Auction Industry Report - May 6, 2020

National Auctioneers Association

State of the Auction Industry Amid COVID-19

May 6, 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.

As states begin to consider re-opening, auction professionals are entering a new unknown world of limitations and regulations that continue to alter the way they do business. We added a question about whether a respondent's state was planning to lift regulations in the next week—62% responded yes.

Anticipating this, we asked respondents to tell us what preparations they were making to re-open, of which there are many. 42% of respondents see these restrictions as a vulnerability.

Nearly 50% of respondents now say they will not participate in government assistance programs.

In this report, we were also able to get our first accurate look at affected asset values with the estate and antique market most negatively affected.

Our next report will be released on June 3, 2020.

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 29question survey built in Survey Monkey via email to 7,336 member and non-member contacts. The survey was also distributed through a targeted Facebook ad.

The association received 175 responses. Raw data was collected and tabulated using Survey Monkey.

Compliance

Job Status

19% 23%

77%

Yes

Mostly

81%

Full-time

Part-time

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

Are you following CDC guidelines?

Are you a full-time auctioneer?

<1

1-5

6-10

Years

How long have you been in the auction industry?

11-20

21-30

30+

0

10

20

30

40

50

# of respondents

60

70

How many employees are in your company or the company you work for?

Are you planning to participate in the federal governmentâ&#x20AC;&#x2122;s economic stimulus program?

Employees 90

75

# of respondents

60 60

50 40

45

30 30

20 10

15

0 0 30+

20-30

10-20

5-10

<5

Payroll Protection Plan

Loan

Expanded Unemployment Program

No

State Regulations Lifting

Is your state lifting any regulations in the next week?

38%

62%

Yes

No

What preparations/restrictions are you planning to re-open your business?

Preparations/Restrictions Unsure Online payments only Outdoor/larger sites Limiting face-to-face interactions/enforcing distancing Curbside pick-up and staging drop-offs Limiting preview/pick-up numbers Transition to online-only, more simulcast Hand washing stations, sanitizer, extra cleaning Masks, gloves Wait until there are no limitations Adhering to CDC/local guidelines None 0

5

10

15

% of respondents

20

25

Rural

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

Small Town

Small City

Mid-sized City

Large City

0

20

40

60

# of respondents

80

100

Marketing & Management

Benefits

Real Estate

Personal & Commercial Assets

What is your primary source of income?

Marketing & Management

Benefits

Contract

Real Estate Personal & Commercial Assets

What is your secondary source of income? *22% of respondents chose N/A

Contract

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 Ba cr y n 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 P / y R ro Eq an pe ui c rty pm h/ Liv e In nt es du /C to st ck on ria st l /M ru ct an Re io u G st n f a a ov u c r er tu n m ant ri n g Eq en ui tS pm ur pl en In u t s/ te Se ll e izu ct ua re s lP r F op C in om e er Ar ty m t /J er ew ci 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 No

14%

86%

Which assets do you market?

120

100

80

60

40

20

0

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

Cancellations

% of respondents

30

20

10

0 0% April 1

<10% April 8

10-49% April 15

50-79%

80-99%

100%

April 22

Since our last report, weâ&#x20AC;&#x2122;ve seen a large shift in cancellations. Those seeing less than half of their auctions canceled rose sharply while those above 50% cancellations dropped. This marks the first shift back to more auctioneers resuming business.

Seller Questions Should I reschedule and when?

When will you be able to sell my assets/hold live events/galas?

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

Will this affect turnout, participation?

Will this affect buying, prices and values?

How are other sales going?

Are you still accepting consignments?

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

How do we move to virtual/online?

Will online only auctions do as well as live?

We are online only, so nothing has changed.

Clients are not asking questions.

0

20

40

% of respondents April 8

April 15

April 22

May 6

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

60

Seller Confidence Positive reinforcement Providing guidance Giving reasonable timeframes/realistic alternatives/flexibility inâ&#x20AC;Ś Keeping in contact, following up, informing Discussing pros/cons of postponing vs. canceling Showing recent auction results/sales data Counseling on benefits/success of virtual live/online only auctions Assuring we have tools/knowledge to conduct online auctions Providing more options for previews and pickups Using SignUp Genius for scheduling and pickups Encouraging back-up plans Staying calm Not currently conducting auctions We are online-only so nothing has changed 0% April 8

April 15

April 22

10%

May 6

20%

30%

40%

50%

% of respondents

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

60%

70%

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

Buyers & Donors 80 March 25

70

April 15

April 1 April 22

April 8 May 6

% of respondents

60 50 40 30 20 10 0 Adapting

Frustrated

Worried

Too Early to Tell Same as Usual

Declined

No auctions

Adapting and frustrated buyers both rose again since our last report, and while those who are worried and respondents who say itâ&#x20AC;&#x2122;s too early to tell are trending down, those auctioneers conducting business as usual is now trending up.

