Digitizing The Dutch Flower Auction
October 15, 2009
We arrived at FloraHolland in Aalsmeer for the Dutch Flower Auction at 7:30 a.m. Thursday, and the show was nearly over by the time we made our way to the auction rooms around 8. But in order to ensure product purchased is delivered to the correct destination -- which may be Asia, North America or elsewhere in Europe -- buyers for wholesalers and retailers start their days closer to 4 or 5 a.m.
The auction hasn't changed much over the years. Thousands of growers deliver product daily to the auction between 4 p.m. the day before and 4 a.m. the day of the auction. Product is then stored in massive warehouses, where buyers are free to view product before making bids later that morning. Once product is purchased, it's driven to individual purchaser locations before being packed and shipped away to its destination.
When we arrived Thursday, one auction room was nearly full of buyers and a second was just emptying. Fewer buyers bid from the auction rooms today because they can bid on the Internet. In fact, nearly 60 percent of all product is auctioned off the Internet. An even more astounding 85 percent of the product is exported from The Netherlands by midnight.
The auction is still effective for Dutch growers today because it keeps their prices competitive. If anything, because the overwhelming majority of product is being exported, an auction system today is probably more competitive because buyers for wholesalers and retailers represent a variety of different countries with a variety of different markets.
Two other interesting aspects of the flower auction were a product testing center where the shelf life of cut flowers is regularly examined and a mock garden center of sorts buyers can visit to view product available in the auction. The garden center isn't a retail store, but rather a facility where buyers can determine which products are available from growers. Product is simply presented in a retail-like manner.
The "auction room of the future" is also worth noting. Although the majority of buyers bid on the Internet, the second of two auction rooms I observed had only a few buyers in it. This auction room was called the "auction room of the future," meaning buyers bid based on photographs rather than having live product carted into the auction room each day. The buyers tend to be quite familiar with the product they're purchasing, so there's little reason to check the quality early each morning or in the auction room. In fact, when I visited an empty FloraHolland on Sunday, I was told more growers today are not viewing product in warehouses before making bids each day. The buyers trust the quality they're purchasing, and so the process is becoming more digital.