In October of 1991, the strongest storm in recorded history hit off the coast of Gloucester, Maine. Created by three storms combined into one, it was dubbed “the perfect storm,” and created almost apocalyptic conditions in the Atlantic Ocean. The storm was recounted in the book The Perfect Storm by Sebastian Junger and the Warner Brothers film of the same name starring George Clooney.
Another perfect storm has been brewing for some time now in the antiques business. The results of the storm, though not apocalyptic, will manifest a shift in power from the antiques dealer to the consumer, which will re-define the way business is transacted. The days of the unchallenged expertise of the dealer are over. The three elements driving the storm of change are the proliferation of social networking, mobile Internet devices, and product/pricing transparency.
The First Storm: Online Social Networking
The human desire to connect with other people has driven online social networking to triple-digit growth. As of April 2010, Facebook had over 400 million users, and adds hundreds of thousands of new users daily. Four hundred million Facebook users is about 30 percent more than the population of the entire United States.
Add in the numbers from Twitter, MySpace, and other platforms and the number of people actively engaged in online social networking is staggering. People are connected, and they talk to each other, offer advice, and share knowledge.
The Second Storm: Mobile Devices
In 2009, there were more than 450 million mobile Internet users worldwide, according to IDC global intelligence. This number is expected to surpass the one billion mark by 2013. Mobile Internet will replace, and be as common as, cell phones. Internet-connected mobile devices are already reshaping the way we go about our personal and professional lives. Mobile device users regularly use search engines, read news, download podcasts, music, videos, and exchange e-mails.
The Third Storm: Product/Pricing Transparency
In his book The World Is Flat, author Thomas Friedman asserts that one effect of global interconnectivity is the breaking down of barriers. Information on any topic is available anytime, anywhere, to anyone. Up until now, antique dealers could be confident that the majority of their customers knew less than they did about their inventory. That is no longer the case; the information readily available via mobile Internet devices has broken down the knowledge barrier between dealer and consumer. Consumers can quickly access item descriptions, points of connoisseurship, and pricing information at websites like collect.com, kovels.com, and worthpoint.com.
On the leading edge of the antiques information revolution is Will Seippel, a lifelong collectibles dealer, executive, college professor, and creator and CEO of WorthPoint.com.
Seippel combined his experience creating databases for the airline and telecom industries with his knowledge of collectibles to create the WorthPoint database.
According to Seippel, WorthPoint aggregates pricing information from the top 50 auction houses, including eBay market data, TIAS, and sister site GoAntiques. WorthPoint also offers access to research articles and certified appraisers, designated “Worthologists.” Of course, mobile devices are supported.
Although many dealers and appraisers subscribe to the database, consumers are WorthPoint’s targeted market. According to Quantcast.com, 81 percent of Worthpoints visitors are non-antiques professionals in the 35-and-up age and $100,000-plus income demographics. The service is priced for non-professionals, costing less per day than a trip to Starbucks. Clearly, the service is driven by consumer needs rather than business needs.
WorthPoint’s rapid growth is proof that there is a desire for antique product and antique pricing information. Since beginning in April 2009 as a subscription site, WothPoint has enrolled over 7,000 paid subscribers, and has over 100,000 users per day, including “free trial” users. Quantcast ranks them as number 758 for site traffic in the U.S., with more than 10 times the traffic of their closest competitor after only 18 months of operation. WorthPoint is growing at over 5 percent per month, in an economy where 2 percent growth per year is considered impressive. Seippel estimates that WorthPoint will have over 10,000 paid subscribers by the end of 2010. Growth is expected to skyrocket with their next product release.
In the fall of 2010, Worthpoint is slated to roll out a new product, which will complete the “perfect storm” scenario.
Seippel states that the new database will add over 10 million records per month, and have the capability to store over 1 billion records and 10 billion photos. Think about it: 10 billion.
Look up into the sky on a clear night; you will see roughly 10 billion stars. In addition, Worthpoint is digitizing antique periodicals and textbooks; their research taxonomy will go 4 levels deep, ending with a wiki that will drive the information database even deeper.
At-will access to such an antiques and collectibles database will give a clear advantage to consumers.
No longer will a consumer settle for pennies on the dollar when selling items to a dealer. With up-to-date information, a private seller can list their item online, give accurate descriptions, set competitive prices or reserves without guessing, and make more money than they could when selling to a dealer. When buying, a consumer can cross-check a dealer’s price to see if they are fair, and quickly access the information they need to determine if the item they are contemplating is authentic.
Of course, there have always been consumers savvy enough to compete with the experience of a dealer. It is commonplace to see bidders attend an auction carrying a printed collectibles guide. In the perfect storm scenario, however, anyone with mobile Internet access and decent search skills can compete effectively, regardless of their age or experience.
What does this perfect storm mean for antique dealers? Antique dealers and auctioneers are already reporting a higher number of shoppers armed with mobile devices.
Within the next 4 years, it is anticipated that Internet-ready mobile devices will have replaced cell phones. At that point, virtually everyone attending an auction or shopping in a showroom will be equipped to refer to online pricing and product information.
Dealers suggest that mobile devices will likely not affect sales to in-store browsers or impulse purchasers.
High-end sales and sales to collectors will be impacted.
As prices go up, buyers are more cautious. High-end sales will still be made, but profit margins will suffer. Antique dealers who are unwilling to negotiate their markups will find their inventory turns will slow down, and over-all profitability will suffer as a result. Dealers can also expect to pay more for their purchases.
Dealers will need to be aware of what is being said online about items they have in their inventory.
Where a relationship of trust has not been established between the buyer and seller, information a buyer gleans from an “authority” website, right or wrong, will carry more weight than a dealer’s opinion. The dealer needs to sharpen his sales skills to sway a buyer toward his item.
The way for an antique dealer to survive the coming perfect storm is be as tech-savvy as his customers, and stay current with both the available technology and the developing information products.
Previously published in Antique Trader Magazine