We buy everything online today, is it also true for art? This is what Hiscox set out to find. The answer is obviously complex, with the insurance company stressing the elusiveness of a market that has yet to grow to its full potential. Since 2013, Hiscox publishes an annual review of the online art trade, based on surveys and a large international study. This year’s edition introduces some new topics such as blockchain and cybercrime and reinforces data from past years.
The market is growing, albeit at a slower pace
Let’s start with basics, and the metric every dealer is looking at: growth. While online sales were up by 12%, reaching an estimated US$4.22 billion in 2017, the growth rate was slower than in previous years (15% year-on-year growth rate in 2016, 25% in 2015). The industry analysts attribute this slow-down to a series of bottlenecks, from the difficulty in acquiring and retaining clients, to the struggle to go digital for smaller actors such as galleries. The future growth rate estimate is still a promising 15%.
Another finding regarding the future of the online art market … is that there is no consensus yet on what it will look like. While consolidation to a few global platforms is expected (and ongoing), a third of respondents think local platforms will dominate, and another third are convinced that the market will remain category specific. The game is on!
The key challenge: getting collectors on board
What does the typical online art collector look like? Drawing from a survey of over 800 international art collectors, the report is able to draw an interesting portrait. 65% are under 44, with a growing percentage paying an average price of over $5,000 per fine art object (25%, up from 21% in 2017). Three quarters of online-art buyers acquired more than one object online in 2017, often expanding the range of artworks and collectible they buy. This recurrence and curiosity are good news in the face of an overall decline of people buying online: 43% art buyers made business online in the last year, down from 49% in 2016.
The report identifies a few steps that can be taken to increase customer conversion and loyalty, the top two being price transparency and security. Social media is a key component of sales strategy now, as the rise of Instagram settles its dominance as the preferred social media platform of art buyers. The report also finds that customers are increasingly channel-neutral, with 41% of buyers expressing no preference for a specific channel of purchase – either online or offline. Drawing on this trend, third-party marketplaces and aggregators are gaining popularity.
Barnebys fits right in this new globalized market, as it lists thousands of auctions – 600,000 to one million searchable lots in total! Prospective buyers therefore have access to a centralized view of offerings from auctions houses and dealers, and they can also consult a free database of more than 46 million realized prices going back to the 1980s.
