The Customer Perspective
Your lane customers show up to the sale, and they are welcomed with greetings from the staff, Early Bird Specials, free lunch, a chance to win prizes by participating in physical activities after the sale… It’s all part of the physical auction experience. The online customer logs in… no incentive to attend, no acknowledgment of their presence, the fear that floor bidders will be shown preference, and an added fee for the privilege of being able to purchase online. What are we saying to online customers?

This scenario is the condensed version all of the discouraging factors I have seen at various auctions throughout the country.  These practices were implemented through the direction of the simulcast vendor, the perception of the auctioneer, and despite the absence of research and development. Live Auction Broadcasts were sold to the auctions as an enhancement, not as a virtual expansion. Therefore the perception not taken into consideration was that of the online customer. This is probably due to the fact that, back then, online attendance was extremely low, and online options were limited.

Why Do We Tax the Online Customer?
I remember working at the auction, and having the simulcast provider sell us on the idea that we could make money by charging our online buyers an added fee for the convenience of shopping online. Looking back, I see that this was a tactic to counter our reaction to the investment we would be making in licensing the software. Now, compared to other platforms, it’s almost as if customers are being fined for attending the online event. Additionally, when a buyer makes the decision to purchase vehicles, he has to factor in that added cost, which reduces the motivation to buy. I think it’s safe to assume that motivated buyers lead to higher conversion rates. I am also going to assume that the revenue from the buy-fee would be more lucrative than an online tax.

The Digital Revolution
In the last issue, I distributed an article on digital disruption, and the impact it has had on Fortune 500 companies. The moral of the story was that managers who did not direct a healthy initiative towards virtual development were unable to compete with advancements in online automation that reduced operating costs and created greater efficiency for customers within their industry. They also went on to point out that the digital revolution is reaching all industries. Let’s look at the evidence in wholesale remarketing. Auctions are now beginning to compete with former consignors as new platforms are emerging, branding dedicated marketplaces for companies like GM, Hertz, and most recently, the dealerships. In order to counter this disruption, we need to focus on the advantages the online auction facility brings to the digital customer. We have to undo all of the wrongs, and eliminate anything that may discourage customers from online participation.

How To Counter The Attack 
AuctionVcommerce was developed for this exact purpose. So of course we’re going to recommend membership. In the midst of this digital revolution, it is imperative to align your organization with others  looking to preserve the future of the industry. You can continue to enhance your technology as part of the plan, but at the end of the day… Did you provide your online customers with a memorable experience? Were your online customers able to enjoy your virtual facility without unnecessary inconveniences? Most importantly… will your online customers be back?

Current Position
In our review of the auction data that we have accumulated over the last 5 months, we have made the following assessments: Across the board, the ratio between online attendance and online participation is extremely low. Increased attendance, for the most part, does not impact the percentage of participation as it should. Active bidders tend to be the same core group week to week with a small variation of random participants. Meanwhile, there also seems to be a dedicated group of observers, or at least, attendees with ongoing records of low to no participation.

What Now?
Collectively, we are developing the standards that will serve to transition the traditional auction model to the virtual space. Our goal is to open the discussion with Auction Owners, Officers, General Managers, and anyone else involved in the decision making process. You have read my personal point of view on auction fees, and online incentives. I would like to know where you stand on both of these issues. Please respond with answers to the following:

  1. What is your point of view with regard to online fees?
  2. What incentives do you currently provide, or would you be willing to provide to online customers?

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