2020 – the year of the global coronavirus pandemic. Like many other sectors, the art world had to close down. Museums closed, exhibitions were postponed, no more auctions or activities not considered "essential" could take place. After the shock, you have to reinvent yourself. It's more than an opportunity, it's a must for survival.
And so, even the world of artists and museums began to crank up the engine of innovation, accelerating trends that were still quite niche or experimenting with new ideas that had never been encountered before. The result of these innovations, described in the "Hiscox online art trade report 2020" about the market of online solutions for art, is an increasingly hybrid world where things are likely to be blurred, which is evolving but is also more robust and prepared for future changes. Let's look at how this has happened.
The basic premise is simple: the pandemic has forced the art world to use the internet as the only possible showroom. While online art sales were static in 2019, just imagine that in the first half of 2020 alone Christie's, Sotheby's and Phillips posted revenues of USD 370 million, over five times more than in the same period in 2019. We are not just talking about auction houses. For the majority of operators in this sector, galleries could become key players in the online art world in the near future, and for as many as 67% of platforms, the market will be dominated over the next five years by a few global players.
With everything from museum exhibitions to art fairs and auctions being closed or postponed, the entire art industry has shifted online. It’s difficult to see how, once the pandemic is over, that everything will entirely revert to how it was before. "Social distancing has forced a new form of online engagement which might forever alter the way the art market, and its stakeholders, approach their digital presence," it states in the report. According to the report, fine art accounted for around 32% of online art sales in 2019. At the moment, an ever-growing number of auction houses will be attempting to diversify their client base by also pushing growth in other sectors, starting with the collectibles segment.
Social distancing has forced a new form of online engagement which might forever alter the way the art market, and its stakeholders, approach their digital presence.
In general, 80% of online art sales platforms expect sales growth over the next year. In particular, 65% believe that the crisis will lead to permanent changes, where online business will be a fully-fledged part of the offering from the art market. However, not everyone is in line to benefit from this growth in equal measure. Some platforms will not manage to ride out the crisis (Paddle8, for instance, filed for bankruptcy in March 2020), while, by contrast, the larger players will benefit. For example, Sotheby's saw a 131% increase in sales in 2020, and a 74% increase in prices compared to 2019: good results also related to the prominence of the brand.
While the current crisis presents many new opportunities, there are, however, also some short-term threats, which are highlighted by the report. In particular, the trends for the next five years include: the convergence of the online art market around a few key players, the growing presence of large art galleries as digital players, the development and convergence of the online market around specific collecting segments (photography, prints, furniture, design), the intervention of outsiders that could change the sector forever. Finally, there will also be an increasing blurring between online luxury platforms and collectibles.
But what specific examples are there of innovation that have emerged during the pandemic? The ability to reinvent the art world started, in fact, almost immediately. At the end of March 2020, for instance, Art Power Hong Kong launched online talks, artist interviews, live-streamed gallery tours and visits to artists' studios. This also came about thanks to the collaborations with Big Tech. In the same month, for example, Google joined forces with more than 30 museums worldwide to create a virtual show of Frida Kahlo’s life and work.
Yet again, the use of virtual galleries to showcase artists' works through augmented reality has begun to spread like wildfire. And then came the online fairs to sell the artists' works as a form of mutual aid, like the one organised by the New Art Dealers Alliance (NADA). "Since the COVID-19 outbreak, the art world has seen an amazing amount of goodwill and support, as well as innovation and collaboration, particularly online. Although the new post-COVID art market will not be online only, the art market has finally embraced the digital transformation and is now in a better position to adapt to change in the long term," it states in the report.
Now, with the help of Google, everyone has the opportunity to visit many major art museums from the comfort of their own home.
Among the fairs, for example, Art Basel Hong Kong has been one of the standouts since the start of the pandemic, with 235 exhibitions organised, more than 2,000 works on display and 250,000 visitors in a single week. Auctions have also grown exponentially in online terms. Christie's, one of the first to launch auctions exclusively online in 2011, introduced a private sales facility, making it less reliant on the seasonality and scheduling of traditional auction sales. "Could this be the new trend?" asks the report. The same can also be said for art galleries, which, based on the principle of "viewing rooms", make it possible to communicate a tailored and more personal experience for the customer, while at the same time also approaching the world of auctions through launching specific events.
Finally, the internet has also been a lifesaver for artists. In March 2020, British artist Matthew Burrows launched a pledge on Instagram requesting artists to post pictures of their work for sale under £200 with the hashtag #artistsupportpledge, with the promise to buy another artist’s work every time that any of them reached sales of £1,000. As of June 2020, there were more than 70,000 photos and more than £15 million in sales has been generated.
The means of access also matters. In 2019 mobile commerce accounted for an estimated 40% of online art sales. And what's the biggest restriction? This is a sector which is still seeking a cost-effective, simple and reliable shipping solution.