1. An Introduction to the Online Art Market
The dominance of e-commerce in all areas of the retail industry has become commonplace for the 21st-century consumer. As a result of living in an internet age, buying product digitally has become second-nature, with the purchase and sale of items from the mundane to extraordinary occurring in just a few clicks and keystrokes. It stands to reason, then, that the fine art market would find itself moving towards digital salesrooms, given public excitement for e-commerce and its increase in reach, bolstering audiences and appealing to a younger demographic who may be more technologically comfortable. The art market has time and again found change in how art is sold necessary to expansion; from the 19th-century salon to the 20th-century commercial gallery, many view the online art market as a continuation of this historical adaptability driven by consumer interest and participation. But just what is the online art market? Understanding this intimidating trade is best achieved through an exploration of the online art market’s recent history.
Online auctions find their roots in digital sales dating more than 20 years back, with most international top-tier auction houses possessing a previously-established schedule for online art sale. In the years prior to 2020, however, the fine art market was often characterized as “stubbornly resistant,” to the influence of e-commerce, with online transactions amounting to only a tenth of total global art market value. Of course, like much of what we understood to be “usual,” the online art market was transformed by COVID-19. Social distancing and quarantine measures greatly reduced capacity for in-person art sale, entirely closing the majority of public salesrooms and art fairs. Consequently, many auction houses, dealers, and galleries found themselves turning attention to their e-commerce efforts to continue operations, strengthening the online fine art market as a result.
“The Art Market 2023,” a report distributed by Art Basel and UBS, authored by notable economist and art market researcher, Dr. Clare McAndrew, asserts that though total auction sales value at major auction houses decreased by about 30% in 2020, online-only sales increased by 455%. By 2021, online-only art sales totaled $1.4 billion in value among auction houses Christie’s, Sotheby’s, and Phillips. Overall, market sale value increased following the pandemic, amounting to $65.9 billion total in 2021. This increase in art market sale value has persisted into 2022, reaching the second-highest value reported in the last 15 years, providing evidence that, though the market may fluctuate, it displays a stalwart capacity to adapt and adjust. This strong recovery in auction sales was, according to McAndrew, “[aided by] the seamless rollout of supply though online platforms,” integrating digital elements into even live sales events, including opportunities for buyers to engage via livestream and online bidding.
In 2020, 65% of the total number of auction sales taking place were digital, but even following the re-establishment of live sales in 2021, there are still twice as many online sales as prior to the pandemic. Online art sales account for “just over half the sales that took place,” among the auction houses Christie’s, Sotheby’s, and Phillips, according to Art Basel’s report. The online art market is considered to be more approachable than the traditional market given the scale of works available for sale, with the online art market focusing on lower-value art sales in the $1,000 to $50,000 range, making digital market spaces a better option for emerging collectors. Though the online art market was bolstered by and further established during the pandemic, it provides opportunity for sale that has proved profitable and effective, ensuring that this digital marketplace is here to stay.
2. Approaching the Online Art Market
We’ve established the online art market as a new avenue for art sale that has allowed for further-reaching global engagement as auction houses expand to address digital bids, host entirely virtual auctions, and showcase work in digitally curated environments. The online art market has carved a niche opportunity for sale that is distinctly modern and indicative of its longevity as digitization and the virtual world increases in importance for all areas of commerce. Collectors, possessing a natural aesthetic instinct, find themselves limited by the network of often-intimidating auction houses and established galleries of which the art market is formally constructed. The online art market provides collectors with an entry point into the art market, largely diminishing traditional barriers commonly associated with the art market. Issues of transparency, access to information, and locational constraints placed on collectors are negated by the global network inherent to the online art market’s structure and function!
Though the art market has been historically characterized as “opaque,” many find that the 21st century online art market’s recent expansion has provided a variety of new resources for greater visibility, allowing emerging collectors to better assess value and find works which are the best fit for their collection. Opportunities for public introduction to the art world are plentiful in the online art market, with digital spaces like online preview rooms and third party platforms for auctions becoming more commonplace. Collectors are able to view and engage with artists, galleries, and works which may have been previously inaccessible. The internet’s global nature introduces collectors to creatives far outside the usual reach of one’s local gallery, increasing convenience and providing collectors with better resources to build a collection, ignoring the limits of location.
Another unique and notable facet of the online art market is the price database which provides collectors with a baseline for understanding a work’s value. This access to contextual information through these digital databases drastically increases trust between art institutions and these emerging connoisseurs who hope to engage with the art market. Research finds this trust is essential to the online art market, serving to expand market reach, with 90% of these new buyers asserting that the ability to compare art pieces is “essential.” Though the art market’s expansion into a digital space has greatly improved the availability of data and served to further streamline these purchase and sale processes for an emerging collector, easing a consumer’s engagement with the online art market through professional intervention remains the best option for approach. These available price databases often proffer an overwhelming amount of information, making valuation intimidating for individuals looking to perhaps insure their collected work(s), mange their estate, or even acquire new works for an established collection. Furthermore, though these price databases may be publicly available, collectors often question how to best apply the information so readily provided.
Market knowledge, art historical information, and connoisseurship are all essential to effectively assess a work for acquisition or divestment. This includes an ability to monitor the art market’s evolution over time, something which may be indicated by historical data but may prove inscrutable to an everyday researcher. Often, an art appraiser is able to provide guidance to a collector, serving an essential purpose: art appraisers are able to translate necessary information into language understood by those outside the art world. Thus, art appraisers are able to facilitate a better understanding not just of the art world, but of the works they are appraising, allowing for their clients to better appreciate the work and act as well-informed market agents.
Prior to the prominence of the online art market and the transparency it provides, collectors were often left vulnerable, imbalanced in their knowledge of the art world comparative to the market actors who aided in sale or acquisition processes. The open availability of information brings consumers inclined to research to a more equitable sales floor, able to act with more knowledge than previous, thus imbuing collectors with more confidence and reducing risk-averse behavior. Further bolstering this confidence are art market professionals, who embody the necessary skills needed to most effectively engage with the art market through both digital and tangible avenues. Though collectors have greater access to information through the online art market, appraisers are able to further increase consumer comfortability by functioning as an intercessor, familiar with market vocabulary, and able to more efficiently assess and interpret current and historical market data.
The online art market has established its presence in the art world as an essential way for global collectors to engage with the viewing and sale of work previously unreachable. This move towards digitization has further resolved previous barriers to entry that collectors have faced when attempting to break into this market, allowing for greater transparency and risk analysis while increasing the available quantitative data. Though the online art market operates in proximity to familiar avenues of e-commerce, it presents unique challenges in the form of qualitative research and price valuation that often demands the intervention of an expert. Approaching the online art market as an emerging connoisseur and established art lover supported by knowledgeable advisors and appraisers familiar with market language and conventions facilitates the success of any collector; well-informed and prepared for challenges posed by the art market.
Article by Astrid Bridgwood