Israelis seen ordering 14.5m online packages in Nov

Online shopping

Israelis ordered 13.5 million packages during last November's special online sales campaigns, the Israel Postal Company reports.

November bargains are set to begin, and will carry over into December as part of the traditional special bargain campaigns, such as Chinese Singles Day on November 11 and Cyber Monday on December 2. What used to be confined to international websites has now become part of Israeli shopping culture in both stores and websites.

Israel Postal Company figures show that 13.5 million packages were delivered in November 2018 following purchases by Israelis in these campaigns (out of a total of 65 million packages in all of 2018). The Postal Company projects 14.5 packages in a one-month span this year out of a yearly total of 70 million packages.

What is being offered at a discount? Everything: electrical appliances, fashion and sports items, toys, furniture, and even vacations and flight tickets. Everyone wants to jump on the bandwagon that is exceeding the sales records for all of the holidays combined. November is the strongest month for retailers. Preparation for a month in which we buy the most includes stocking up on inventory (including from previous years), recruiting employees (also by delivery companies), and putting pressure on suppliers to lower their prices.

Machsanei Hashmal electronic commerce manager Haim Aviad says that profit margins fall to a minimum when the chain's sales volumes allow it. Although the emphasis in November is customarily on ecommerce sales, physical stores will also be glad to get rid of their inventory before the end of the year.

Yonathan Ivgi, marketing and sales director at international delivery company DHL Express, predicts that the increase in sales this year will continue to break the record set in recent years, when Israelis bought 25% more than in the preceding year. Ivgi notes that Israeli sellers who export are benefitting from the global sales wave in November. He believes that exports by Israeli sellers sold directly to consumers will reach NIS 16 billion in 2019, "activity that is growing by leaps and bounds every year, and will jump 30% in the current shopping month." These exports include jewelry, sunglasses, Dead Sea products, gadgets, and textiles.

Electrical appliances: Taking advantage of lower prices

"We are getting ready for November with special products in a range of categories." Aviad explains. In many cases, "special products" includes items that are not the latest shout in technological innovation. In a sector in which innovations appear frequently, however, this does not mean that the product is inferior.

As an example, Aviad cites screens imported for November sales sold at a discount price because they did not have a Bluetooth connection. Another example is the prices of Dyson vacuum cleaners, one of the stars in November sales, which are being reduced by 5-20% as new models are going to market. Such revisions are more frequent than in the past, as a result of the competition and changes in shopping habits (more frequent replacement of electrical appliances).

Aviad comments, "The suppliers also understand the power of November, and they know that they have to provide us with large-scale bargains. The market isn't indifferent to this. We roll all of the discounts onto the consumers. A refrigerator now sold for NIS 3,400 will be sold for NIS 2,000 in another week. The discounts will reach 40%."

"Globes": When you boil it down, all you are doing is getting rid of inventory by the end of the year.

Aviad: "It's true that we're emptying warehouses, but the consumers are also benefiting, and they are waiting in particular to shop during this month. Our website sells more than all four branches put together in this period, although there will also be bargains in the stores."

Another example given by Aviad shows the drop in prices for electrical appliances. The most expensive product sold at Machsanei Hashmal last year was an 82-inch screen for NIS 25,000, down from the full price of NIS 28,000. This model is already "old" this year, but a comparable model will be sold for less than NIS 20,000. Aviad says that the downtrend in prices in electrical appliances in recent years will continue.

Fashion: November more important than end-of-season discounts

Preparations are also peaking in the fashion sector. Adika founder and CEO Dedy Shwartzberg says that since his company's website was founded seven years ago, it has been conducting Black Friday sales, and the sales volume has been growing from year to year. November has become more important than the fashion industry's usually end-of-season sales. "Someone who understands and loves fashion will usually buy on Black Friday instead of waiting for the end of the season. Last year, we sold 130,000 items on Black Friday, and it will be more this year."

How do the Israeli websites cope with the stiff competition from overseas websites, which are still the strong anchor for an Israeli consumer shopping online?

Aviad: "We understand that we won't be able to focus on the price. The consumer is looking beyond this, and that's where we're investing."

Israelis shop mainly on international websites (after comparing prices), but they also have the opportunity to do something for local businesses. 1,600 businesses will participate in Google's IL shopping: 80% of them are small businesses, and 160 of them are businesses that manufacture in Israel. The discounts will last for 48 hours. Last year, the sales volume on this special website reached NIS 72 million.

Shopping tips for the November discount holidays

A shopping list - What products do you need? It is worthwhile focusing among the sea of bargains.

Price comparison - The most important action before shopping for anything is comparing prices. The comparison should include the price in the bottom line. If it is a product from an international website, add the taxes and full delivery fee. On some of the websites, the full price is displayed only after the product is added to the shopping basket.

Supply of product - Do not rely exclusively on Amazon, eBay, or AliExpress. There are a great many large and small websites, and it is also worthwhile looking at them. Even if you do not manage to buy what you wanted, it is not so bad. December and the end-of-the-year bargains will soon be upon us.

Tax exemption - Shopping on overseas websites confers an extra benefit. Keep in mind that packages at a price of up to $75 (not including delivery) are tax-exempt, while packages at prices of $75-500, which account for only 2% of total purchases, are subject to VAT. The final price is displayed in advance on Amazon, as is the tax according to the amount of the purchase. On many websites, however, payment for a product subject to tax takes place when the product arrives in Israel (assuming that tax is charged, which is not always the case). Splitting packages into two does not provide exemption from taxation; where the customs duties authorities are concerned, packages sent at an interval of less than two days are likely to be calculated as a single package for tax purposes. The Tax Authority's ability to detect split packages among the mountains of packages at the post office, however, is limited.

Returning products and canceling transactions - It is worthwhile checking in advance whether the package will include a return envelope, so that you do not have to pay for returning the product, and what the conditions are for canceling a transaction.

Waiting until the last minute - in some cases, the discounts will become larger as the official final date for the bargain approaches. Furthermore, many websites offer a "flash sale" - an aggressive bargain campaign with a specific product for a limited time. It is worthwhile looking for them.

Before buying an electrical appliance from overseas, make sure than the electricity is compatible with Israel. It is also necessary to check whether the product requires standard approval (for example, a spare part for a car).

Cash back - It is possible to obtain a rebate from a transaction on various cash back websites, and through the credit cards that you pay with. It is worth checking out in advance.

Products that are not sent to Israel can be delivered to you via the delivery websites through a US address. Check in advance the total price of the package including this service. Delivery within the US is sometimes free of charge, and it is better to send the product through a US address and from there to Israel than getting direct delivery to Israel. This obviously has to be worked out ahead of time. If you buy a large product, such as a grill or furniture item, shipment by boat, which is cheaper, should not be ruled out in advance - patience is worthwhile.

The shopping holiday is also a holiday for Internet fraud. Check whether the website from which you buy is recognized. It is easy to find out details through a Google search. Do not be tempted to click on links to coupons from unknown sources, or to go after any sort of bait. If you have the option to pay via PayPal, it is better to pay in a way that brings another party into the transaction, who usually acts to the consumer's benefit in cases of a dispute with the business.

Published by Globes, Israel business news - en.globes.co.il - on October 31, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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