The Local Auction Resurgence
On making “local” a strength, not a weakness
As a brick-and-mortar business, which is a better use of advertising dollars: a paid email campaign to targeted buyers, or a direct mailer to your local area? While the cost of the email is usually a better value, the direct mailer is tangible, almost guaranteeing that your message is received, whether welcomed or not. Both methods have their benefits in acquiring new customers, and ultimately, a case can be made for either, depending on which demographic you would rather capture: one in your vicinity, or one that aligns with your target market.
But are we asking the right question? Do all businesses benefit from trying to acquire new customers, or would it be better to build a better relationship with the ones they already have? If you look at the efficacy of advertising on Google, the campaigns with the highest success are “remarketing” campaigns, whose name says everything: online advertisements work best when you can target people who have already been exposed to your brand, or one like it. In that vein, the more you can do to retain those customers who express interest in your brand or product, the better your business will be.
The concept of loyalty marketing usually involves incentivizing your previous customers to make further purchases either through a great deal or some sort of other special treatment, e.g. rewards points that can be cashed in for money back, exclusive access to deals or limited edition products, or even tiered services that other users can’t get. As the Sapphire card from Chase shows, a lucrative loyalty program can galvanize people to engage with a brand in ways normal marketing cannot.
Loyalty, however, works best when you’re a big player: unless you have multiple storefronts and a small number of SKUs, finding ways to bring customers back with frequency can be difficult, especially if there are more convenient or inexpensive options available. This can make loyalty programs difficult to execute for a local business, leaving them with a need to act like a larger company without possessing the inherent advantages.
How, then, can a loyalty program apply to the secondary arts and antiques market, where customer acquisition rests on finding a willing and well-heeled buyer capable of expressing the desire and meeting the purchase price of the unique items they sell?
In many ways, this article highlights the vast changes that have changed the fundamental underpinnings of the industry since its digitization. For dealers and auctioneers, business has always been based on relationships: at every point along an item’s sale path, a personal connection can be traced, from the estate appraisers to the longstanding clients. Except, now, a key portion of that logic has been removed at the end of the chain: with the internet providing the possibility of a buyer with deeper pockets just waiting to be discovered, a higher realized price always seems possible. In simplified logic, your best buyer is just a targeted email campaign away.
Searching for a higher price can also add issues in other aspects of the process. For instance, a buyer farther afield might be willing to pay 20% more for an item at auction because of a lack of local supply, or an increased local demand. However, the cost of fulfilling that transaction can add up: the time spent coordinating shipping for a commode across state lines, or arranging the logistics of insurance for a high-value item.
Yet the way dealers and auctioneers sell items hasn’t changed, and for good reason: those items come from estates, or through a long chain of relationships groomed and conditioned to facilitate their sale. Often, those estates are secured through the promise of gaining higher returns for the client than what a liquidator or a local rival could offer. This process usually leads to estate sales masquerading as auctions, replacing the traditional curatorial expertise of the auctioneer with the need to maximize profits.
But is this healthy for the industry? Does selling everything at auction in the same fashion lead to higher prices for clients and sellers, and satisfy consumer demand?
I frequently mention the diffusion of intent when I speak to my clients about how internet sales and marketing can work for them. In short, what you gain from exposing your sale to the world at large can also be lost from increased competition and a lack of connection or urgency to the seller through the sales process. I believe this is at the core of the industry’s downturn, and raises a further question: are people losing interest in antiques and heritage pieces because their tastes have changed, or have those been systematically removed from the chain of consumption through a need to find a specialized buyer with a little more desire to purchase?
We sometime forget the psychological aspect of discovery for hunters and gatherers…the internet is great at making everything efficient, but we humans like the discovery and learning process — on our own. This is a large part of why the Antiques Roadshow is still popular, and estate sales and flea markets are destinations for the average American. The auction, however, has stagnated, even with the rise of new ways to connect with new clients around the globe. Why is that?
Every auctioneer remembers the good old days, when the business was thriving. Back when auctions weren’t posted online, and you had to physically attend hours of continuous sales in order to bid on an item you wanted, there was more of a sense of community: the staff knew everyone in town’s name, and a sort of cultural fabric emerged from the process. The tag sale can replicate some of these aspects, but it is always a last resort for a seller intent on maximizing profits, and certainly not a model to be learned from.
To that end, there’s a disconnect in the process we take to reach people today. Even with the broad power to reach people regardless of location, we should remember that those who care enough to remember your name are the ones who you can touch, both physically and metaphorically. By finding ways to rekindle that local interest from the community you serve, you can help to crystallize that relationship, and ultimately lead to a higher level of engagement with those around you. While this may not immediately lead to higher sales, it will help to foster the relationships that matter in the long run.
Technology is a tool: it can bring us closer together or drive us apart depending on the usage. You can remove yourself from Thanksgiving dinner with family as easily as you can connect with an old friend across the world: what matters is that we make meaningful connections within our shared parameters. And, to that end, perhaps it’s time to stop searching for the promise of more abroad when the solution is right at your table.