Israelis, as a whole, are very loyal to their country – but Ikea is by far now the most popular furniture store in Israel. Why have Israelis abandoned Herzl St. in Tel Aviv, the country’s furniture center, for Ikea? What does Ikea have that Israeli furniture stores don’t?
Variety – that’s what they have! Israelis want nice homes with knick-knacks and bric-a-bac, and they’re willing to pay. Until Ikea opened here a few years ago, Israelis would journey to the U.S. and Europe and bring back what they could – usually little items – to try and distinguish their homes from others. And when they were finally able to get the “big ticket” items that they couldn’t shlep on the plane, they descended on Ikea like hungry wolves.
You’d think other retailers would have realized by now that Israelis are ripe for the plucking, but so far no other major international chains have opened here – although Israeli furniture retailers have gotten the hint and have significantly updated their offerings.
Why am I going on about furniture? Because Ikea proves that choice and competition work; you get more for your money when companies have to compete for your business, and businesses that do not have to compete in this way feel they can inflate prices as much as they want. Take treadmills, for example; why are they triple and quadruple the price at Megasport than they are at Sears? Because. Whaddaya gonna do about it?
Well, Megasport’s day of reckoning – and the day of reckoning for many other retailers – may be coming soon, thanks to an Israeli-invented company called FiftyOne. FiftyOne runs a service that allows U.S. retailers to sell and ship goods around the world. I interviewed Mike DeSimone, the CEO of the company for Israel21C, and he told me all about it. They have several dozens stores – many of the ones you see in U.S. malls – as well as some big online retailers, like Overstock.com and Shoes.com. They will soon be adding retailers like the Gap, Macys, and Bloomingdales. And, they also have Sears.com, which by itself has tens of thousands of products!
You can connect to all of these retailers’ international sales services directly from FiftyOne’s merchant page. When you make a purchase, you’re essentially making it from FiftyOne, which keeps the books, determines the shipping (to Israel it’s usually five to fourteen business days) and the customs duties and VAT. It’s all determined before you place your order, so you know exactly how much you’re spending (not all stores ship to Israel, but enough do). Not all products are available at all sites; for example, we’ve been wanting a futon, which seem to be unavailable in Israel, but I couldn’t find one Sears was willing to ship here. On the other hand, I could have bought all the beanbag chairs I wanted.
The prices at Sears looked to be what they would in the U.S. (where most shipping is free) but the shipping pushes the price way up. Depending on the item, though, it might still be cheaper to order it online than to buy it here, even with the shipping and taxes. An exercise cycle, for example, came out to about $400 – NIS 1,500 or so – from Sears. I can’t imagine it costing less here.
Not all the prices were that great, however; Overstock.com seems to have more expensive prices for its Israeli customers, and a laptop I checked out there cost more than $200 higher than it did on Amazon. To order from Amazon, you can use the Mustop service – and when their shipping was added to the price of the laptop, the two figures weren’t that far apart.
But I’m willing to give FiftyOne some time – to get more stores and better (ie cheaper) shipping options, especially for bigger (and bigger ticker) items. Sooner or later, we’ll be able to import Kenmore washing machines and dryers directly into Israel!
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Why do Israelis prefer Ikea to Herzl Street? It’s simple: drive to Ikea (or take the train to Beit Yehoshua and a monit sherut from there). Park your car. Walk inside. Whatever furniture you need is inside that big box, and you know they’ll deliver to where you live without any nonsense, because that’s their business. When I made Aliyah and needed to buy four items – a bed, a desk, a chair and a coffee table – I could have gone to Herzl street and spent a day there inspecting all the places, bargaining for a deal and then negotiating separate deliveries with each one, with no real assurance that Herzl street would be able to provide what I wanted – or I could do my furniture shopping the easy way. Guess which option I chose.
Moreover, I did this knowing that Ikea in Israel is a rip-off (see the Billy Index). But between an international corporate brand that answers to Scandinavians versus some mom and pop combina-brokers, I chose to pay more so I could be sure that I’d be going to a place that was stocked adequately, where they wouldn’t make excuses for why the delivery didn’t show up, and all that hassle.
Whenever I go abroad, I bring back all sorts of things that I could buy here instead. And besides getting them for a normal price, it’s HUGELY gratifying not to have to do business with companies that treat me like garbage. As they say: in America the customer is always right; in Israel the customer must be proven wrong.