NAA State of the Auction Industry Amid COVID-19 Week 3

National Auctioneers Association

State of the Auction Industry Amid COVID-19

April 8, 2020

On March 25, 2020, we released the first State of the Auction Industry Amid COVID-19 report, showing data on effects of the COVID-19 pandemic, including the unprecedented number of event cancellations.

Surveys are continually improved to gain the most accurate, relevant data for the industry.

Since the first report, we have seen a 13% increase in respondents who were not NAA members, but still in the auction industry. 88% of respondents now reported they are following CDC guidelines, up 7% from last week.

Respondents work with a variety of assets, the top three being estate/personal property, antiques/collectibles, and residential real estate. 25% of respondents have been in the auction industry 10 years or less. Auctioneers continue to be very active in every market, from rural to mid-sized city, with large cities not far behind.

An impressive 80% of respondents earn income from multiple sources, including real estate, contracting, personal/commercial assets, marketing and management, and benefits. While personal and commercial assets rank highest for primary income, real estate ranks first among secondary incomes.

It is safe to say in week three of our survey, the effects of COVID-19 are felt throughout most of the auction industry. Auctioneers continue to adapt, including exploring government stimulus options, which we will report on next week.

Contact Hannes Combest, FASAE, CAE, Chief Executive Officer hcombest@auctioneers.org Media Inquiries Erin Shipps, Director of Marketing & Communications eshipps@auctioneers.org

Please contact us if you did not participate in this survey and wish to be a part of future surveys.

Methodology The National Auctioneers Association sent a 26question survey built in Survey Monkey via email to 7,343 member and non-member contacts. The survey was also distributed through a targeted Facebook ad.

The association received 326 responses. Raw data was collected and tabulated using Survey Monkey.

Compliance 12%

88%

Yes

Mostly

<1% reported â&#x20AC;&#x153;noâ&#x20AC;?

Are you following CDC guidelines?

nt iq ue s an d

A

C

ol le ut ct o/ ib M le ot Fu s o nd rc ra yc i si le ng s /C ha Re ri t B cr an y ea kr up ti o tc na Bu y l Ve sin Es es hi ta cl sL te es iq /P u er id so at He Fa na io rm av n l Pr /R y o Eq an pe ui rty pm ch/ Liv e In nt es du /C to st ck on ria s l /M tru ct an Re io uf G st n a au ov c r er tu n m ant ri n g Eq en ui tS pm ur pl en In us t te /S ll e ei ct zu ua re s lP ro Fin C pe om e rty A m rt/ er Je ci w Re al el Re sid ry a en lE ti a sta lR te ea La lE nd st at Re e al Es ta te

A

# of respondents

NAA Member Yes

Respondent Statistics 5% more nonNAA members than April 1 survey No

19%

81%

Which assets do you market?

200

150

100

50

0

1-5

Years

How long have you been in the auction industry?

6-10

11-20

21-30

30+

0

20

40

60

80

# of respondents

100

120

What type of market(s) are you typically operating in?

Rural

Small Town

Small City

Mid-sized City

Large City

0

40

80

120

# of respondents

160

Marketing & Management

Benefits

Real Estate Personal & Commercial Assets

Marketing & Management

What is your primary source of income?

Contract

Benefits

Real Estate

What is your secondary source of income? *20% of respondents chose N/A or skipped

Personal & Commercial Assets Contract

What percentage of your sellers or clients are canceling their summer auctions or events?

Cancellations Decision to Postpone

40

% of respondents

30 Client 20

10

Both

0 0%

<10%

10-49%

50-79%

80-99%

100%

More respondents are reporting an increase in 50% or more of their summer auctions being canceled.

Auctioneer

What are your sellers or clients asking regarding COVID-19 and the impact to their auction or event?

73% Should I reschedule and when?

72% Will this affect buying, prices and values?

58% Will this affect turnout, participation?

49% Will online only auctions do as well as live?

41% When will you sell my assets/hold live events/galas, how long will the holdout be?

40% Will the government allow us to have the auction? What liabilities exist?

39% How are other sales going?

37% Are you still accepting consignments?

26% How do we move to virtual/online?

23% How safe is it, what steps are being taken to ensure safety?

What are you doing to give sellers confidence to move forward with an auction?

74% Keeping in contact, following up, informing 62% Giving reasonable timeframes/realistic alternatives/flexibility in rescheduling 61% Positive reinforcement â&#x20AC;&#x201C; we will get through this; people will be ready to get out again 54% Providing guidance â&#x20AC;&#x201C; scheduling, processes, sanitary measures 44% Discussing pros/cons of postponing vs. canceling 44% Assuring we have tools/knowledge to conduct online auctions 31% Counseling on benefits/success of virtual live/online only auctions 28% Providing more options for previews and pickups to reduce group gatherings, sanitary cleanliness, delivery service options 28% Encouraging back-up plans 24% Showing recent auction results/sales data 14% Using SignUp Genius for scheduling previews and pick ups

March 25 April 1

Buyers & Donors

April 8

50

How are most of your buyers or donors behaving in your market?

% of respondents

40

30

As buyers, donors and auctioneers are settling into government regulations, the fear response has continued to stay at a lower level, and the attitude of adaptation and understanding remain high.

