Online Sales boom

You can buy anything online, provided you know where to look. This has not always been the case when it comes to luxury products, however, as some high-end brands were slow to jump on the eCommerce bandwagon.

To some extent this is understandable as those who stump up for luxury items expect exclusivity, experience and exceptional customer service. These demands can’t always be met simply by sitting at your computer.

But the onset of the Covid pandemic accelerated the luxury sector’s shift into the digital marketplace, and as boutiques and showrooms were forced into closure during 2020, online options emerged as a viable route for companies to connect with their customers.

This saw the online share of the luxury goods market surge, and those levels have been maintained in the years that followed despite trade being allowed to take place inside bricks and mortar once more.

While bloodstock rates a very different type of commodity to other luxury items, the industry has begun mirroring this move into the online marketplace. The online sale now rates arguably the fastest growing area within the global bloodstock business.

In Europe the established auction houses of Arqana, Goffs and Tattersalls have significantly enhanced their online offerings, with regular scheduled sales as well as ad hoc pop-up auctions. There is also a growing record of notable transactions – both in terms of prices and future performance.

Arqana sold three-time Grade 1-winning hurdler Impaire Et Passe to Highflyer Bloodstock for €155,000 at its April Pop-Up Sale in 2022, while Jayne McGivern’s Dash Grange Stud went to £340,000 for Constitution Hill’s dam Queen Of The Stage through Goffs Online in May that same year.

Tattersalls’ online sales have sold horses for up to £420,000, with Badgers Bloodstock securing the Group 3 winner West End Girl on behalf of Cayton Park Stud in June 2020. The Newmarket-based operation has since taken the online concept from a Covid crisis measure to a monthly event.

“Tattersalls began holding online sales during Covid because it was the only place the company could sell,” says Katherine Sheridan, who joined the firm as online sales executive in April 2022.

“That first online sale in 2020 was a good sale as it grossed £590,000 and one of the top horses was Great House, who went to Australia for Highclere and was still winning up until just after December, but that was really our answer to the challenges Covid presented.

“I came on board in April 2022 and, even though restrictions had been lifted by that point, we made a decision in August to finish that year with a monthly sale. We felt the monthly sale is a consistent format so it becomes familiar in peoples’ minds. You know that if you miss one month then it’s okay because there’s another sale the following month.”

Tattersalls held nine online auctions during 2022, which in turn saw 362 lots entered and 320 go under the digital gavel. They yielded 175 individual sales with receipts totalling a highly respectable 2,303,600gns. It is a sign of the progress the online concept has made that those numbers were completely overshadowed in 2023.

In total the 12 monthly sales attracted 840 entries, a 132 per cent year-on-year gain, while 755 took their turn in the online ring. Those offerings resulted in 386 transactions, a 121 per cent increase, and combined turnover of 4,227,405gns, which was up 84 per cent on the previous year.

There is a temptation to assume that such big numbers appearing in online sales might be detracting from catalogues at Tattersalls’ physical sales. However, quite the opposite has been the case.

“The success during the Covid period, when we saw some really strong sales on the platform, that’s when we saw the online sales could really complement the existing sales calendar,” says Sheridan. “They’ve found their place and where we see them actually benefiting the live sales is if a horse has to be withdrawn or doesn’t make it to the live sale for whatever reason, then the option to sell at public auction isn’t removed. There’s still a chance to bring that horse to market.

“We haven’t seen any depletion in numbers at our live sales, and in fact last year we saw numbers increasing at the live sales like the July Sale and the Autumn Horses in Training Sale. So those numbers aren’t being negatively impacted, we’re just providing another option. It’s really just about presenting buyers and sellers with greater opportunities.”

These greater opportunities help mirror the immediacy that customers find when they go shopping in the wider online marketplace, something that isn’t typically served by the rigid cycle of traditional sales. The on-demand culture of an instant gratification society is something that online bloodstock sales have tapped into, says Leif Aaron, Fasig-Tipton’s director of digital sales.

“Covid pushed Fasig into thinking about the possibility of a digital platform but the biggest reason behind its introduction was really to provide another service to our customers,” says Aaron. “It was basically just giving our clients the option to sell whenever they wanted to, and making the horses a lot more liquid than they were before.

“People don’t have the time to come spend four days at an auction away from their families and their jobs, but they still have the hunger to be in the game. We’re seeing a lot of new people that’ve never bought from Fasig-Tipton that are buying horses online now, which is fantastic. What we’re also seeing is trust in the digital market as a whole. That means we’re getting better horses and more buyers.”

Online sales have taken an even firmer hold in other jurisdictions

Although plenty of progress has been made in Europe, online sales have taken an even firmer hold in other jurisdictions.

In September 2021, New Zealand Bloodstock’s digital platform Gavelhouse Plus set a new high mark for the online sale of a thoroughbred when Te Akau Racing’s nine-time Group 1 winner Avantage was knocked down to Coolmore’s Tom Magnier at NZ$4,100,000. A host of other seven-figure transactions have followed in the southern hemisphere, including when the Group 2-winning North Star Lass went the way of YuLong Investments at A$1.525m via Inglis Digital, a front runner in the online market, last September.

