigger sales.”