Source: MIL-OSI Submissions
Source: Impact PR
Millions of dollars worth of New Zealand flowers are being traded using a virtual auction platform which has seen a surge in buyer usage since lockdown.
The digital platform is being credited with supporting the resilience of the local flower industry – providing continuity during raised alert levels and helping connect growers and retailers when attendance at physical marketplaces was not possible.
The locally designed online auction took more than three years to build and beta test – and now allows retail buyers to enter an auction remotely, review and purchase their flowers through live streaming cameras – a first for the New Zealand market.
Flowers auctions in New Zealand are based on a Dutch auction or ‘clock auction’ model where the price counts down in intervals from a reserve or starting value to a price where a buyer is willing to purchase.
Operating in this way allows auctioneers to transact a significantly greater volume than a traditional auction which starts at a lower price and bids upwards.
The United Flower Growers (UFG) auctions in Auckland, Wellington and Christchurch make up one of the largest marketplaces for flowers traded in New Zealand with over 50 million stems and bouquets sold each year.
Buyer uptake of the virtual flower auction model has surged and now represents up to 40% of flowers sold by the company. All buyers who are new to the flower auction can only purchase from the remote auction digital platform.
Tony Hayes, CEO of UFG, says the accelerated move to a cloud auction was part of the industry’s forced adaptation in recent months.
“The virtual platform is designed to complement our existing in-house or physical auction model.
“We now have flower buyers from as far south as Dunedin able to participate remotely in our Auckland auction with next day delivery.
“The technology was already developed but until COVID, physical auctions were the traditional method of purchase and it had not been tested on the scale needed to accommodate all of our current customers online at one time.
“For this alternative platform to work, buyers need confidence we have the same range of products available, to trust in the quality of the product and to be comfortable that the experience of buying online is simple.
“This technology meets all of these needs and has several advantages including increased levels of convenience and flexibility as well as allowing buyers to achieve greater levels of efficiencies from their inventory purchasing,” he says.
Hayes says now local growers have increased access to a nationwide market for their product while for buyers it provides access to a wider range of flowers and the ability to inspect them.
“A single auction can transact over 180,000 stems – by maximising the throughput of our auctions we can optimise the returns to growers.
“The technology allows buyers to seamlessly transition between remote buying and attendance at physical auctions – which provides continuity for the market players during periods of uncertainty,” he says.
Hayes says live streaming flower auctions is not universally adopted even by major international auctions such as those in the Netherlands.
“The ability for buyers to see the flowers they are bidding on up close via live stream is unique in this market but is also not available in a number of major markets overseas. In Holland for example buyers see only a stock library image of the flower they are bidding on that provides no indication of the quality of the product,” he says.
Hayes says the company plans further investment in the virtual auction technology to expand the platform.