Haggling is Hot Again: Bringing the Allure of Online Auctions to the Modern Retail Experience
With the rise of one-click, buy-it-now, one-stop shopping, retailers are caught up in a tug-of-war to capture the attention of consumers. They have to enable the on-the-go convenience that today’s on-demand world expects, and, at the same time, provide an engaging experience that builds brand loyalty and creates a strong connection with customers. Furthermore, with 86 percent of customers reporting they would pay more for a better customer experience, the de facto approach that’s been in place for decades — with businesses setting the terms, and customers going along for the ride — doesn’t cut it anymore. To outmuscle the competition as mobile storefronts continue to take hold, retailers have to raise the stakes to win shoppers.
One attention-grabbing strategy that’s making a comeback in modern retail is the allure of the online auction. At the turn of the 21st century, a live bidding boom, fueled by the likes of eBay, meant bartering was back and haggling was hot again, with consumers going, going, going … online in droves to score deals. In the U.S. alone, 35 million adults, roughly a third of the population, reported participating in an online auction. It wasn’t just buying and selling; it was e-commerce as entertainment, built on the thrill of the chase, the spark of competition, and the adrenaline rush of winning. Consumers could clamor to bid, outbid and rebid on objects ranging from the ordinary to the extraordinary, at the click of a button, allowing for a say in what they felt an item was worth.
Shoppers still want the excitement of that retail experience, and these days capturing it is no longer strictly for online auction platforms. Broadly available technology that enables on-the-go communications with customers is bringing the auction experience elsewhere, making routine retail transactions feel more like winner-takes-all bids. Of course, auction-specific sites and apps are also benefiting from this live bidding retail resurgence, with the global online auction market expected to expand at a compound annual growth rate of 7.2 percent by 2022.
Take Catawiki, for example. The online auction platform for curated collectibles, which hosts 14 million buyers and sellers each month on its site, is proof that convenient customer experiences don’t have to be boring. Instead of offering everyday items alongside truly exceptional pieces, Catawiki banks on unique, expert-vetted items that pique the interests of buyers — e.g., the world's most expensive Lego set, a lock of Napoleon's hair, and even a dinosaur skeleton. Unlike its competitors, Catawiki bans the “buy it now” button, choosing instead to level the playing field at the onset, with the starting bid for each and every item set at £1. It then leverages real-time mobile alerts via communications channels, so prospective buyers know when they’re being outbid for one-of-a-kind treasures, like the 1982 DeLorean they’ve been eyeing. This is true even if the person they’re bidding against is halfway across the world. Sending real-time mobile alerts has opened up a global marketplace for Catawiki, enabling bidding beyond borders and expanding its customer reach worldwide. There are also added benefits: SMS alerts protect against fraudulent users through two-factor authentication, and SMS notifications keep buyers and sellers alike updated once a payment has been made and a transaction is complete.
Keeping the essence of the live-bidding experience and focusing on niche items, while adding the on-the-go convenience their customers crave, is a formula that works. Since its founding, Catawiki’s popularity has exploded, with 45,000 percent revenue growth and counting.
The novelty of online auctions isn’t going, going, gone. With new technology providing customers with the information they need via the communications channels they prefer, a new era in modern retail is just beginning.
Roberto Marzo is head of strategy and business development at MessageBird, a cloud communications platform that connects enterprises to their global customers.
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