| BUSINESSWEEK ONLINE : DECEMBER 13, 1999 ISSUE | ||||||||
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| BUSINESS WEEK E.BIZ -- DATA MINE
Going, Going...Richer The well-heeled crowd at online auctions How much would you pay for a cow? Not the real-life, mooing sort. But a piece of art, craftily made of mirrors. A couple of hundred? A few thousand? Try $65,500. That's how much Stefan Hunter shelled out for Mirroriam, the reflector-skinned bovine up for sale in an Internet auction of 75 cows held by the City of Chicago. The cows, sculpted by local artists, were part of a campaign to attract tourists and raise money for charity. ''I said, 'Yeah, that's the cow that I want,''' recalls Hunter, a day trader from Key West, Fla., who was prepared to bid as much as $100,000. ''I went nuts.'' These days, quite a few Netizens are going bonkers over these nouveau bazaars. Online sales from auctions will total $3.3 billion this year, climbing to $8.5 billion by 2001, according to Forrester Research Inc. ''The market is enormous,'' says Rodrigo Sales, CEO of AuctionWatch.com, a Web database of auction services and advice. The market's swelling size ought to tempt any Web merchant. But it's the online auction's enviable demographics that are mouthwatering. Surveys of auction buyers by Harris Interactive Inc. squash the notion that cyberauctions are limited to consumers on a tight budget. A Harris Poll says 46% of online auction-goers have college or postgraduate degrees--higher than the 36% of general online users. And 54% come from households that make more than $50,000, surpassing the 39% of Netizens that pull down that income. No wonder the Web's auction heavyweights are cashing in. eBay Inc. has grown to $47 million in sales in just four years. Yahoo! Inc. has built a portfolio of 1 million auction listings. About 200 sites now offer price haggling, according to analysts. ''The idea of the customer setting the price is awesome,'' says Gregory K. Jones, CEO of uBid.com Inc., a business-to-consumer auction site with 792,000 registered users. The first cyberauctions were geared toward men since they were the Web's initial audience. Hip to a guy's hunter-like psyche, pioneering Onsale CEO Jerry Kaplan auctioned off electronic gear to better exploit the seek-and-acquire mentality of most men. ''We developed the auction because of its competitive, game-like, skill-oriented nature,'' Kaplan explains. But the auction community is packing less testosterone as it nears the turn of the century. In the past six months, the Harris survey found, the percentage of women buying at auction sites has jumped from 35% to 45%. Suddenly, the auctioneer's portfolio of goods needs to broaden. ''The challenge is to try to make the offering more diverse,'' says analyst Sue Rothberg of researcher Gomez Advisors. For example, it would be smart to pick items that appeal to women's tastes. Rothberg suggests symphony tickets rather than basketball tickets, furniture rather than tools. Information can also be a lure to women, who are more likely to browse before buying. Once there, the auction can snare 'em. Carole L. Hawley, 47, works 60-hour weeks as a Minneapolis school administrator. She was drawn to PotteryAuction.com by its books, articles, and the e-mail exchanged by its pottery fanatics. Then ''the auction part sort of sucked me in,'' she says. All kinds of Web sites can take advantage of this consumer fascination. Metromix.com, an online guide to Chicago entertainment, generally captures cyber surfers with restaurant reviews and such. But Product Manager Rebecca Brown saw a chance to grab more eyeballs by hosting the Web site for Chicago's cow auction. Revenue wasn't the goal since the auction receipts would go to charity. However, the auction brought 1.4 million page views to Metromix during a 21-day period, 60% more than the site usually attracts during a three-week stint. ''That was the payoff for us,'' says Brown. No matter what you're selling, you ought to consider weaving auctions into your Web site. After all, when cows come home at five figures, there's a movement afoot you don't want to miss. By ROGER O. CROCKETT, roger_crockett@ebiz.businessweek.com _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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