David Rosenblatt: So just as a reminder, the primary strategic goal of auctions on the demand side, in particular, is to increase new buyer conversion rates. Again, as I mentioned in the script and the answer to the first question, returning buyer conversion rates have been relatively healthy and resilient. New buyer conversion rates have been very soft. The primary reason for softness in new buyer conversion rates has to do with some version of price for the most part. In auctions, of course, are the most efficient vehicle for addressing that. What we saw in the fourth quarter, we did see softness in terms of overall GMV growth. That said, in terms of consumer behavior, what you asked about, Mark, what we saw actually was somewhat parallel to the marketplace as a whole in the sense that top of funnel metrics were strong.
Engagement metrics, like the number of bidders and the number of bids grew double digits sequentially Q4 over Q3. And it is delivering on the strategic goal. So again, we see activation rates of new buyers 2 times to 3 times higher than those of the marketplace. And importantly, what we’ve seen is the consumers that are activated through auctions are roughly 35% more likely to make a repeat purchase versus consumers who activate through the marketplace. I think the – again, as we said for a couple of quarters, the biggest opportunity is to unlock growth are: one, awareness on the demand side. We’ve been in the business for 20-plus years, or we were in the business for 20-plus years without having an auction platform. So it takes a lot to undo that.
And then secondly, on the supply side it’s getting sellers to and kind of educating them to price effectively for auctions. And I would say on that, there’s an embrace and a willingness to support the auction format itself. So just getting sellers to list items in auction has not been a particular challenge due in part to the efforts of the folks we have on our team who manage those relationships. What I think, again, we need to do a better job on is educating our sellers to price as effectively as possible. And again, the reason for that is, in auctions, as we all know, the – you start low on the theory that the price will go up. The way our non-auction marketplace works is the opposite. Sellers tend to start high because the large majority of confirmed orders are negotiated.
So they price expecting that to come down, which is the opposite of the behavior that’s required for a healthy auction marketplace. So it’s a work in progress and – but that is our primary goal.
Mark Mahaney: Thank you, David.
Operator: Thank you. And one moment for our next question, please. And it comes on the line of Nick Jones with JMP Securities. Please proceed.
Nick Jones: Great. Thanks for taking the questions. I guess just kind of going back to AOV levels that are, I guess, coming down and that brought a number of people on the demand side who may be engaged with the platform. And what level do you guys see AOV shaking out over time? And should that be kind of in perpetual pressure from here as we think about our models?
David Rosenblatt: What we’re seeing – first of all, we have seen a worsening of AOV each of the last 4 quarters. And interestingly, if you look at our performance in Q4, order volume was down 5% year-over-year. So the balance was AOV, which gives you kind of a directional sense of the impact on our GMV performance. And again, we’ve seen that trend continue to soften. On the other hand, we’ve actually seen the number of orders at the very high end, over $100,000 or rather the GMV from orders over $100,000 increasing. So that grew 10% in the quarter. So we are seeing this barbell effect Overall, the percentage of orders in the marketplace that are $1,000 and below increased from, I think it was 44% to 47% in the fourth quarter.
