Developing a New Way to Shop on 1stDibs with Auctions
with Jill Swanson
1stDibs became a public company in the summer of 2021 (Nasdaq: DIBS). It was an exciting time, but while it felt like the end of one long journey, we also knew it was the beginning of a new one. Now more than ever, identifying promising growth opportunities was critical.
As a product org, we began to evaluate strategic opportunities to drive incremental GMV for the company. One tactic that we identified was developing an auctions platform to generate demand, excitement, and tap into the thrill of bidding and winning at auction.
Why Auctions?
1stDibs hosts more than a million listings, and our average order value is in the thousands. Many of the purchases on our platform are highly-considered decisions that take days or weeks to decide.
While most people think of 1stDibs as a source for $10K sofas, we also have many lower-priced, easy-to-ship pieces perfect for a more impulsive format like auctions.
The auctions format is uniquely designed to create urgency and encourage buyer engagement and participation. Our hypothesis was that auctions would drive incremental orders and GMV and create a market-clearing price for our unique, often one-of-a-kind site inventory.
Building Auctions on 1stDibs
Entering into this project, we knew it was going to be complex. There were dozens of product, engineering, and business decisions to be made around what to build and how to build it. We’d have to create features for just about every part of our platform (including buyer, seller, and internal feature areas) as well as developing functionality to support the ability to bid on items, which represented a brand new transaction method on our platform. In short, this was a massive project, and we were challenged to complete it in 3 months.
The first thing we did was create a “tiger team” of engineers, designers, and cross-functional partners in supply, marketing, and seller partner managers. On the product side, we did competitive research, worked with our seller partner managers to conduct interviews with sellers, and began fleshing out requirements for MVP. We also started a weekly business meeting to review progress and discuss business decisions. Over the course of a few weeks we made dozens of decisions about the product and developed a plan and requirements. With product requirements, engineering was able to map out the new platform architecture and designers created buyer, seller, and internal user flows. We scoped out the work and in the beginning of August 2021 we began development.
Building the Auctions Experience
On the buyer side, we created a dedicated landing page, where all auction items were grouped. Auction items display their starting bid or current price, and shoppers can filter and sort by facets like no reserve items only, items ending soonest, and by price.
In addition, post-MVP, we created modules to allow our merchandizing team to highlight curated auction collections, implemented a personalization module, and added paths toward auction categories.
We also integrated auction items into the rest of the marketplace, so that discovery in the river of results would be possible.
The new auction format meant that we also needed to update our product details page to support a brand new bidding flow.
In order to be able to onboard auction supply, we built and integrated a set of features into our existing seller experience so that sellers could list auction items, manage their listings, and price according to recommendations.
And, finally, we developed a set of tools for internal teams to identify, review, and track auction orders and also review auction performance.
1stDibs Differentiators
While we built an auctions format similar to other online bidding platforms, auctions on 1stDibs are differentiated from other auction sites in a few important ways:
- We launched actions with no buyers premium, which is unusual and saves bidders upwards of 20% per transaction.
- Because we’ve built on top of the already robust 1stDibs platform, bidders have the advantage of full buyer protection, vetted sellers, facilitated shipping (where most auction houses leave it to the winner to arrange), and access to customer support.
- For our sellers, because auctions are all about urgency, auctions as a format creates a unique opportunity to sell more, more quickly, on a platform they trust and use already.
It Takes a Village
We launched auctions on schedule in November 2021 in a just 3 months. It felt miraculous, but was really due to ruthless prioritization, decision making, communication, and an all-star team of engineers, designers, and PMs (that’s us!).
For an initiative like this to succeed, the product and engineering workstream was just one of the critical pieces. We also needed to ensure that we’d have supply for launch and go-forward, and have a go-to-market and future-facing marketing strategy. In order to get supply for auctions, our seller partner manager and seller product marketing teams worked with sellers to get items from ~100 sellers who listed ~4000 items for launch. Our marketing team created a full go-to-market plan including bringing on Jonathan Adler to curate a collection to drive demand. And in order to measure success and identify key opportunities, our and Data Analytics teams built tracking, reporting, and conducted robust analysis of auctions bidding and sales trends.
Key Learnings
We’ve learned quite a bit in the last 12 months since launch, and use these learnings to inform our roadmap. For example, through both quantitative data and qualitative interviews, we know that auction participants enjoy the thrill of the auction format and the opportunity to get an amazing piece at a great value. One early key learning was that effective pricing is critical for auction success. We’ve learned that having a low starting price as it relates to the Buy It Now price will get bidders excited to participate and drive up bid participation. And having a reasonable, market-appropriate reserve price will lead to bidders reaching and ideally also exceeding that price. As a result of these learnings, we’ve created strong and explicit pricing recommendations for sellers when pricing their pieces for auction, and we’ve seen healthy adoption of those recommendations.
We’re also seeing promising trends around converting first-time buyers and driving incremental GMV. New buyer conversion is 2–3x higher for auction than the rest of the marketplace, representing a clear opportunity to turn non-buyers into first-time buyers via the auctions format.
What’s Next
As we approach our 1-year launch anniversary, we’ll continue to scale the platform for buyers, sellers, and internal users. We’re doing work to ensure pricing best practices, creating features to drive urgency, optimizing the listing experiences for sellers so they can list performant items to auction, and creating tooling for our merchandising team so they can efficiently manage marketing events around auction collections to drive demand.
Check out Auctions, and happy bidding!
