Hareidi Buying Block
Hat Tip: Ari Kingsberg and Bob Miller
Like I have said in the past, I shy away from discussing Israeli Orthonomics, or Hareidinomics as the case might be, because I am wholly unfamiliar with the people and structure of the communities therein. But that doesn't mean that articles about such do not interest me. They most certainly do, especially as the Orthonomics of Israel and America intertwine.
Per this JPost article, Chareidi Yeshiva schools and Bais Yaakov schools are teaming up to form a consumer buying bloc, eliminate the middle man, and force down prices by up to 30%. This initiative is not a religious one, but a purely practical one.
The idea of a buying bloc would seem to be a very good idea, but I have to wonder if the idea will translate into a succesful model. Initiazling the idea will require a tremndous investment of man-power, business acumen, patience, and (yes) money (!). Seeing the return on investment, if they plan ever gets off the ground cannot and will not happen overnight and that could detract from the great amounts of an investment of time and money that will be required.
I will be watching and I think the entire US community should be watching too as forming buying blocs for American Day Schools and Yeshivot is an idea that has been floated and could be piloted.
But in the meantime, I have a few thoughts that I'd like to discuss. The first of which is the mission statement. It seems that the initiator of the plan has a lofty goal, but perhaps it is far too broad. It seems that the goal is not only to benefit the hareidi educational system, but is to benefit the average hareidi household (see mention of sodas and diapers). To keep the initial momentum going, I believe one must be able to demonstrate that the objectives are being achieved or tangible progress is being made to achieve those objectives.
Secondly, I have to wonder if any marketing research has been performed. While the community is sizable, is the buying power as sizeable? El Al was sited as an example of a success. But plane tickets and diapers or soft drinks are far different products (btw-would it really be a good idea to make liquid sugar an even less expensive item?). Judging from the increasing number of solicitations that I receive, the severity of the solicitations, the perceived desperation, etc, I have to wonder if the buying bloc is as significant as the leaders would believe.
Lastly, what really caught my eye was this paragraph about Israeli demographics:
"Every fourth baby born in Israel is haredi and so is 52% of the Jewish population under 18 year old."
I'm scratching my head trying to figure out exactly how large the hareidi population is relative to the entire population (See: Cross-Currents for more scratching) or even if these statistics are even accurate. But one can't help but wonder such demographics mean for the Israeli hareidi community as a whole and the American Orthodox community.
Your thoughts please.
14 comments:
I pretty much feel the same way you do in the post, and I'd be curious to see how successful it could be.
I also found the last line very interesting: Litzman's initiative is the first consumer bloc to be based solely on materialistic motives without any pretense to use buying power to increase adherence to religious strictures.
My husband and I were also wondering about those numbers. I don't know what their source is.
A few years ago they tried to get a bloc together to pressure companies to lower prices on . . . baby formula. I'm pretty sure it didn't get very far.
thanks for putting the article into perspective (and for the link)
feel better
What do such demographics mean for Israel as a whole? Look at Bnei Brak, which is essentially bankrupt, because there is not enough tax revenue: the community does not have enough income to bring in that revenue. Imagine the impact of 50% of a Jewish population such as this on the entire country. What happens to the welfare system when fewer and fewer people pay to support that system? And this does not touch on the army issue at all.
They also have a plan to purchase life insurance somehow too.
Ezzie-I also noted that paragraph. I consider the bloc to be a sign that the community is desperate.
MiI-Thanks for the info. I can't imagine this plan going anywhere either.
Ari-Thank you.
Anon in Teaneck-There is no polite way to put down thoughts about the demographics. But you just can't have 1/2 of the population with deferments, 1/2 of the population without basic general studies and basic vocational skills, and 1/2 of the population that expects to be a Yissachar.
Jacob Da Jew-Thanks for reminding me of that. The life insurance plan is a terrible idea. Such a plan will NOT provide the money needed. The pooled risk is far too high. The model is open to fraud and would be bankrupt if only 3 or 4 fathers passed away. I should point out this story too.
Traditional religious Jews have been successful merchants for thousands of years. For most of that time, no business schools or MBA degrees existed whatsoever.