The practical advantages of selling online has been an important factor in countries like Australia and the US, where shipping horses vast distances can present logistical challenges. This was borne out when Fasig-Tipton hosted the first phase of the Glen Todd Dispersal in April 2022, a little over a month after the company launched its digital platform. The sale saw 31 lots gross $1,197,500. In Aaron’s view, that was the sale that set the ball rolling for Fasig-Tipton’s booming digital platform.

“The first sale we had was in March 2022 and we had around 20 entries,” he says. “The next sale had 23 or 24 entries and it was just ticking along. Then we got the Glen Todd Dispersal, and a lot of those horses were in Seattle, Washington. They asked us what we thought the horses were worth and if they should ship them to Kentucky.

“It worked out best to offer these horses on the digital platform so we could keep them all in Seattle, and the horses ended up selling for about four times what we’d appraised them for. That’s when I first really felt like ‘This thing can get legs.’

“From that point on, it was just a little bit of growth, a little bit of growth, a little bit of growth. Then, in December of 2023, we had 309 entries and it felt like it just exploded. We were having record amounts of registered bidders, our finance department was literally working around the clock to approve people to bid. Enough people registered to bid to fill up our entire pavilion.”

Fasig’s eye-catching results have continued in 2024. Pounce really put the platform in the spotlight, first when she changed hands for $370,000 to the bid of John Stewart’s Resolute Racing at the February Digital Sale, then by winning the Grade 3 Herecomesthebride Stakes on her first start for new connections.

“Pounce was a great deal and this is really what the website was built for,” says Aaron. “The horse won impressively, the original ownership group decided they wanted to sell and instead of trying to coordinate a behind-the-screen private bidding process they made it public and let everybody participate and it attracted buyers from all over the world. It was the icing on the cake for us when she won a Grade stakes next out.”

Although most sales venues have all the mod cons, the nuts and bolts of the sales process has remained virtually unaltered for decades. This means that converting buyers and sellers into online participants has required behavioural shifts from both parties.

Sheridan says Tattersalls have relied on tried and tested customer service to allay any anxiety around navigating an unfamiliar way of doing business.

“Anything new, whether that’s in this industry or any other, comes with a certain level of challenge, but for us this has really been about demystifying the idea of online sales because some people in the horse business wouldn’t qualify themselves as tech savvy,” she says. “But even though these sales are online we still look to have that personal connection. There’s no restrictions on communication with us and vendors certainly aren’t expected to deal with the computer the whole way through. There’s a dedicated online team, but right across each department everybody at Tattersalls is committed to providing help to people whenever they need it.”

Buyers are becoming increasingly comfortable basing their decisions on the evidence of conformation photos and walking videos

From Fasig-Tipton’s perspective, Aaron says there has been an organic increase in engagement with the company’s online sales.

“We haven’t really tried to change anybody’s habits,” he says. “People have educated themselves. They have a week to work the sale, they don’t have to go anywhere and they’ve been able to study it for themselves and that’s made them feel more comfortable with the process.

“Everybody has their own way of working a sale and that’s no different with the digital auctions. We have some people who’re willing to buy totally off pictures and videos and some that send their agents to inspect the horses in the flesh. It varies, but with every sale people are becoming more and more comfortable with the process.”

While some prospective purchasers will send their agent to inspect an online offering firsthand, the representatives from Fasig-Tipton and Tattersalls report that buyers are becoming increasingly comfortable basing their decisions on the evidence of conformation photos and walking videos.

“We try to cement in vendors’ minds that that video is their opportunity,” says Sheridan. “That’s essentially the horse’s first inspection. That’s like taking the horse out of the stable for the first time.

“That’s what people are going by and that’s one of the changes we’ve seen, people are basing their decisions on what’s provided and not necessarily going to see the horse. The quality of media being provided is so important and something we’re dedicated to improving.”

With pedigrees and racing performances written in black and white, the vast majority of online trade has centred around horses-in-training and breeding prospects. However, that is beginning to change, with both Tattersalls and Fasig-Tipton seeing encouraging results for untried stock.

At the Fasig-Tipton Digital April Sale, a Curlin colt foal closely related to six-time Grade 1 winner Malathaat sold along with his dam, Eileen’s Dream, for $660,000 to the bid of DJ Stable. The price set a new high mark for the online platform.

“Personally I did not think that youngstock would really take off like it has online,” says Aaron. “I would’ve said it’s easy to sell a cheaper yearling on here before our last sale, but we had a Curlin foal sell with its mother for $660,000. That showed me that we can sell an expensive youngster too. It has to be the right horse, but at this point there’s nothing I’m afraid to sell on this website.”

