What can Online Only Auctions offer the Fine Art Market Place?
As increasingly more traditional auction houses explore the potential of accessing the global online market place to expand their business we thought it would be interesting to see what results one of the leading companies in this field has experienced to date.
Under the influence International CEO Steven P. Murphy, Christie’s has been the first of the top international auction houses to launch a timed or ‘online only’ auction program alongside their regular live auction schedule. As he stated “E-commerce is a key part of our growth strategy as a company.”
Christie's first online only sale took place in December 2011 as part of the series of auctions dedicated to the Collection of Elizabeth Taylor, and ran in parallel to their live auctions in New York. Focusing on the lower-tier items the two-week time-based auction was hugely successful with over $9.5 million in total sales and bidders from 25 countries around the world.
In August 2012 Christie’s held its first exclusively online sale of fine wine ‘Signature Cellars’, a logical move, as wine has proven to be the most popular category with online bidders. Unlike other exclusively online auctions the Signature Cellars auction was billed as being on a par with wine auctions previously held under traditional terms.
The Signature Cellars auction totalled £517,950, with 88% of lots sold. Over 440 registrants from around the world took part in the bidding process, with the top ten lots selling to either Asian or American private buyers.
More than 25% of registrants in the sale were “completely new to Christie’s”, according to Murphy.
This indicates, he said, “that wine collectors around the world appreciate… the accessibility of the online-only sales model.”
The growth of this sector for Christie’s has been significant. “We have moved from seven online [only] auctions in 2012 to 50 online [only] auctions in 2013, and we average between 45 per cent and 75 per cent of the successful buyers are individuals new to Christie’s,” Murphy says.
Christie’s forward thinking approach to bringing the traditional fine art auction business into the global online market has no doubt contributed to their current market leading position. As Murphy says “Christie’s has for a while, through last year and into this year, been in the lead, and we’ve earned that position through building accessibility to the burgeoning interest in art.”
The success of Christie’s online only auctions indicate a new era in the realm of high-end auctioneering.
iRostrum enables any auctioneer to quickly, efficiently and cost effectively set up their own online auction platform enabling them to immediately access this growing market.
How does an iRostrum Timed Auction Work?
Bidders taking part in an iRostrum auction register directly with the Auctioneer who has complete control over vetting and allowing access to their auctions.
Each lot in an auction has a set finishing time, with consecutive lots' closing times set 2 minutes apart. One of the significant features of iRostrum auctions is that when a bid is placed on a lot in the closing minutes the lot's end time will extend to ensure that all bidders have an opportunity to respond with counter bids so that items will always reach full market value. It avoids the practice of sniping, and brings it much closer to the actual auction processes whereby the lots will sell to the highest bidder, regardless of how long it takes to reach that point.
Bidders have the option of either placing incremental bids as determined by the auctioneer or they can register a maximum bid any time during the live bidding period. Bidders can be confident that by submitting a confidential maximum bid the system will then bid on their behalf in their absence to secure the lot at the lowest available price subject to any reserve or other bids, up to their maximum. Bidders receive immediate on screen feedback of their bid status and can also receive email notifications informing them if their bid is raised or they are outbid.
Benefits of Timed Auctions
The online auction format removes the physical limitations of traditional auctions such as geography, presence, time, space, and a small target audience.
The potential for reduced transaction costs for auctioneers is a significant benefit of online auctions. As online auctions are quicker and cheaper to organise than live auctions, they can also be held more frequently.
From a client’s perspective there are many advantages. The longer bidding period means that bidders can bid on items as and when is convenient to them, allowing the maximum number of bidders to take part in an auction which can result in higher prices as a result.
The anonymity of the online bidding process also offers a significant advantage as it effectively levels the playing field. There are no unfair advantages for some clients benefitting from physically attending an auction and getting a greater level of feedback of what is taking place in the room.
Transparency is fundamental to building trust and iRostrum’s online auction format provides detailed feedback on when lots have reached the reserve price and are selling. There is also a detailed bid history for each lot giving bidders complete confidence and clarity of the auction process.