“The important point is that we ‘re-invent’ the marketplace to make it ready for the future. We start by listening to our customers and our members. We want to learn how their world works and how they view the developments of the market and their own company. If we just imposed a solution, then we would be ignoring the people we work for. That would be fatal. We deliberately did not set boundary conditions for the New Auctioning programme, but there is clearly a necessity to tackle this situation.”

This statement was made by Ronald Teerds. As programme manager of the New Auctioning, he started in March on an important component of the new strategy. In the framework of FloraHolland 2020, five programmes have been initiated, of which the New Auctioning is one. The New Auctioning must lead to a marketplace for the future, in which growers and customers can conduct effective and efficient transactions of horticultural products. The physical marketplace and the sales systems it houses must ensure a stable price-setting. To keep the marketplace affordable, the costs have to be reduced.

System adjustment and system change

"In the past few years, much has happened regarding marketing resources," stressed Teerds. "The introduction of image auctioning. Discussions about adjusting the minimum price and whether or not to display the buyer's number on the clock front. The policy for dealing with excesses. These are all examples of necessary interventions and improvements, but they primarily involve optimising the existing situation. That will not make the marketplace future-proof. Now is the time to examine the physical marketplace and the sales instruments with an eye to the future. That is why people are being given the space to outline the route to the future, together with the growers and customers. Becasue the market is demanding this."

Need for fundamental changes

Ronald Teerds analysed why a fundamental change of the marketplace is necessary. "The clock volumes are decreasing, and the purchases at the clock are increasingly small scale. The question arises of how long the clock will retain its function of concentrating supply and demand in this way and whether the clock in its current form will obtain the best price from the market for its members. In addition, I wonder how long the clock system will remain financially viable."

"At the same time, the direct flows are increasing, but their sales are also shrinking in size. This raises the marketing costs, both for growers and for customers. For growers the increasing fragmentation of purchases is producing greater logistics problems, let alone far more stress as a result. Ultimately, the current direct marketing systems will run into trouble, and this problem needs a solution. The clock also has a price-setting and display function. It is indispensable for introducing new cultivars."

Where is this going?

"We don't know what this is leading to and we don't yet need to know where this is going," concluded Teerds. "We must formulate the answers together with growers and customers. Together we need to develop a marketplace on which growers and customers can base a healthy operational management. As an auction organisation, you don't want to take that decision alone. Collaboration is the key word in the New Auctioning programme."

Source: FloraHolland.com