When COVID-19 caused the physical world to shut down and forced all commerce to be conducted digitally, multinational auction house Sotheby’s saw a 600% increase in the value of online auctions, a “radical shift” in the company’s business, according to Josh Pullan, managing director of Sotheby’s global luxury division.
And through that digital shift, Sotheby’s realized a new way of reaching consumers — by selling directly to them through a “Buy Now” feature, launched just six months into the pandemic. Rather than waiting for an auction of items, people can go online and order hundreds of collectibles from Sotheby’s marketplace.
“It was really built to capture the demand for instant gratification,” Pullan said. “We saw that clients are and continue to be, like all of us, looking for fast service on their own timeline, and so this was built to meet that instant demand.”
Approximately three-quarters of customers who transact through Buy Now are new to Sotheby’s, he added, “and so it’s a great way to make the business a little bit more accessible but still retain the quality, authenticity and experience of purchasing from Sotheby’s.”
Pullan said Buy Now also builds a different kind of excitement than Sotheby’s can create with its auctions. “The exciting part of auction is that it’s an episodic business, it’s event-driven – and that’s fantastic for building excitement in a moment in time,” he explained. “Sometimes people don’t want to wait until the auction, and we want to be able to cater to that audience and meet their needs when they want us, not just when the auctions are scheduled.”
PYMNTS research, conducted in collaboration with Carat from Fiserv, found that 94% of consumers have made a purchase from an online marketplace in the past year, with nearly 23% doing so more often since the onset of the pandemic.
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The items sold through the Buy Now feature are sourced in similar ways to the merchandise that Sotheby’s sells at auction, including private individuals who are looking to consign items and collaborations with brands on specific products. Pullan said this also translates into the Sotheby’s Emporium, a retail store in New York City, and the company’s showrooms, “which are our physical presentations of the Buy Now opportunity.”
“But we obviously take that property and authenticate and examine it to make sure it meets our quality standards,” Pullan noted. “So, you can still have the confidence that the Sotheby’s authenticity guarantee is backing that item.”
Continued Innovation
Shortly before the onset of the pandemic, Sotheby’s was taken private by French businessman Patrick Drahi in a deal worth roughly $3.7 billion, which Pullan said has cultivated “a really entrepreneurial culture” that’s helped unlock opportunities such as Buy Now, as well as galleries and retail experiences in Palm Beach, Monaco and London.
“I think that’s really where you’re seeing people coming back together — they want experiences that are personalized,” he noted.
Sotheby’s is also investing more in digital, especially around the sale of non-fungible tokens (NFTs) and the use of cryptocurrency. Earlier this year, for example, Sotheby’s sold an NFT of the source code of the internet for $5.4 million, which Pullan said “was a very exciting moment.” The auction house also sold a diamond for over $12 million in cryptocurrency, and earlier this week launched another collection of about eight items that can all by paid for with crypto.
“There’s a reason we’ve been around for more than 275 years, and part of that is because we are always looking for the next market, the next opportunity and a new way of doing things,” Pullan added.