Markets

Internet revolution drives growth in AuctionsPlus + VIDEO

Jon Condon, 17/07/2012

 

AuctionsPlus general manager Gary DickTwenty five years after its launch as Computer Aided Livestock Marketing, the industry’s on-line cattle marketing tool, AuctionsPlus is riding the boom in internet adoption to record some remarkable growth figures.

For the 2009-10 year Auctions Plus trade grew 15 percent for cattle from a year earlier, before expanding by further 45pc for the fiscal year just ended. This year, cattle numbers are already up a further 15pc.  

Just a week ago, AuctionsPlus marked its first quarter century since establishment as the industry’s electronic marketing tool, with a gathering of former and current personnel.

“Back in the early days when the business was losing $3 million a year, everybody kept saying, it’s a good idea, but it’s ahead of its time,” AuctionsPlus general manager Gary Dick told last week’s RMA independent agents’ network conference on the Gold Coast.

“Well, if that was true, I would suggest that the future has now arrived,” he said.

“The change that is happening right across the rural industry as a result of the internet is phenomenal, and it is one of the big influences over the progress in AuctionsPlus,” Mr Dick said. 

The adoption, firstly of digital photographs, and more recently of video, had been one of the big drivers of recent expansion in AuctionsPlus trade.

“Now a buyer can refer to the images, as well as the written parts of the assessment, and make a more confident judgement of the animals’ value, and that’s being reflected in the growth in support.”

Despite the dramatic increases in both cattle and sheep turnover, the ‘claims’ rate against listings had remained static, and tended to relate to minor issues like delivery of the stock, rather than mis-description or physical faults, for example.

“Video and digital photos have provided buyers with a clearer picture of what’s being offered,” Mr Dick said.  

He said while the quality of still and video images provided was at times variable, it was improving all the time through repeat use and training, and the new AuctionsPlus website was now a lot more user-friendly in the upload of images.

When used well, both still photos and videos greatly enhanced the process of description of each lot, as illustrated by the example YouTube video below, produced by Ben Hiscox from Bob Jamieson Agencies, Inverell, for cattle offered in the 29 June auction.  (Article continues below video)

Click on above image to view Ben Hiscox's AuctionsPlus preview video

“Most of the progressive AuctionsPlus users are now supplying video, as well as still images,” Mr Dick said. “Some agents actually interview their client, as well, covering issues like genetics and animal health treatments used. It becomes a mini documentary.”

Since the video option was first explored a little over 12 months ago, 10-15pc of listings now included some footage, and the figure was growing rapidly.

“The original process was a lot more laborious, with footage having to be sent to us on a memory stick for download. It is now far, far easier, uploaded straight to YouTube” he said.

Some footage was shot on I-phones, with mixed success, but most agents also had access to reasonable, inexpensive video cameras.

Mr Dick told the RMA conference that AuctionsPlus currently had 47,500 stakeholders registered to use the system, with 5500 people receiving the sale catalogue by email each Wednesday night. In addition, an average 380 catalogues are extracted from the system each week by users.

Using last week’s cattle auction catalogue as an example, 3100 people went in and had a look at the listings, of which 470 were registered users. The AuctionsPlus website now attracts about 28,000 unique browsers each month.

Mr Dick said one of the important recent developments was that 80 percent of AuctionsPlus users now are producers themselves, rather than agents, with their own user code and password. That figure had gone from 50pc just two or three years ago. By the end of this year, it could reach 85pc, with more than half of those having a nominated agent.

“We think that growth is largely as a result of greater competency in using the internet and computers generally, particularly among older producers. It’s not uncommon now to see a 75-year-old farmer whip out his I-pad and look up some results,” Mr Dick said.

“There has also been a dramatic change in the attitude of stock agents – the numbers that are tech-savvy is now far higher than it was even five years ago. The technology has also become a lot easier to use. In 1987 you needed to be a Qantas pilot to access CALM, but today, it’s easily accessible for anybody.”

One of the consequences of greater description and use of images was that animal welfare groups often monitored the AuctionsPlus catalogue, and at times made contact with claims over cattle or sheep being offered for sale that might be in their last trimester of pregnancy, for example.

“We have not had those calls often, because we are proactive ourselves, and at times we contact AuctionsPlus users about the stage of pregnancy of sale animals,” he said.

“It’s important, and it’s only going to get more important – the welfare movement is watching everything we do, as an industry.”

Providing a break-up of AuctionsPlus users, Elders and Landmark each currently account for about 100,000 stock units (10 sheep = 1 beast) per year, with Ruralco about half that, and independent agents close to 200,000 units.

Independent agents were very important to the overall AuctionsPlus business, accounting for about the same turnover as Elders and Landmark combined, Mr Dick said.

So where does the current AuctionsPlus business come from? In the cattle ‘pie’, for the financial year just ended, NSW remains the dominant source, accounting for 48pc of business; Queensland 37pc; Victoria 8pc; and SA and WA 3pc each.

Mr Dick said the recent revamp of the AuctionsPlus website included a long list of user-friendly refinements. Up to 80 lots are now allocated to a page, up from 40 lots previously, and up to 2000 users can connect to a sale. Previously the limit was 200 users.

During question-time he said an AuctionsPlus I-phone/smartphone ‘App’ was currently under development, and a subscription service for I-phones, I-pads and Android smart phones should be available within three months. A full operational service was likely within 12 months.

 

Growth in slaughter stock?

Asked about the prospects for on-line slaughter stock sales as well as store stock, Mr Dick said when CALM was launched in 1987, it was targeted specifically at the slaughter cattle market, using the national AusMeat language.

“Interestingly enough, the top agent by turnover for Auctions Plus over the last 12 months has been Robertsons in Hobart, and they already sell a lot of slaughter sheep – lambs and mutton – to processors on the mainland,” he said.

“There is another user in Western Australia near Pemberton who lists slaughter cattle every week, and sells consistently to Harvey Beef, Goodchild’s and Western Meat Packers.”

“So AuctionsPlus can work for slaughter cattle,” he said. “Previously, processors had to rely strictly on a written description of the stock, but photographs, videos, and the use of scanners means that it is something that again needs to be looked at more seriously.”

“We haven’t walked away from it, but there are probably half has many processors involved in the industry today as there was in 1987, and that may have been a contributing factor. It just needs the motivation and opportunity from both agents and processors to use it. But if we can come up with a good system that processors like and which fits well with their operation, then why not?”   

 

Other commodities

Mr Dick said the AuctionsPlus platform had expanded beyond cattle and sheep sales in recent years, with on-line wool sales started last year following the purchase of the Wool Trade business in 2009. While volumes were still low, the good part was that eight or nine of the top buyers in the physical auction rooms were using the system.

Grain, water and machinery sales had also been conducted on the AuctionsPlus platform.

Stock agents attending Friday’s RMA conference also spent a session looking at the internet and social media during an effective marketing and promotion tool for their businesses.

AuctionsPlus for the past 13 years has been owned by the three major pastoral houses – Elders Landmark and Ruralco – after going within 12 months of closing its doors under industry ownership in the early 1990s.

One of the most important aspects of the agreement to sell the business to the agency stakeholders was that it would always be open for use by all agents and individuals.

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