Written by Beulah | 3rd June 2020
Covid-19 forced established auction houses to postpone their live events and pivot to online auctions instead. Now, as European and Asian auction houses start reopening after months of lockdown, we’ve taken a look at the different practises being adopted and how innovation is, finally, driving the traditional auction house model.
The auction has proved remarkably resistant to change. In 500 BCE, the earliest known auctions were conducted by the Ancient Babylonians, auctioning off attractive people to potential spouses. While the nature of an auction has evolved from these dubious origins, not much else has changed and, until recently, many auction houses took their lead from practices established in the late-1500s. The much-heralded emergence of the online auction had relatively little impact on the market. Even Ebay, a tech giant, struggled to make online auctions as appealing as live auctions and fairly quickly introduced fixed-price sales.
By the time Catawiki was founded back in 2008, the online auction model was generally considered to be an interesting concept, but unlikely to attract high-value sales. Over the years, this supposition has been disproved many times and established auction houses like Christie’s, Sotheby’s, Bonhams and Philips started to pay more attention to their online presence. It took the covid-19 pandemic, however, for the auction industry to seriously embrace moving online.
Once it became clear that lockdown and social distancing measures were here to stay, auction houses started hunting around for alternative auction models. Some auctioneers found themselves conducting auctions in empty rooms, using Zoom and Google Hangouts to track bids. Others embraced the already popular private sale. These auctions are usually for extremely high-value items and only a limited number of specially selected people are permitted to attend.
Private sales have been a trend for a number of years; indeed, many auction houses make most of their profits from private sales and an exclusive event will always generate a return. Some sellers, however, have expressed dissatisfaction that their items weren’t being seen by a larger selection of buyers. There’s also the question of cost: organising a private sale of a rare Picasso sketch is one thing, but a mid-range print is unlikely to generate enough to cover the cost of the event.
Traditionally offline auction houses quickly realised that by relying on video auctions and private sales, the majority of their customers were left without the ability to access their auctions. As an established online auction site, Catawiki saw record-breaking numbers of bidders and buyers in the first few months of the lockdown. And it’s not just buyers. Sellers who had previously not sold in online auctions are now registering with us and our competitors report a similar shift.
Once auction houses do switch their focus to online auctions, some familiarity returns to the model. However, building trust in online auctions is a tricky and prolonged process. Established auction houses like Christies and Sothebys automatically lend their reputation for excellence and high-quality to all their auctions, live and online. And Oliver Barker, a senior director at Sothebys, was recently quoted as saying that he can foresee a future where the majority of the company’s auctions happen online, with only the best and most exclusive items meriting a live auction.
Another significant shift in the market is the kind of items that are going up for auction. Traditionally, very few online platforms have auctioned off experiences – in fact, Catawiki is one of the only established platforms to offer this option. Recently, however, a number of household names have ramped up their experience auctions with houses like Sotheby’s offering virtual experiences with celebrities.
Small, independent auction houses, meanwhile, are having to build an online presence and user trust from scratch. One advantage that small auction houses do have is the ability to respond in an agile way to their users’ needs. Providing buyers and sellers with personal attention and support when navigating the new landscape of online auctions helps build trust and accustoms users to a new format. Whether this agility will continue to benefit small auction houses in the long-term is a matter of conjecture. Whatever the future holds, it’s clear that, in the short term at least, auction houses are going to continue to scrabble to get online and online auctions will continue to dominate the market.
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