SOME READ ON AUCTIONS.
April 27, 1999 08:13
Going, Going, Gone -- Auctions Represent a New Way of Doing Business Online, IDC Says
Online Auctions Are Becoming a Critical Component of E-Commerce Sites
FRAMINGHAM, Mass., April 27 /PRNewswire/ -- The Internet may make the cry of the auctioneer a thing of the past. According to a new bulletin from International Data Corporation (IDC), Online Auctions: The New E-Commerce Enabler, online auctions are increasing in popularity.
"The traditional inefficiencies of auctions in the offline world have ultimately been resolved by the Internet," said Jill Frankle, program manager for IDC's Internet and eCommerce Strategies research. According to IDC, those inefficiencies include limited geographic coverage, a dearth of variety and breadth of products, high transaction costs, and information inefficiency. "These limitations are actually industry traits that make the market ripe for redefinition by the Internet," Frankle said.
The Internet provides the infrastructure to overcome the limitations of traditional auctions. It can handle large quantities of data and support an infinite number of products and services. Additionally, the Internet provides a central platform for buyers and sellers to trade on a global basis. "Online auctions have been so successful on the Internet because they are able to create the three critical Cs for success on the Web: community, content, and commerce," Frankle said.
Not only is the Internet good for online auctions, but online auctions are good for e-commerce. They are a tool that can drive user retention and build brands. "Auctions fit the definition of a sticky application -- something that engages users and keeps them coming back," Frankle said. The online auction is quickly becoming a critical component for any e-commerce site that wants to market a portion of its merchandise online. IDC believes portals will have to be able to deliver auction functionality to their customers, especially to small businesses.
"The online auction is not a passing fad. It represents a new way for companies to conduct business with an increasingly global customer base," Frankle said. "As businesses extend their e-commerce initiatives, software solutions providers must be able to offer this new functionality to remain competitive in the marketplace."
According to IDC, eBay is the company to beat in the online auction market. It has more than 2 million registered users, conducts over $1 billion of gross merchandise sales annually, and is closing in on having 2 million items for sale at any given time. "eBay's size and growth make the market tough for existing players as well as new entrants," Frankle said. "It will be difficult for any competitor to match its scale." However, IDC believes if there is any online retailer that can challenge eBay's dominance, it is Amazon.com, which recently contracted with 117 small businesses to run auctions on its site.
IDC's bulletin, Online Auctions: The New E-Commerce Enabler (IDC #B18872), discusses online auctions in great detail. It explains person-to-person and merchant auctions and examines competitive factors, niche auction sites, and auction software. Additionally, it profiles leading online auction houses. To order a copy of the bulletin, contact Sue Beauregard at 1-800-343-4952, ext. 4774 or at sbeauregard@idc.com.
About IDC
International Data Corporation is the information technology industry's most comprehensive resource on worldwide IT markets, trends, products, vendors, and geographies. IDC provides data, analysis, and advisory services to the world's leading IT suppliers as well as IS professionals in finance, insurance, entertainment, advertising, consumer goods, and publishing. IDC's research and opinions are based on the results of more than 300,000 end-user surveys, in-depth competitive analysis, broad technology coverage, and strategic analysis. IDC is committed to providing global research with local content through its 500 analysts in more than 40 countries worldwide. Additional information on IDC can be found on its Web site at idc.com.
IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.
All product and company names may be trademarks or registered trademarks of their respective holders.
SOURCE IDC
/CONTACT: Jill Frankle, 508-935-4503, jfrankle@idc.com or Karen Proffitt,
508-935-4771, kproffitt@idc.com both of IDC/
/Company News On-Call: prnewswire.com or
fax, 800-758-5804, ext. 113987/
/Web site: idc.com
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