How has your live auction attendance been affected?

50

% of respondents

40

30

20

10

0 Lower

All Canceled March 25

Mostly Canceled April 1

Transitioned to Online April 8

Normal

April 15

Increased

April 22

No auctions

N/A

May 6

Even though many or all auctions were still affected for this report, this report shows the highest number of respondents transitioning to online since March 25.

Challenges with Preview/Load out Scheduling

Canceled/Postponed

Decreased Results

How has your online bidding participation been affected?

Decreased Traffic

Increased Results

Increased Traffic Online bidding participation saw a surge in increased traffic since the last report. Increased results remained consistently high.

Decreased traffic and results continue a downward trend.

Respondents starting online ventures peaked in April.

Just Started Online

No Significant Effect

N/A 0 March 25

April 1

April 8

April 15

April 22

May 6

10

20

30

% of respondents

40

Are you currently seeing a drop in asset values?

Affected Assets Land real estate

Asset Values 100

Residential real estate Commercial real estate Fine Art/Jewelry Intellectual property Government Surplus/seizures

75

Restaurant equipment Industrial/Manufacturing equipment Heavy Equipment/Construction

50

Farm/Ranch/Livestock Estate/Personal property Business liquidation

25

Recreational vehicles Bankruptcy 0 22-Apr Yes

6-May No

Not currently conducting auctions

Fundraising/Charity Auto/Motorcycles Antiques and collectibles 0%

10%

20%

30%

% of respondents

40%

March 25 April 15

April 8

April 1

May 6

April 22

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 Through nonprofit 0

10

20

30

40

50

60

% of respondents

70

80

What vulnerabilities are you currently seeing in your market?

Vulnerabilities % of respondents

80 60 40 20

C

an ce

on e N

ll a tio ns /P os

tp on Re em st ri c en t io ts ns /R eop en Fe in M g ar ov of in g Fa to ce O -to nl -F in ac e e Fe In te ar ra of ct Un io ns kn ow n Ec on om y Bu ye A ss rF et un sa ds re N on -e ss en tia l Se ll e rI ns Lo ec ss ur of i ty Bu sin es s/ In co m e

0

March 25

April 1

April 8

April 15

April 22

May 6

Many vulnerabilities are continuing their downward movement as states begin lifting restrictions. Seller insecurity is still a concern, as well as limitations and restrictions for reopening, which was added to this report.

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

Opportunities 40 30 20 10

N

sk ill s /

ot hi ng

ew

N

tra in in g

ng es ha C N

A

ss et

pp ra i sa ls

s Bu ye r C

on su lti ng /A

ew N

in g

In ve st m en ts Bi zD ev el op m en M or t e Fu tu re As se ts

M ar ke tin g/

ew

Se

lle r

s/ Ex pa nd

N

ew

Te c

M ar ke t

h

0 O nl in e

% of respondents

50

March 25

April 1

April 8

April 15

April 22

May 6

For seven weeks, online opportunities have topped respondentsâ&#x20AC;&#x2122; lists. As respondents begin looking at re-opening, the new sellers and expanding market opportunity becomes clearer as well.

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

We continue to see a drop in companies minimizing and halting expenses, though many remain in a holding pattern. Investments have seen an upward trend.

March 25

April 1

April 8

April 15

April 22

May 6

March 25 April 15

April 8

April 1 April 22

May 6

We've Gone Virtual

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

21% of respondents who work in real estate still say closings are definitely being affected. This statistic has remained strong for weeks. 17% say they are slowed by other industries To adapt, more respondents have gone virtual than in any past report.

Unknown

Nothing Yet

Slowed by Other Industries

Expect Changes

Definitely Affected

N/A

0

10

20

30

% of respondents

40

Bank Response 50 45

% of respondents

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

40 35 30 25 20 15 10 5 0 25-Mar

1-Apr

8-Apr

15-Apr

22-Apr

29-Apr

Status Quo

Hesitant to Lend

Major Changes

Unknown

Minor Changes

Busy with PPP loans

6-May

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

Non-Profit Clients

% of respondents

40

30

20

10

0 Still Evaluating

Exploring Options

Rescheduling

March 25

April 1

Canceling

April 8

Online Auctions

Other Fundraising Efforts

April 15

April 22

Unknown

N/A

May 6

Cancellations and reschedules in the benefit auction community dropped significantly since the past report. Many respondents are still utilizing online auctions and other fundraising methods.

Chart Title

100

% of respondents

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

120

80 60 40 20 0 25-Mar

1-Apr

8-Apr

15-Apr

22-Apr

Online/Virtual

Telethon

Direct Donation Campaigns

None/Waiting

Exploring Options

6-May

Sponsors

Contact: Adam Kenne akenne@auctioneers.org (913) 563-5421

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