State of the Auction Industry Amid COVID-19 - April 15, 2020

National Auctioneers Association

State of the Auction Industry Amid COVID-19

April 15, 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.

This week we introduced a question about job status—whether respondents were full-time or part-time in the industry. 83% of respondents reported being full-time and 58% have been in the industry 30 years or more.

We also asked respondents how they were planning to participate in the federal government’s economic stimulus program. The overwhelming majority are looking at the payroll protection plan. That said, more than 20% were not planning to participate in anything.

Many in the auction industry remain at a standstill, but many are still adapting, through online/virtual auctions, pivoting to other assets, or using this time to improve their business.

Next week we will report on company sizes and whether items are retaining value in this market.

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 7,3454 member and non-member contacts. The survey was also distributed through a targeted Facebook ad.

The association received 196 responses. Raw data was collected and tabulated using Survey Monkey.

Compliance 15%

Job Status

17%

85%

Yes

Mostly

83%

Full-time

Part-time

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

Are you following CDC guidelines?

Are you a full-time auctioneer?

Economic Stimulus 60

50

40

30

20

10

0 Payroll Protection Plan

Loan

Expanded Unemployment Program

No

Undecided

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

N/A

nt iq ue s an d

A

C

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A

# of respondents

NAA Member Yes

Respondent Statistics No

14%

86%

Which assets do you market?

140

120

100

80

60

40

20

0

<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

# of respondents

50

60

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

Marketing & Management

What is your primary source of income?

Contract

Benefits

Real Estate

What is your secondary source of income? *32% of respondents chose N/A

Personal & Commercial Assets Contract

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

Cancellations April 1

April 8

April 15

Decision to Postpone

% of respondents

30

Client 20

10 Both

Auctioneer

0 0%

<10%

10-49%

50-79%

80-99%

100%

Respondents seeing zero summer auction cancellations dipped lower this week, while those in the mid range and 100% cancellation levels saw increases. Responsibility for decisions to postpone has remained consistent.

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

71% Will this affect buying, prices and values?

64% Should I reschedule and when?

64% Will this affect turnout, participation?

43% Will online only auctions do as well as live?

42% How are other sales going?

40% Are you still accepting consignments?

38% When will you sell my assets/hold live events/galas, how long will the holdout be?

33% Will the government allow us to have the auction? What liabilities exist?

30% How do we move to virtual/online?

21% How safe is it, what steps are being taken to ensure safety?

9% We are online-only, nothing has changed 6% Clients are not asking questions

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

74% Keeping in contact, following up, informing 63% Providing guidance â&#x20AC;&#x201C; scheduling, processes, sanitary measures 62% Giving reasonable timeframes/realistic alternatives/flexibility in rescheduling 62% Positive reinforcement â&#x20AC;&#x201C; we will get through this; people will be ready to get out again 60% Staying calm 49% Assuring we have tools/knowledge to conduct online auctions 40% Discussing pros/cons of postponing vs. canceling 32% Counseling on benefits/success of virtual live/online only auctions 31% Providing more options for previews and pickups to reduce group gatherings, sanitary cleanliness, delivery service options 27% Showing recent auction results/sales data 23% Encouraging back-up plans 14% Using SignUp Genius for scheduling previews and pick ups 6% We are online-only, nothing has changed

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

Buyers & Donors 60 March 25

April 1

April 8

April 15

50 40 30 20 10 0 Adapting

Frustrated

Worried

Too Early to Tell

Same as Usual

Declined

No auctions

Buyers and donors are by and large understanding and adapting to the current changes in the auction industry. Overall, frustration and fear seem to be subsiding.

How has your live auction attendance been affected?

50 March 25

April 1

April 8

April 15

% of respondents

40

30

20

10

0 Lower

All Canceled

Mostly Canceled

Transitioned to Online

Normal

Increased

No auctions

N/A

It is clear at this point that live auction attendance is mostly unattainable until government regulations change.

Challenges with Preview/Load out Scheduling

Canceled/Postponed

How has your online bidding participation been affected?

Decreased Results

Decreased Traffic

Increased Results

Increased Traffic

The percentage of respondents reporting that online auctions are not applicable to them has dropped 14% since March 25.

As auctioneers are adapting to an increase in online auctions, more are experiencing challenges with preview/load out scheduling. However, increased results and traffic continue to rise or remain high.

March 25

Just Started Online

No Significant Effect

N/A 0 April 1

April 8

April 15

10

20

30

% of respondents

40

March 25

April 8

April 1

April 15

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

on e N

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

April 15

Many concerns are still high for auctioneers, including fear of the economy, loss of business and income, and buyer funds.

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

on su lti ng /A

C

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

Opportunities for online auctions has consistently remained at the top of auctioneersâ&#x20AC;&#x2122; list. This week, we included new skills and training, as auctioneers have been taking advantage of those opportunities regularly. Auctioneers are also anticipating more expansion, business development, future assets and new buyers this week.

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

March 25

April 8

April 1

April 15

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

The percentage of respondents whose company is conserving has risen steadily since March 25. But for as much as auctioneers are minimizing and reducing, the same percent are on the lookout for opportunities.

March 25

April 1

April 8

April 15

We've Gone Virtual

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

7% more auctioneers have gone virtual in their real estate closings since March 25. Work is definitely affected according to 20% of auctioneers this week.

Unknown

Nothing Yet

Slowed by Other Industries

Expect Changes

Definitely Affected

N/A

0

10

20

30

% of respondents

40

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

8-Apr

Status Quo

Hesitant to Lend

Unknown

Minor Changes

15-Apr

Major Changes

Interesting trends developed this week as banks are beginning to take on the large task of instituting government assistance. This change has doubled the percentage of auctioneers who say they are unsure about bank response. The percentage of respondents who saw minor changes in banks fell by more than half, while hesitancy to lend rose by 8%.

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

Non-Profit Clients March 25

April 1

April 8

April 15

% of respondents

40

30

20

10

0 Still Evaluating

Exploring Options

Rescheduling

Canceling

Online Auctions

Other Fundraising Efforts

Unknown

N/A

Since last week, the percentage of non-profit clients canceling events dropped by 8%. Online auction acceptance and those open to exploring options has remained consistent week-to-week.

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

50

% of respondents Online/virtual auctions are back up to their highest level since March 25. More auctioneers are exploring options with their clients this week than any time in the past month.

March 25

April 1

April 8

April 15

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