Coronavirus Lockdown Spurs Jump in Online Sales for Israel’s Retailers

Figures from credit card issuer Max show they accounted for up to 90% of all retail sales in March and April

Hadar Kane
Hadar Kane
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An employee prepares an order for Amazon at Porona warehouse in France, April 22, 2020.
An employee prepares an order for Amazon at Porona warehouse in France, April 22, 2020. Credit: REUTERS/Pascal Rossigno
Hadar Kane
Hadar Kane

Two-and-a-half months in lockdown and social distancing led to a surge of online buying by Israelis from local merchants, according to an analysis by the credit card issuer Max (formerly Leumi Card) for TheMarker.

It found that during March and April, online sales grew to as much as 90% of total retail for apparel, 75% for books, 50% for electronics and 45% for furniture. That compared with rates of 5% to 20% pre-crisis.

“During the coronavirus period, turnover in our physical stores was zero, but online grew a lot – by two- or three-fold. The bottom line is that it was the only way we could sell,” said Anat Bogner, CEO of Delta Galil Industries, a maker and retailer of apparel.

Nevertheless, online shopping accounted for only about 7.5% of retail turnover before the pandemic set in, so even a jump in sales fully couldn’t compensate retailers for the loss of store shopping.

Tal Cohen, vice president for business customers at Max, said retailers who had well-established ecommerce operations and long-term plans for developing them were the biggest beneficiaries of the sudden change in Israeli shopping habits.

Tal Cohen, vice president for business customers at Max
Tal Cohen, vice president for business customers at MaxCredit: MAX

“They reached targets they had set for themselves for two years from now. The coronavirus period gave a major push for the sites,” she said. “Even small businesses tried to organize themselves quickly and translate their bricks-and-mortar selling power to digital. ... It became the deciding factor of businesses’ ability to continue doing business during a challenging period.”

Online retail encountered glitches ranging from problems operating cites to delayed deliveries and faulty customer service. That was especially the case for businesses that launched websites for the first time during the pandemic and had to set up operations in short order.

Despite the gradual easing of the lockdown this month, Elad Goldenberg, an ecommerce consultant, termed the surge a “milestone” for Israeli retail. “Before the coronavirus, Israeli businesses hadn’t gone as far in developing online as other Western countries,” he said. “The coronavirus has helped them close the gap.”

Another boost to local ecommerce during the pandemic came because popular overseas sites, such as Amazon, which have dominated online sales, were burdened by slowed delivery times. Ali Express was forced to cancel orders.

Israelis who until now had avoided online shopping out of concern about security or, in the case of older shoppers, were not at ease with the internet, became converts, said Goldenberg. “Suddenly whole populations started to use Zoom and to shop on supermarket websites. That’s laid the groundwork for growth. Sales at sites for sports gear, toys and work tools rose unusually quickly,” he said.