Every November and December, Israelis have been breaking online shopping records. In the last two months of 2019, Israelis spent 13.1 billion shekels ($3.9 billion) online, particular during sales events such as Black Friday, Cyber Monday, China’s Singles Day and the local version, ShoppingIL.
But this year, the coronavirus pandemic has shaken things up around the world. Over the past several months, reports have mounted of goods shortages, higher prices and international shipping delays. As a result, the end-of-the-year discounts are likely to be relatively modest this time.
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One change in Israel is likely to be the local sites’ market share of purchases. In normal years, Israelis would typically place most of their orders with international sites, which have a long history of deep discounts at that time of year. Typically some 65-70% of online end-of-year purchases are from international giants such as Amazon, Aliexpress, Asos and Next. The remainder are from local online shops or the websites of local stores.
This year, industry analysts say the trend will be reversed – local sites are expected to increase their share, at the expense of purchases from abroad.
China’s Singles Day is November 11, Black Friday falls on November 27 and Cyber Monday is November 30.
Nir Zigdon, the founder of Ecommunity, which specializes in building online stores, stated, “The global online sphere still hasn’t returned to its pre-coronavirus functioning – and shipping has become more expensive. Amazon was offering free shipping [to Israel] last year, but this year shipping is starting at $15. There’s a shortage of goods, so some sites are limiting international shipping on some items because they’re obligated first of all to local customers, the Americans. Paradoxically, it’s the local websites that are likely to draw Israeli customers and profit during the Christmas season.”
Israelis favor international sites because they offer good service, attractive prices and fast shipping. But now, supply shortages and shipping delays have changed that. There are shortages particularly when it comes to laptops, desktop computers, tablets, kitchen items and small appliances.
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The dramatic drop in frequency of international flights has made international shipping less efficient, and thus is making deliveries more expensive. Amazon, for example, did away with its deal offering free shipping to Israel on purchases of $49 or more. For a while, it halted shipments to Israel outright, but later reinstated them with higher shipping costs. British website Next temporarily halted shipping outside the counter as well, and Chinese site Aliexpress has been facing delays, shortages and a decline in sales.
Ben Bohanik, an expert in online purchases who moderates the Facebook group “That’s what I want,” says that based on the example of Prime Day, Amazon’s sale holidays for paying subscribers that typically takes place in July but was pushed back three times until October, online sales campaigns will be less worthwhile for Israelis this year.
“Prime Day sales stats were good this year,” he says, “but the sales weren’t as worthwhile for Israelis. Israelis were offered discounts that weren’t as good as those offered to locals” – the people living in countries where Amazon has warehouses, such as the United States, the United Kingdom and Germany. “Shipping prices are way up, and standard products now have shipping costs of 15-20 euros at least. Things were out of stock, not everything had shipping to Israel and it was also hard to find attractive deals. Regarding Black Friday, I think that Israel’s local stores are going to be in for a good surprise,” Bohanik adds.
The March lockdown, intended to stop the spread of the novel coronavirus, also brought good news for local online stores. Physical stores were closed, sending customers online and pushing up sales dramatically. Thus, after Israeli online commerce trailed years behind the Western world, local retailers made a dramatic shift online over the span of a few months. A review conducted by credit card companies on behalf of TheMarker found that Israeli purchases from foreign websites were down 37% between March and the end of August, compared to the parallel period of 2019. There was a 10% increase in purchases from local websites over that period.
Uri Lahav, CEO of the electronics chain ALM, says that local stores are trying to prepare. It’s not clear whether stores will be open, and even if they are, many Israelis would be hesitant to enter crowds, so most sales will likely be online, he says.
Most local retailers see the shift as an opportunity, he says. “If in the past most consumers preferred foreign sites because of the lower prices, this year they’re buying locally because of the certainty,” he says. “Israeli suppliers understand that this is a chance to save their financial results.”