Acting as Amazon Outposts Gives Stores a Sales Boost

As online shopping soars, the service has proven to be a more effective way to lure customers than advertising

Hadar Kane
Hadar Kane
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משרדי אמזון
משרדי אמזוןCredit: Mark Lennihan/אי־פי
Hadar Kane
Hadar Kane

“Excuse me, where is the post office?” asks actress Alma Zack, playing the part of someone who’s ordered a package from overseas. “In the 1990s. Today packages are here. Come on in,” answers comedian Eli Finish, playing the part of a kiosk owner.

He starts looking for the package on shelves that once held soft drink bottles. He doesn’t find it and the woman wanders between stores in the mall – at a grocer, a pet store and even a shwarma place.

That skit, which appeared in the satirical Israeli television show Eretz Nehederet, isn’t that far removed from reality. Instead of waiting at long lines at the post office – lines that have grown even more snakey and time-consuming with the onslaught of online shopping – Israelis can now get their deliveries from a wide and constantly changing list of retailers.

Israel Post and the delivery companies have learned that pick-up points at shops are a relatively inexpensive way to speed up deliveries. Certainly it’s much cheaper than delivering to the recipient’s home, which is the main alternative to post-office delivery, and delivery services can sign up as many stores as they want or need to provide the service.

The stores get paid between 1 and 2 shekels (29-58 cents) per package handled, depending on factors like the store’s location and how many packages it can store at any given time. Stores typically handle 20-50 packages a day.

That said, the system doesn’t always work. Two years ago, for instance, the delivery service E-Post ended an agreement with a shop in Tel Aviv’s Florentin neighborhood after customers complained of unfriendly service and chaotic storage.

“We are attentive to the customer service experiences and run area agents who check the quality in stores. A negative store review is examined in depth, and once we recognize that the customer service experience has been compromised, we act immediately to discontinue service at the store,” said Yaniv Ben-Tovim, CEO and owner of HFD, a nationwide delivery company.

Ben-Tovim was among the first in Israel to see the system as a way of reducing costs. “We wanted to provide a solution for lower-value deliveries,” he explained, by which he means deliveries worth less than $75, the maximum that makes deliveries from overseas exempt from tax.

“We say that in Europe, mainly Britain and Germany, they were using lockers or local stores. We weren’t sure how the customer-store interface would work because at the end of the day, it’s not the storeowner’s customers but ours. However, we were pleasantly surprised. We found that it was a win-win for the end-user, the store owner and us.”

HFD now operates 600 pick-up points from Kiryat Shmona in the north to Eilat in the south. Others followed suit. Israel Post now has more than 1,200 points – 650 post office branches and more than 500 at mom-and-pop and chain stores. They include Shufersal supermarkets, major shopping malls and convenience stores at Paz filling stations.

Frenchie, a Tel Aviv pet store, has been a pick-up point for E-Post and another delivery service, Boxit, for more than a year. Store owner Shar Naor said Boxit brings over two to five packages every day and E-Post comes only twice weekly but each delivery can be up to 100 packages.

For him, it’s not the payment he receives from the delivery companies he cares about but the customers the service brings.

“I get a token payment, just peanuts on each package. But what’s important is that it brings traffic to the store. … People get to know me and I’m exposed to new customers. I’ve gotten a lot of new regulars from this,” he said.

Shay Sela, who runs a Tambour paint store in the Tel Aviv suburb of Givatayim, agrees. “Among all my attempts at drumming up sales, that has worked the best. I used to distribute fliers – 20,000 of them would bring me two new customers. This way [as a pick-up center] 600 people come into the story every month, just to get their deliveries, he said.

Tal Bibas also found that package pick-up was a better marketing tool than anything else he had tried after he opened his dog and cat haircutting salon and pet supply store in Be’er Sheva two years ago.

“Visibility is a bit problematic. I tried to raise my profile on Instagram and Facebook, but it didn’t work. So I was looking for ways to boost store traffic. One vendor recommended distributing packages, and that’s how I started. I’ve seen a big difference in our traffic. Once we started distributing packages, it increased. People see us – one buys food, the other orders a haircut, the third takes a business card and passes on to a friend. It saved the store for me.”

He’s invested in the service by building a closet with 15 cubbyholes to store packages and find them more easily. On quiet days, 15-20 packages arrive; on busy ones, the number can reach 50. On Black Friday and other major sale days, it can reach 100.

Ben-Tovim estimates that the stores he works with see their turnover grow by 20-25% due to the increased traffic. The biggest beneficiaries are stores selling things that people buy on the spur of the moment. But even in stores like Yoram Ayalon’s, which sells cellphones and electronic gadgets in Nahariya, gain over the long run. He has been a pick-up center for four years.

“In the beginning, the idea got some people’s backs up, but they got used to it and I’ve gotten some regular customers out of it. I know them by name because every week or two, they come to pick up something,” Ayalon said.

Even though it’s not their principal line of business, the stores often prove to be more efficient than Israel Post.

Last November, the post office was overwhelmed by a combination of Black Friday and the launch of Amazon Israel with a come-on of free delivery for orders of more than $49. Complaints about delayed deliveries and lost and damaged packages soared, but store pick-up points were able to handle the surge much better.

“Israelis place orders endlessly. In November-December, they asked me to take more packages than usual – there was real pressure,” said Naor. “But I decided not to take substantially more than I could handle, so I wouldn’t hurt my regular customers.”

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