The art market is unusual. It’s a vast $64bn market (The Art Market 2018, Art Basel & UBS Report) that is highly fragmented, despite a set of wildly successful and world-famous institutions including Sotheby’s, Christies and ‘mega-galleries’ such as the Gagosian, David Zwirner, Pace and Hauser & Wirth.
In 2019, it remains a relationship-driven industry and one that is unregulated, even with increasing sale prices at the top end of the market, and a growing acceptance of art as a new and distinct asset class. With only 8% of sales online (Art Basel) and rising costs of retail real estate disrupting the traditional gallery model, there is the potential for real shifts to occur in the art market.
What technologies should collectors and investors be looking out for?
More online sales
As the cost of retail real estate has increased in major cities, including London, the traditional gallery model has become difficult to sustain. Middle-tier commercial galleries have a shrinking square footage to work with and need to sell more works to survive. This means fewer shows with fewer artists, and globally, more gallery closures than openings.
A collection of online retailers such as 1st dibs, Artsy, Saatchi Art and Art Republic have stepped in, catering for buyers of print editions by emerging artists to those seeking a Warhol or Jeff Koons. Website builders like Wix have made it easier for artists to create and manage their online stores and Instagram, in particular, has made it possible for collectors to discover and then engage with artists directly.
Four out of five of art buyers under 35 years old use Instagram for discovering new artists (Hiscox Online Art Trade Report 2018) and it’s a key tool for reaching consumers beyond the traditional art market. Artists and galleries are sensitive to Instagram’s importance: artists might adapt works to suit the dominant square aspect ratio, while galleries may install Instagram-friendly lighting.
Online retailers use behavioural economics and psychology to influence consumer behaviour and we should expect this to move into the online art market too.
One example of this that we’ve seen at Tagsmart is shrinking edition sizes: in the past, edition sizes would often run to 250 and above but many artists are shifting towards editions as small as 5 or 10.