Christie’s much-publicised premier online auction came to a triumphant finish in August, bringing in an impressive $819,715.
The “Signature Cellars” auction of fine wine was the first exclusively online auction held by Christie’s, and after its success it looks as if the firm is planning more. “E-commerce is a key part of our growth strategy as a company, and we look forward to expanding this exciting new model even further this fall, as we add more collecting categories to our online-only auction calendar,” says CEO Steven P. Murphy.
According to Christie’s, 25% of registered buyers in the auction had never bought with the firm before, with many of these new participants being overseas bidders. It has long been accepted as an industry truth that people will never buy high-value items online. Yet Christie’s (and many other auctions) have proved this false – one case of Chateau Lafite-Rothschild alone sold for $42,000 to a collector in Asia. This auction seems to be a harbinger for a new era in the realm of high-end auctioning, but to what extent will Internet-exclusive auctions catch on?
Many auction houses (including Christie’s) have already embraced live auction webcasting – holding a live auction and broadcasting it for online bidders simultaneously. However, this method has many disadvantages. Rather than combining the best of both worlds, live Internet auctions can often end up combining some of the worst. For sellers, these auctions are an increased expense – causing them to pay for both the costs of a live auction and the costs of hosting an Internet auction. They completely miss out on the reduced transaction costs which are one of the main benefits of online auctions. Sellers also miss out on the wide bidding window of true online auctions.
Bidders often get a poor deal too – online bidders have to compete against better-informed live bidders who have had an opportunity to inspect the lot in person, and who are also fully aware of the atmosphere in the auction room, can collude with other bidders, etc.
In live auctions online bidders are forced to wait in front of their screens for the lot in which they are interested to come up (as the auctioneer goes one by one through a catalogue of hundreds of items). This is another significant nuisance for Internet bidders. The time lag between online and live bidding can also be problematic. Bidding in the auction room often progresses at a faster pace than the computer can display, so online bidders sometimes find themselves unable to keep up with and respond to live bidding in the auction. This can result in both lower prices and confused, disgruntled bidders.
Online-exclusive auctions offer an entirely different, more user-friendly system. Participants can bid on items in which they are interested as and when is convenient, costs are dramatically cut down and there are no time discrepancies. The wider bidding window can result in higher prices and allows for the maximum number of bidders to take part. And as they are quicker and cheaper to organise than live auctions, they can be held more frequently.
Online auctions are not perfect, and there is no replacement for the atmosphere of the auction room. However, it would be ill-advised for auctioneers to ignore the myriad benefits Internet sales present. We look forward to seeing how the online-only portion of Christie’s $100 million Warhol sale fares in February 2013…
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