Panel: Sales' Use of Technology Accelerated by Pandemic

The COVID-19 pandemic that disrupted and shifted the sales schedule this year pushed auction houses, consignors, and buyers to quickly adapt to the use of technology in order to reach as many potential buyers as possible and to conduct research during travel restrictions, a panel for the University of Louisville Equine Industry Program's fall speaker series noted during a virtual discussion Oct. 13.

The panel, entitled "Waiting for the Gavel to Fall: Kentucky Horse Sales Go High Tech," included Boyd Browning Jr., the president and CEO of Fasig-Tipton; Duncan Taylor, the president and CEO of Taylor Made Sales Agency; bloodstock agent David Ingordo; and Jack Carlino, an EIP and Godolphin Flying Start graduate who co-founded the online auction house Wanamaker's. Megan Devine, also an EIP graduate, on-air personality for TVG, and founder of VidHorse, moderated and fielded questions from the live chat on the Horse Racing Nation Facebook page, which hosted the panel.

"We don't make quick transitions," Ingordo said of the Thoroughbred industry. "We're glacially slow at times to adapt. And if COVID did anything for the sales side of it, it made us all adapt very quickly."

The bloodstock agent said he felt the video quality provided by sales consignors improved drastically this year from the 2-year-old sales in March, when COVID-19 restrictions were put in place nationwide, to June.

Providing online videos of the horses walking and conformation shots became the norm this season without all buyers being able to attend the sales in person. When a question was fielded asking why it took consignors so long to begin posting videos of their offerings, Taylor said the quality of the technology wasn't there before.

Ingordo added: "If they're bad videos, you could have Secretariat standing there and it's going to hurt your chances of getting it bought or sold. If the video quality improves, it might even help sell a horse that maybe isn't that good."

Browning also touched on the logistics of the videos.

"In 2020 we all had to do everything humanly possible to present our product to the broadest base of buyers and do anything we could to give them an opportunity to bid. But it's really, really hard to shoot a high-quality video of a yearling in an environment in which it's comfortable in and to give an accurate representation or portrayal of that horse as opposed to seeing it in person walking on the sales ground," Browning said. "It sounds really easy to say, 'Hey, let's just go video these 25 yearlings and we'll do it in the next hour or two down and back, down and back (walking). It's not that easy. It's much easier to say it needs to be done. The execution is difficult and there will be a learning curve. There will be some folks who will embrace it and others will absolutely scoff at it going forward."

Online bidding began in earnest at this year's Ocala Breeders' Sales Spring Sale of 2-Year-Olds in Training, moved to June from April, and was also used by Fasig-Tipton and Keeneland during their sales. The tool allowed buyers to participate in the action without being on the sales grounds.

"It's kind of become a standard and norm for the three major sales companies in North America—OBS, Fasig-Tipton, and Keeneland. Going forward, I think it will be part of our standard operating procedures," Browning said.

Wanamaker's, which hosts monthly online-only auctions and launched in June, was an idea that came about before the COVID-19 pandemic even hit, Carlino said. He and co-founder Liza Hendriks observed Australia's online sales for moving racehorses while there for the Godolphin Flying Start program. The bidding so far has been seamless, he added.

"It's a technology that's out there. There's certainly a hurdle in getting it set up and getting used to it," Carlino said, "but I think people still get a thrill from it. I think it's a good way to go. It just gives that additional option for everyone in the industry."

Ingordo said he felt online auctions can work well for racehorses and broodmares whose value can be shown from performance on paper. His preference for younger horses, such as yearlings or 2-year-olds in training, would be to get a look at them prior to the sale or have a trusted eye examine them. He also discussed how the energy of being at the sale in person can entice clients to continue bidding.

"If I'm not there, and I'm doing over the phone like I did today, I'm underbidder a lot more just because I'm like, 'Eh, whatever,' and you let it go," he said. "When you're there, you're more emotionally invested in that purchase. I found the horse, I want it, you put your time in, you just dig a little deeper, and that's good for everybody."

Browning agreed, saying the auction process is to get rational people to make emotional decisions.

"Let's just say for instance, Bob Baffert is bidding on a horse and looks over and Kenny McPeek sees Bob bid. It reaffirms his confidence, and he might bid an extra time or two, and vice versa," Browning said. "If David sees somebody that is another top bloodstock agent bid on a horse, and he's kind of thinking he's at the end of his rope at the end of his budget and he's like, 'I just can't take a chance of having to race against that horse, we've got to continue, we've got to bid another time,' and another time, and then another time.

"I think it's important even on the online side of things," he added. "I think that (if) you would study any of the models that once somebody gets engaged in bids, the likelihood of them continuing to bid is dramatically higher than if they never get engaged in the process. So we're looking for as much engagement, the highest level of engagement as possible, both online and at live auctions."

Carlino said with people spending more time on their phones and computers, technology has started to become part of human nature, which makes it easier to get into online bidding.

"We sold a horse a couple months ago for $400,000, and we spoke to the buyer afterwards, who's Rob Masiello," he said. "He goes, 'Man, I didn't know how it was going to feel, but I was really nervous, staring at my screen.' We were laughing about it at that point, and I found it kind of interesting because it's something that we had wondered, are people going to get that same kind of drive when they're up against someone online? Is it different? Sure. Is it the same? It's impossible to tell, but I don't think you lose it all together.

"I also found it interesting that Rob Masiello, he's a guy that lives in New York and he works in equities trading, so he works in the financial industry. He's probably very used to doing large transactions with a couple of clicks. It's something where if you're a trader, they're probably used to making high-dollar moves."

Taylor felt the online process would work well in a place like Lexington or another region with horsemen and veterinarians that can check the horses out prior to the sale, versus a state that doesn't have much racing involvement. He also viewed it as a useful tool for someone who owns a mare whose foal may have won a stakes race early in the year. The monthly model allows a seller to put that mare on the market quickly instead of waiting until the November breeding stock sales and risk something going wrong.

"I think in the long run, the more opportunities there are for people to be able to sell their horse when they need to sell it, the better off it is," Taylor said. "I don't think it's going to hurt the public auctions, in my opinion."

Technology has even started to change at American sales in the form of veterinary inspections. Ingordo said when buying horses in places such as Japan and Australia, video scopes that can be viewed by potential buyers are used instead of traditional endoscopic exams in the United States, where a veterinarian performs the exam for a single potential buyer.

"I got to liking the video scope because you'll do some work vetting horses, and doing your homework ahead of time is an expensive process," Ingordo said. "It's expensive because it's worth it, but I will buy horses for myself sort of on the fly and I'll go in the back and look around and see I missed that horse, I really like him, how's he vet? I can ask Duncan, and his notes will be pretty accurate, but at the end of the day, I need to know for myself, so I'll get my vet to do it. They used to be able to read the X-rays between—when (the horses) come up in the very far back ring at Keeneland to when they get inside, you've got about a half hour, so if you see it out in the back, your vet can read your X-rays pretty quickly. They couldn't scope them, obviously. Now the video scope came up, and I'm a big fan of it. I still think there's some tweaks they could do, but it's pretty accurate and you get pretty ethical video there that you can make a decision."

"Technology is not going away," Taylor said. "It's something we need to embrace, we need to figure out how to use it, and we always need to figure out for the customer that's buying the horse, how to make it the best experience for them."