Survey of the Consumer Authority in the Histadrut: Israeli consumers are more patriotic, but are hurt by price increases

The war affects the way Israelis make consumer decisions: from buying local produce to choosing the companies from which to buy products due to rising prices. This is according to a new survey conducted by the Histadrut Authority for Consumers ahead of World Consumer Rights Day. The survey that examined the attitudes and perceptions of 600 respondents, who are a representative sample of the population in the State of Israel, was conducted through the Geocartography Research Institute.

Economic support on the home front is particularly important to Israelis, and about half of the survey participants stated that they make sure to buy blue and white products, and about 42% of the respondents even reported that they make sure to buy from small and medium-sized businesses. In the shadow of the current era, and out of an aspiration to strengthen the business owners who were recruited to fight, every third Israeli is careful to concentrate his purchases in businesses that are owned by maids and reserve servants.

The survey shows that Israelis do not forgive the violation of workers’ rights, especially when it concerns the reserve service. About 77% of the survey participants stated that they would stop purchasing from a certain business, if they found out that it violated the rights of its employees due to the reserve service.

“It is a shame that the relevant regulators have not yet found an effective mechanism that will prevent price increases in times of emergency”

“The Israeli consumer is in a climate of unceasing price increases, even during war. To this, considerations of social solidarity and contribution to the war effort are added,” says the CEO of the Histadrut Consumer Authority, attorney Yaron Levinson. “This solidarity is expressed by supporting affected businesses, purchasing locally produced products or businesses whose owners are in reserve service. It is a shame that the relevant regulators have not yet found an effective mechanism to prevent price increases in times of emergency. Something that would have helped to reduce the heavy burden imposed on consumers, especially during war.”

About 86% of Israelis reported that their average shopping basket has become more expensive since the start of hostilities. Following this, approximately 66% reported that they would consider not buying products from the companies that raised prices during this period. “There are a variety of reasons for this phenomenon,” Levinson explains. “High concentration in some categories of consumer products often limits the ability of consumers to abandon a brand and switch to cheaper alternatives. In some cases this really stems from brand loyalty, but in others, such as in the case of baby food compounds, it is also related to the difficulty of replacing a product that the child Get used to it.”

“Israeli consumers are forced to deal with the cost of living, despite many other issues that are troubling us all at the current time,” says Levinson, “Does this lead to giving up on trying to deal with the cost of living? The answer is no. Proof of this is that about two-thirds of the Israeli public will consider avoiding purchasing Products that became more expensive during the fighting, even though they are used to them.”

Artificial intelligence: a tool to control expenses or consumers?

About 57% of Israeli consumers perceive themselves as smart consumers, that is, they usually compare prices, check expiration dates, look for special offers, and more. This figure reflects a decrease of 5% compared to the previous survey, but on the other hand, at least 65% of the respondents to the survey often check their shopping accounts.

World Consumer Rights Day, celebrated worldwide on March 15, was held this year under the theme “Fair and Responsible Use of Artificial Intelligence” (AI). Even people who have not yet used ChatGPT are exposed every day to the extent of the impact of artificial intelligence tools on all aspects of our lives, and in the process also on our rights as consumers. For example, applications based on generative artificial intelligence (GenAI) are already able to imitate and conduct a human conversation today. Alongside new opportunities brought by technology, such as streamlining and improving systems in the service sector, the artificial intelligence revolution was also met with quite a few concerns. Among the reasons for concern are the violation of users’ rights in the field of privacy, the theft of means of identification and payment, the perpetuation of biases and discrimination, and other complex issues.

Only about 15% of the survey participants reported that they use applications or artificial intelligence software (such as Razap, Pricez, BARD and hatGPTC) in order to track their financial expenses and compare the prices of products and services. Among the users who use artificial intelligence platforms, an increase in their level of interest and understanding in the field of finance (such as: investments, deposits, economic conduct, etc.) has been reported.

An alarming statistic that emerges from the survey indicates that almost every third Israeli has been exposed to attempted fraud and theft of personal details when shopping online. “Consumer awareness on this subject must be increased,” says Levinson, “Unfortunately, we are witnessing that despite the extensive discussion on the subject, there are still reports of fraud on the Internet. The relevant regulators must run a comprehensive informational program on this subject.”

Among the latest innovations adopted by many Israelis is the use of the smart cart system in the major marketing chains. In these systems, the shopping carts automatically scan and weigh all the products that are placed in the content, and make it possible to display the purchase cost to the customer at any time. A third of Israelis have already experienced using a smart cart, and about 80% of them answered that they trust the automatic calculation that is carried out using the existing technology.

“Already in the near future, the expanding use of artificial intelligence will allow the marketing networks to deepen the consumer profile of each and every one of us,” explains Levinson, “they will be able to offer us personalized products while shopping and physically direct us to the product shelves. On the one hand, this may lead to control higher than the consumers, but on the other hand the power of the customers has also increased thanks to artificial intelligence. I believe that in a short time we will see more Israelis adopt artificial intelligence applications and software to compare prices and put together a more profitable and cheaper product basket. But at the same time, we must remember that not All audiences have access to or knowledge of the technological changes, therefore these changes should be made gradually and with corresponding protections for the entire population.”