Israeli e-commerce works around Israel Post as Black Friday demand spikes
“I will never ever mail anything from abroad to Israel, and I will avoid at all costs mailing anything locally,” says one woman of the delays when ordering packages from abroad.
By NIV ELISUpdated: NOVEMBER 26, 2015 05:22The eBay sign(photo credit: REUTERS)
When Sharon Stern ordered a Maud Monkey-themed birthday decoration pack from Amazon six weeks before her daughter’s first birthday, she was certain it would arrive on time. She was mistaken.Though it only took three days to arrive from the United States, the $35 kit was held at customs for weeks, despite the $75 minimum for customs.When it was finally released, it took another several weeks for the mail to deliver it.“It’s in the basement now.We’ll use it next year, I guess,” said Stern. The experience left an impression. “I will never ever mail anything from abroad to Israel, and I will avoid at all costs mailing anything locally.”Stern is not alone in her disdain.A Facebook post on the topic yielded quick results: the man who received a contract for a part-time job six months after the job ended; the woman whose eBay-purchased dog accessories took more than two months to arrive, despite assurances they were sent immediately.With seemingly absurd delivery times and long lines for package pickup, Israel’s postal service has become a major bottleneck for e-commerce.As a result, Israeli companies are looking to alternative shipping methods. The need is particularly acute around Black Friday and Cyber Monday, when the postal service sees a 30 percent spike in packages, and Israelis spend seven times their typical levels due to a slew of great deals and discounts.“There’s no question that logistics is very weak in Israel,” said Dedi Schwarzberg, the CEO of Adika, one of Israel’s largest online retailers.
“It’s one of the major blocks to e-commerce here.”The company cannot avoid the mail altogether, and relies on it for returns. It has tried several private companies as alternatives, but has had little luck finding a service that fulfills all its needs at a good price. The site recently implemented NIS 5 delivery and returns, but only because it is large enough that its sales can subsidize delivery.“As the biggest site, I can allow myself to subsidize a little, but the smaller companies can’t allow themselves to do things like that. It’s a problem. Though I think the central aspect is the distrust Israelis have of online shopping,” he said.“Israel Post has to understand that Internet e-commerce is comfortable, and I hope that they internalize that the world is going from postcards to packages,” he added.Nimrod, a shoe-seller, has adopted a model similar to Zappos in the US, offering free shipping and returns, or pickup at its retail branches. It, too, uses a private company, Tapuz, and absorbs the cost of the shipping. The timing, however, still leaves something to be desired – it guarantees your shoes will arrive within 21 days.Other stores, such as Castro and Golf, are also turning to alternative shippers.An Israeli start-up called BoxIt has sprung up to alleviate long waits at the post office, delivering packages to lockers that users can unlock with an access code they get by SMS when the parcel arrives.The strategies may be working.An Ipsos study commissioned by PayPal showed that Israel’s e-commerce has continued to grow year after year, with 73% of respondents saying they make online purchases and the vast majority (79%) reporting buying items from abroad. Perhaps due to the country’s small size, Israelis were only behind Ireland and Austria in terms of the proportion of cross-border online shopping.“The variety in Israel isn’t good enough, though in the last year we see an improvement here,” said PayPal’s regional director for Israel and Africa, Efi Dahan.One of the central reasons for buying abroad was price, a factor that becomes less appealing if shipping is expensive. The study found that shipping costs were the top reason globally that people abandoned online orders, with 43% of respondents in the survey citing it as a reason.In Israel, where e-commerce will reach NIS 9.3 billion this year, three of the top five incentives people said would increase their chances of cross-border online shopping were related to shipping: free shipping (67%), faster delivery (52%) and free returns (44%).American Israelis like Stern, who grew accustomed to getting items shipped across an expansive country in a number of days, often find the inability of a New Jersey-sized state to quickly deliver a package baffling.But the Israel Post says a reform plan underway is already improving service and reducing wait times. The plan extends hours at branches and provides for opening pickup centers outside traditional post offices in places such as malls and supermarkets. Increasingly, it is using SMS messages to let customers know a package has arrived.A source said it has opened a dedicated war room to deal with increased seasonal deliveries, which are considerable. On November 20 alone, the Israel Post received 100 tons of packages to deliver – 2.5 times more than the average Friday.Perhaps in a year or two, companies will be giving thanks to its efficiency. In the meantime, however, their audience remains skeptical.“Long story short, don’t mail anything in Israel. I’d rather get in the car and deliver it,” said Stern. •