Art Market and Its Segments
ART MARKET AND ITS SEGMENTS
After a year of online innovation sparked by the pandemic, the industry looks very different.
“Imagine a world where you could not fly around the globe anymore. How would you conduct business?
The pandemic thrust the still-analog art world farther into the virtual realm than it had ever been-or expected to be.
As with any kind of evolution, natural selection has been kinder to some segments of the industry than others. For example Art fairs have suffered dearly-and a rocky vaccine rollout pushed their return in 2021. (Art Basel, widely expected to be the first major international fair of the post-lockdown era, announced in mid-January that it would postpone its Switzerland edition another two months, to September).
Whether this all-remote moment has bruised businesses´ bottom line, it won’t last forever. And the art industry-like all industries-is starting to process what a hybrid virtual-IRL future might look like. Here is a breakdown of how four major segments of the sector will evolve. One thing is certain: There is a whole lot more room to innovate in a post-lockdown world than there was before.
Galleries
The pandemic has cemented the necessity of having a digital footprint- but readers plan to be extremely judicious about where they put their dollars going forward.
What’s Changed
Dealers can no-longer put off developing a digital strategy. An advice will be to have a cohesive hybrid, then you’re just not going to be relevant.
That realisation has resulted in the reallocation of resources. There’s no time like the present, since, for once, art-fair costs are not eating into budgets.
Another Bonus
Artists no longer see a digital show-cases as the equivalent of being stuffed into the storage.
What Will Stay the Same
In-person visits remain important.Viewers, it seems, have doubled down, too. For example the ten thousands of dollars banked from not doing art-fairs freeing up top focus on the program as opposed to focusing on the hustle.
What’s Left to Innovate
Secure digital infrastructure and online vetting programs will be more important than ever, given the rise in a e-commerce, especially as dealers transact with new clients and governments like the UK and USA tighten oversight systems to adhere to Know Your Client and Anti-Money Laundering rules- not to mention cybersecurity-will be a high priority this year.
Auction Houses
While auction houses nimbly met the challenge of creating exciting and successful live-streamed sales, the future of the market will-as always-hinge on supply of good material.
What’s Changed
The typical auction schedule historically centered on two weeks of megasales in November and May in New York, but after a year of anything goes, auction executives feel empowered to postpone based not only on public health but also on political events (like the presidential election) and the availability of material.
Not everyone is pleased with this development. For example clients were happy to have the opportunity to buy and sell in December before the Biden administration could tinker with the tax code. It’s very hard to track when you’re used to traditional schedule- it felt a little scattered.
What Will Stayed the Same
The need to balance supply and demand is an enduring puzzle no matter when or where sales are taking place. In 2020 supply was the issue and demand was strong, since so many would be sellers put their plans on ice. But that may change in 2021: Some collectors will have to downsize for estate purpose, while others may be encouraged by surprisingly buoyant results. The next problem will be figuring out what to jeep funnelling into online sales when live auctions return.
Lasting Hybrids
Client relationship will follow a new model-for good. For example pre-pandemic behaviour was throwing open the doors to an auction preview after months of preparation and business getting.
Champagne and gossip would flow.
Last year what happen was giving more “walkthroughs” via individualised FaceTime Tours, for example to clients cozied up in front of their fireplaces in Aspen or perched in their backyards in Palm Beach. But on the other hand we don’t worry about wearing nice shoes!
What’s Left to Innovate
The drama of quarantine prompted unlikely collaborations between fairs, dealers, auction houses and even luxury brands. For example Bulgari sponsored Sotheby´s Old Master Week in January, outfitting the auctioneer and staff in the brand’s jewels. Now, that the borders have been breached, look out for more partnerships like those of Christie´s with China Guardian called 2020+ events and Phillips with Poly in Asia in Beijing, as well as auction-art-fair hybrids like Christie´s recent project with 1:54 contemporary African art fair based in Morocco. When the market is shrinking , when fairs are canceled, there is a mutual interest in collaborating to keep the market alive. Collaborations are already effective. The challenge is to make them more frequent.
Appraisers
If any art-market players could be declared winners in all this upheaval, it would be the appraisers. Collectors took advantage of the lockdown to update insurance policies, use art as collateral for loans, and get a jump on financial planning-all of which requires these specialists´ expertise.
What’s Changed
Pricing is more transparent. Instead of having to scour art-fair aisles and awkwardly interrupt gallery directors to ask for prices, appraisers were able to suck up copious figures with a strike of the keyboards to track the so-called “comparables” they use to determine fair market value.
Primary market information is particularly valuable in the postwar and contemporary art sector, where, as appraiser put them, because prices change dramatically, in a very short time, on a regular basis.
It is no exaggeration to say that increased price transparency- a trend that fair organisers and dealers agree is likely to continue beyond the pandemic-has allowed experts to beef up their spreadsheets in a way that will serve the fields for years to come.
What Will Stay the Same
Dealing with collections of a certain scale continues to be a challenge, pandemic or no pandemic. For example with a estate appraisal at a gallery-with a total of 850 works- appraisers will ask for a smaller sampling based on what art handlers were able to bring out at one time. Digital images had to suffice for the rest. Nevertheless no matter how high the resolution is on a digital image there still remains a limitation in the viewer ´s ability to absorb the entire work as one would if they were seeing it in person.
What’s Left to Innovate
A comprehensive way to capture both primary and secondary market pricing is needed in an increasingly fast-moving landscape. While online art fairs have made primary prices somewhat easier to track, the increased volume of new formats for online auction sales have resulted in increasingly obscure public results. Not only are lots that fail to meet their reserves left out of public records, but a growing number of works are being withdrawn on the day of the sale because of a lack of interest, making the true level of demand difficult to discern.
Art Fairs
Of all the sectors in the art market, art fairs have arguably been hardest hit. Without a physical gathering space or event-driven demand, the works will not be sell.
What’s Change
It was a long an open question whether art fairs could translate the social shopping experience to the web. Now, I have the answer: No. A scant of 10 percent of collectors bought work from online platforms “often always” during the yearlong period ending August 2020, according to a recent survey.
After more than a year of adapting to a Fairless environment, expect dealers of all sizes to get selective about which events they take on. Two years ago, the regular schedule form was fairs in Europe, Asia, and Latin America, as well as four in the USA. Now the tendency concern in two fairs: USA and focusing all our foreign efforts in Asia!
What Will Stay the Same
In-person experiences are still the best way to drive commerce. Client engagement regeneration (comes from) getting in front of new people. For example, Art Basel Hong Kong offered dealers who might be stymied by travel restrictions the opportunity to keep their galleries front and center by taking out a smaller space manned by Art Basel staff member for a reduced price, these are call it a “ghost booth”. In a nod to the importance of human contact, the fair mandated that the events full opening hours, time difference be damned.
What’s Left to Innovate
Just as Blockbuster´s failure to translate to the web opened the door for Netflix, the face-plant experienced by online art fairs has created an opportunity for other art e-commerce models to fill the breach.
Fairs are now sorting out how to offer a scaled-down physical experienced -supplemented, rather than supplanted, by a robust virtual program. It is time to think in a total redesign.What size of fair? Do we almost go back to 2011 levels? Thats means going back to the year first event.
To give an example I can mention the Outsider Art Fair, found success in Paris with an IRL exhibition curated by Alison Gingeras featuring highlights from exhibitors, who showed their full offerings online. Finally digital and offsite programming inclusive with small in-person event will be the future in this market.
Nely L. Friedrich
9. March 2021