20

10

ns

l to ue D ed

ec l in

Re gu la ti o

a Sa m e

Ea rl y

sU su a

Te ll

d rie To o

W or

Fr us tra te d

to D

A

da pt in g/ U

nd er st an d

in g

0

How has your live auction attendance been affected?

March 25

50

April 1 April 8

% of respondents

40

30

20

10

0 Lower

All Canceled

Mostly Canceled

Transitioned to Online

Normal

Increased

N/A

Total live auction cancellations continued to rise this week, while those reporting normal attendance in the past have seen it dwindle to only 1% of respondents.

Challenges with Preview/Load out Scheduling Canceled/Postponed

How has your online bidding participation been affected?

Decreased Results

Decreased Traffic

Increased Results

Increased Traffic

Just Started Online

No Significant Effect

N/A Auctioneers reported online traffic saw a 4% increase in the past week, while challenges and cancellations continue to hinder the auction industry. The number of respondents starting online has risen 10% in the past week.

0

10

20

30

40

% of respondents March 25

April 1

April 8

March 25

April 1

April 8

In Person Radio

How are you communicating to your community regarding auction or event cancellations?

Signs Newspaper Direct Mail Website/App Phone Text Social Media Email 0

20

40

60

% of respondents

80

What vulnerabilities are you currently seeing in your market?

Vulnerabilities % of respondents

80 60 40 20

N

on e

e

Bu sin es

ll e rI

s/ In

ns e

co m

cu ri t y

l

Lo ss

of

Se

N

on -e

ss e

nt ia

un ds ss et sa re

m y on o Ec n

Bu ye rF A

ar o Fe

fF a

ce -

to -

Fa ce

fU nk no w

In te ra ct io ns

e O nl in to

M ov in g ar o Fe

C

an ce

ll a tio ns /P os

tp on em en ts

0

March 25

April 1

April 8

As fear of face-to-face interactions has decreased with shelter-in-place orders, vulnerabilities have shifted to the fear of the unknown economy, seller insecurities, loss of business, and not being able to sell assets listed as â&#x20AC;&#x153;non-essential.â&#x20AC;?

What new opportunities are you seeing as a result of COVID-19?

Opportunities

March 25

April 1

April 8

40 30 20 10

ot hi ng N

ng es

A

ss et

C

ha

pp ra i sa ls

s C

ew N

on su lti ng /A

Bu ye r

et s As s Fu tu re

M or e

pm en t el o ev

Bi z

D

In ve st m en ts M ar ke tin g/

N

ew

Se

lle r

s/ Ex pa nd

N

in g

ew

Te c

M ar ke t

h

0 O nl in e

% of respondents

50

Auctioneers continue to see value in online and new technology, as well as most other opportunities. 7% more auctioneers this week are considering asset changes and consulting during this difficult time.

How are you or the company you work for responding financially for the business?

40

20

e

A

dv er ti

si n g

M or

su al sa sU

tu ni tie s

fo rO

W a

tc hi ng

Bu sin es

in g Ho ld

pp or

Pa tte rn

ou rs H nd ff a

St a

Ex pe ns es Re du ci ng

M in im i zi ng

/H al tin g

In ve st in g

on se rv

in g

0

C

% of respondents

60

March 25

April 1

More than half of auctioneers reported that they are conserving and minimizing for their businesses.

However, 45% remain optimistic and are watching for opportunities.

April 8

We've Gone Virtual

Are real estate closings currently being affected as a result of COVID-19?

Unknown

Nothing Yet

Slowed by Other Industries

16% more auctioneers are seeing real estate closings affected this week than two weeks ago, and a good number expect changes to come. In the past three weeks, the number of real estate auctioneers going virtual has increased 7%.

Expect Changes

Definitely Affected

N/A March 25 April 1 April 8

0

5

10 15 20 25 30 35

% of respondents

Bank Response 50 45 40

% of respondents

How are you seeing banks respond to the COVID-19 crisis?

35 30 25 20 15 10 5 0 25-Mar

1-Apr Status Quo

Hesitant to Lend

Unknown

Minor Changes

8-Apr Major Changes

Banks continue to impose minor changes to their business, as major changes are increasing and banks remain consistently somewhat hesitant to lend.

What are your non-profit clients doing because of event cancellations?

Non-Profit Clients 50 March 25

April 1

April 8

% of respondents

40

30

20

10

0 Still Evaluating

Exploring Options

Rescheduling

Canceling

Online Auctions

Other Fundraising Efforts

Unknown

N/A

Since March 25, other fundraising methods for non-profit clients have seen an 11% jump. And, 24% of respondents now report their clients are open to exploring options, whereas two weeks ago, very few were. Non-profits are, however, continuing to cancel and reschedule the majority of their events.

Exploring Options

What other fundraising methods are you and/or your nonprofit clients currently utilizing?

None/Waiting

Direct Donation Campaigns

Telethon

Online/Virtual

N/A

0

10

20

30

40

% of respondents As online and virtual events remain strong alternative methods for fundraising, direct donation campaigns also saw an 11% jump in the past week.

March 25

April 1

April 8

50

Sponsors

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