Cheap Thrills: Luxury at a Low Price
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| Cofix site sends a "young and fresh" message, yet offers economy instead |
Israelis seem to be a bit schizophrenic about luxury and economy. They want quality products and services, but don't want to spend the extra money. There are some who are still looking for what we describe as a great deal, something of quality at a low price. A few years back it was called the "Subaru Mercedes effect" A car buyer wants a Mercedes but can only afford a Subaru (in the 1980s, the most popular Japanese economy car). Just two years ago, a coffee chain called Cofix, came out with 5 shekel (NIS) coffee. Real Colombian premium coffee, in a small cup, made with an Italian espresso/cappuccino coffee machine for about one half to one third compare to the competition. There was buzz about the idea, complaints about the horrendous cost of a cup of coffee (up to 16 shekels, about US$ 4) and predictions about the length of time the chain will stay in business. Flash forward two years and Cofix is going strong and even opened an economy supermarket location in Tel Aviv. As in the coffee shops: everything for 5 shekels.
The desire of wanting quality product for a low price is not unique here. Israelis are different in terms of the desire to have the latest model and with the most features. In local lingo "all the 'letters'" - essentially all the letters you have after the model (BMW 320i, or e, or ie, how about M or L, etc.) which indicated additional features. It's a serious consumerism at it's embryonic age. What is there to do when the economy is booming and people had pent up demand for goods? The search for the best at the best price is a serious spectator sport here, so keep your eyes open when roaming Tel Aviv. The "Cofix effect" a price reduction of coffee and morning baked goods is an indication of where the market is heading. Get a bit less, pay even less (get 1/3rd less and pay 1/2). Is this trend going to move other retailers and manufacturers? There was a spurt of luxury growth with Rolex and Ferrari opening official shops in Tel Aviv. Maybe we are having a slight swing towards the economy / generic market preference. My take, this is just a blip, someone out there will make a luxury cup of coffee which will grab the Israeli's imagination (as Starbucks have done in the US 30 years ago and off to the higher price races we are going. Stay tuned... this is going to be an interesting story.
The desire of wanting quality product for a low price is not unique here. Israelis are different in terms of the desire to have the latest model and with the most features. In local lingo "all the 'letters'" - essentially all the letters you have after the model (BMW 320i, or e, or ie, how about M or L, etc.) which indicated additional features. It's a serious consumerism at it's embryonic age. What is there to do when the economy is booming and people had pent up demand for goods? The search for the best at the best price is a serious spectator sport here, so keep your eyes open when roaming Tel Aviv. The "Cofix effect" a price reduction of coffee and morning baked goods is an indication of where the market is heading. Get a bit less, pay even less (get 1/3rd less and pay 1/2). Is this trend going to move other retailers and manufacturers? There was a spurt of luxury growth with Rolex and Ferrari opening official shops in Tel Aviv. Maybe we are having a slight swing towards the economy / generic market preference. My take, this is just a blip, someone out there will make a luxury cup of coffee which will grab the Israeli's imagination (as Starbucks have done in the US 30 years ago and off to the higher price races we are going. Stay tuned... this is going to be an interesting story.
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