The price of going virtual

I have to admit that I really enjoyed it. The many positive responses to my first column about the new auctioning system. My message regarding the speed at which the new auctioning system should be implemented was received positively by Lucas too.

In this trade journal we could read a while ago how Lucas Vos said the auction clocks in Naaldwijk and Aalsmeer will become virtual clocks and the tiered seating will disappear. Rijnsburg, Eelde and Plantion will be the only physical auction locations left. It’s all very well using the physical auction clocks, but the increasing associated costs will have to be paid by the users. No more subsidies.

The auction is investing €14 million in ICT, so they can get FloraMondo 2.0 started. I appreciate the speed at which the auction is getting rid of the majority of the physical clocks and how they’re making the logistics process more efficient. But I do have a question. Will the upcoming robotization and the more intricate logistic handling (combined with FloraMondo) be more efficient for the customer’s customer (= our customers)?

Virtual auctioning leads to a reduction in overhead expenses. With their digital platform FloraMondo 2.0, FloraHolland opens their doors to the entire world. Small-scale purchasing is going to be easier than ever before. Our customers will be able to buy relatively small volumes directly from the auction. All facilitated by FloraHolland’s new format. Does that mean that the customer is going to pay for the costs associated with these small-scale sales? The sustainability of increasing intricacy could be questioned. It’s important to keep an eye on the ‘cost-causer, cost-payer principle’, as this is the only way to ensure future-oriented, healthy business operations.

Opening your doors to the world is great, but the costs associated with small-scale sales – and overall increase of auction expenses – cannot end up on the bills of existing, loyal customers. And if they do, there’s a strong chance that these customers will develop their own low-cost digital marketplaces, allowing them to stay competitive. Now, that wouldn’t be beneficial to anyone in the Dutch floricultural industry in my opinion.

Let me end on a positive note. The auction is showing progress – they’re implementing changes without losing the momentum. Let’s all commit to ensuring that cost-causers really will be cost-payers.

Marco van Zijverden
General director Dutch Flower Group