So I have no doubt that this co-op venture will work with HaShem's help if enough of the people with business aptitude get enough of the right practical advice, put enough time into it, and work as a team.
Re: the life insurance issue, this was already exposed as a mistake
http://www.cross-currents.com/archives/2007/02/14/look-before-you-leap/
(and I can't help but give a plug to my own spin on the issue here http://divreichaim.blogspot.com/2007/02/does-being-expert-in-torah-make-one.html)
...because I am wholly unfamiliar with the people and structure of the communities therein. But that doesn't mean that articles about such do not interest me.
So we really are all lawyers, bankers, and such.
I would guess that this Haredi buying block will fail, because as pointed out in the article, it's really not a monolithic community with everyone buying exactly the same thing. Sure, every family in certain neighborhoods may have exactly the same Maclaren stroller, but there are many different brands of mehadrin sugar water, childrens' clothing, and other regular purchases.
And was the Haredi El-Al boycott really a success? My impression of the agreement is that El-Al may continue to occasionally fly passengers on Shabbat as long as they use a different brand name. Not much mitigation of hillul Shabbat there.
On the other hand, why would a buying block be so difficult for schools to organize? It shouldn't involve more than the participating schools noting similar items and calling Crayola or Scholastic or whomever.
Bob Miller-I hope that the plan works out. We all know that reporting can be faulty and bias. But, as it stands now, the "plan" failed to capture my imagination and interest.
I assume that those behind the plan will need money to get started. Would you invest in this plan as presented?
I would hesitate because I am not even sure what the plan is. Is it to benefit the household or the education sector? The coalition is made up of those from the education sector, but talk of diapers makes me wonder if the institutions would stay interested if they do not see benefit themselves. And if the consumer does not see a benefit, are they going to stay organized for the sake of the plan?
There is so much commentary to give. I wish the community hatzlacha rabba in their efforts.
Chaim B-Thanks for the link to your post. I agree with your thoughts. I too am reminded of the life insurance "plan" which had more holes than I care to count. This doesn't seem as full of holes, but when you hold a press conference to announce your big plan, you need to capture the interest, investment, and imagination of the people. I can't imagine how a plan that is so broad will retain the interest of those behind it, especially if the ROI will not come for a long period of time.
Shmilda-A buying bloc that is more limited(like you mentioned), would be a far better initial plan imo. I think that the institutions need to see success to stay interested and spreading oneself too thin is problematic.
What I see now is more a desire than a plan. So it's premature to say anything about "the" plan.
The official creation of the consumer bloc was announced Sunday at a conference at Airport City near Ben-Gurion Airport.
Maybe I'm imagining a conference where a plan was announced and goals were outlined, and instead I should be imaging a brainstorming session?
If there was only a brainstorming session and no fanfare, I wouldn't have made any comments about the article.
Bob, what is your impression?
We'll see in time what this announcement was meant to accomplish. I'm inclined to believe it was more of a coming attraction announcement than anything else.
It could be useful if it creates feedback about the size and nature of the target market and/or if it motivates business professionals to pitch in to perfect and execute a plan.
Often, new commercial products are pitched this way before they're really ready to make, sell, and ship.
I said this before, but it's worth repeating here: that statistic is completely off. If you think about it, there's no way it could be correct. 25% of babies born are hareidi, but 52% of children? No. 25% of babies is pushing it, and it's probably around 15% of children tops.
As for 50% of the population hareidi, that's a big fear of a lot of Israelis. It's one of the main reasons the government imported around half a million non-Jewish Russians--they'll work, vote for secular parties, and generally push the country in the other (non-hareidi) direction.
Personally, I'm not worried. If 50% of the country were ever hareidi, and presumably another large percent national-religious or traditional-religious, I'm guessing a lot of people would feel differently about joining the army, working, etc. If the army was religious, more religious people would join, they wouldn't have to avoid school and work for several years (which is now necessary in order to stay out of the army), they could learn a profession more easily, etc. Basically, the system now would be forced to change, and people would feel more comfortable joining Israeli society b/c Israeli society would be religious.
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