Tattersalls Online’s June Sale will feature a breeze-up session that will look to build upon the foundations put down 12 months ago. The inaugural online breeze-up sale saw 13 sold for a clearance rate of 72 per cent.

The priciest of the youngsters put through their paces at Dundalk, a Sioux Nation filly, sold to Rycran Investments for 23,000gns. This year the juveniles will breeze at one of two locations, either Dundalk and Chelmsford, before coming under the hammer.

“The number of entries increasing this year is reflective of vendors seeing the value of these online sales,” says Sheridan. “You can stay domestically and breeze domestically but still present your horse to an international market and have it be marketed to the same level as any of our live sales.

“Although last year’s sale was small in terms of numbers, it was great to see that it can be done. We had people buying from Britain, Ireland, Italy and as far away as the Gulf region. It showed it can be done in a different way and that vendors can still achieve a good result – and a more profitable result by not incurring the costs of travelling horses and staff overseas.”

Veterinary and shipping enhancements have already made moving horses around the world easier than ever before, and the flexibility provided by online sales means that even if horses are boarding a plane, buyers don’t need to.

“It’s opening up the international avenues further because we’re seeing involvement from right across Europe and different racing jurisdictions, including Hong Kong and Australia,” says Sheridan. “We all know about the globalisation of the bloodstock industry and those channels are ones that we’re certainly hoping to grow, and expect to see the biggest growth in, at our online sales.”

Online sales are not only making the bloodstock world smaller, but are gradually weaving their way into the fabric of the industry. As buyers and sellers become more accustomed to trading online, and trading a wider variety of stock, the scope for progress is limitless.

“I think there’s huge potential for the future,” says Sheridan. “We’ve been looking to other jurisdictions where online sales have been around for longer. They’ve shown the capabilities of online selling and the confidence that grows from the frequency of participating in those sales.

“I’m confident, based on the feedback from users and the wider bloodstock community, that the upward trajectory of online sales is the only thing you could anticipate based on what we’re seeing.”

 

“It’s been very organic growth”

The established auction houses are not the only players in the online sales market. Thoroughbid, which went live in September 2021, is Britain’s first online-only bloodstock sales company, and from a standing start the operation has quickly compiled an eye-catching roll of honour.

Its On The Line, winner of the Aintree and Punchestown Hunter Chases, changed hands through Thoroughbid for just £8,000 in March 2022, and at the same sale Coolmara Stables secured the subsequent Cheltenham Festival winner Maskada at £80,000.

Grade 1 Top Novices’ Hurdle winner Belfast Banter was also sold via Thoroughbid and went on to land a second top-level contest at Saratoga after going the way of David Mullins for £130,000. There has been success on the Flat too, with a 50 per cent share in Thunderbear realising £75,000 from City Bloodstock before the son of Kodi Bear landed the Group 3 Dubai International World Trophy Stakes.

“If someone had said to me that in under three years we’d have had a winner at all the major spring festivals in National Hunt racing, a Group winner on the Flat and a Grade 1 winner overseas I’d have been a very happy man,” says Thoroughbid’s chief executive James Richardson.

“That’s a huge testament to having built a product that people want to use. Another thing I’m proud of is having sold animals in Britain, Ireland and France to the US, the Middle East and mainland Europe. It’s quite a feat for a business that started from scratch. It’s been very organic growth and hopefully it continues to go that way.”

Thoroughbid has gained traction by doing things slightly differently to other sales companies, with an added emphasis on flexibility, inclusivity and integrity. For example, purchasers have 48 hours for veterinary re-examination after the fall of the hammer. And whereas the established auction houses do not pay vendors until at least 35 days after the sale, Thoroughbid has shortened this window to seven working days.

“The industry can be quick to forget that not everybody is an industry professional,” says Richardson. “It can be quite an intimidating industry to come into, certainly from a purchasing point of view, as you’re reliant on industry knowledge and industry experts to be able to participate.

“We have plenty of anecdotal evidence from people who I believe would’ve never bought at a physical sale but have bought a horse with us because they’ve seen a route to market that they understand.”

Reflecting on the trajectory of Thoroughbid’s early years, Richardson says: “Like anything new, especially something in the racing industry, everybody tells you why it won’t work. Everybody told us we won’t be able to do it without offering credit and that everybody needs to be able to see the horse in the flesh. But some of the most satisfying times I have now are when people who told me that this couldn’t work become clients and either buy or sell, or both, through Thoroughbid.”

Richardson says there is a new generation of racehorse owners emerging who are less willing to operate solely within the constraints of physical sales. To that extent, Thoroughbid is ideally positioned to cater for those whose perspective isn’t bound by tradition.

“We’re not for a second saying we’re better than anybody else, but there is definitely a place for online sales and there’s definitely a place for opening up new markets,” says Richardson. “There are multiple ways to sell horses. Online has its place in the market and it also has the capability to mitigate some of the issues within the sport. Hopefully we have some exciting things to launch in the not too distant future. Ultimately we’re here to serve the industry how and whenever they want.”