Friday, December 8, 2023

Success blooms from online auction

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During lockdown flower growers faced a grim future with the three weekly flower auctions halted and many outlets unable to open for sales. But a move online to virtual auctioning was a sector lifeline. Richard Rennie reports.
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Clive Jones | December 01, 2020 from GlobalHQ on Vimeo.

When New Zealand went into Level 4 lockdown it was not only fresh vegetables being given away to charity for lack of outlets to sell produce. News stories about growers who were handing out flowers to emergency staff and first responders, often finding grateful gifts of food and wine in return sitting alongside their empty “free flowers” buckets, were abound.

United Flower Growers (UFG) chief executive Tony Hayes says it was as much luck as good management the industry had been working on its online platform for three years prior to the covid lockdown.

“We envisaged the online platform as a natural enhancement that over time would sit to the side of our three weekly auctions in Auckland, Wellington and Christchurch, as an occasional option for our buyers to use,” Hayes said.

“What we did not know was it was to become a fundamental piece of functionality, an important part of what we needed to survive the lockdown.”

The three auction sites sell over 50 million stems and bouquets a year, and as an industry employs 10,000 people.

But lockdown saw the “smell, feel, touch” sensory experience of these regular auctions binned, and accelerated the move to perfect the platform’s virtual auctioning system. Today that system is accounting for 40% of those sales on any given day. 

Hayes is confident the virtual auction option has become firmly cemented in buyer habits, despite that loss of the early morning tactile experience of actual auction.

“Even at Level 3 we could not function through the auction system with numbers able to attend limited, and it was severely limited right down to Level 1,” he said.

In the process, the system has broadened the reach of each regional auction, with flower buyers from as far south as Dunedin able to participate remotely in the Auckland auction, for example, with next day delivery.

Because flower buying is such a sensory experience the platform has been built around real-time video feed of the flowers as they come up for auction. 

Buyers can place “future bids” across a range of flowers on offer before they come up, possibly focusing on a favoured grower as first option, with other bids elsewhere if larger volumes are required.

The auction runs on a Dutch auction system where the price counts down from a starting value to a point where buyers start to purchase. This ensures higher volumes of trading compared to a traditional upwardly bid auction.

Ironically, despite the world’s largest flower market being in Holland, the closest the Dutch get to such a system is using still photos provided by growers.

“But one of the most important things with this system is to give growers the assurance and confidence that what they are seeing is exactly what they are buying, that is what makes the real-time video so important,” he said.

Feedback from growers has been that a significant amount of time has been saved, particularly for provincial growers who were required to travel in to attend the crack of dawn auctions, and return home in time to get shops and outlets open.

Hayes says rural connectivity can be an issue when relying upon having a good video feed. Where possible UFG had worked with member businesses to ensure their in-business internet equipment was up to spec, while hoping internet providers will continue to work on rural upgrades.

He says the live auction system shares some parallels with some livestock sale systems that were also accelerated over lockdown. Both rely upon multiple small owner-operator buyers, now capable of being spread more widely around the country.

“The virtual auction would not have added extra revenue overall to the market, supply and demand determine that, but it has improved flexibility and convenience for everyone,” he said.

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