Advances in technology are steadily making the art market more accessible and transparent.
At Artwork Archive we work with collectors from around the world managing their collections. We’ve noticed how technology is affecting how art collectors acquire and protect their treasured investments, and how it is affecting the art world at-large.
Millenials are changing how art is bought and sold.
According to U.S. Trust, millennials are the fastest growing group of art collectors (though they still represent a small sliver of sales). Consequently, at Artwork Archive we’ve seen a 25% increase in Millennials creating Artwork Archive accounts to organize and manage their art this year.
Millennials are treating art as a financial asset. The generation is three times more likely than baby boomers to sell works they’ve collected (a striking 85% compared to 24%), and are more comfortable using art as loan collateral.
This young demographic also has a strong desire for a more liquid art market. Statistics from Arts Economics show that works of art under $50,000, which account for 89.5% of the market, are the most liquid segment.
From U.S. Trust
Mobile commerce gains further traction.
The use of mobiles to buy art has increased significantly in recent years, rising to 20% in 2018 (up from 4% in 2015).
The rise in mobile usage is in line with the near doubling of mobile web traffic from 2014 to 2018.
Cryptocurrency rises, then quickly falls.
Cryptocurrency and blockchain had the potential to disrupt the art market with taking money and power away from large, established, centralized institutions and moving towards a more decentralized model—empowering users with transparent, direct peer-to-peer payments.
This year, questions were asked how cryptocurrency would affect auction houses as they act as trusted intermediaries between buyers and sellers, much like banks. Without centralization, anyone can buy and sell art, and cryptocurrency creates a new value for art.
What was concluded was cryptocurrencies are highly volatile, and art businesses hesitated to embed blockchain technology. In 2018 only 7% of online platforms accepted cryptocurrencies as a payment method.
Until cryptocurrencies can achieve price stability, they are a challenging exchange medium in the art world because the currency risk associated with them.
More collectors protect their artworks as natural disasters make destructive impact.
Our Artwork Archive collector client base increased 46% in 2018.
One of the factors leading to this growth was the natural disasters of 2017 and 2018. The disastrous fires in California, monstrous hurricanes on the east coast, and flooding in Texas made protecting artworks top of mind.
For instance, Hurricane Maria in Puerto Rico had significant costly effects on cultural resources. FEMA reported that $790 million dollars was spent on historic and cultural preservation.
People are being more conscious about insuring their artwork, and want vital information and informative reports easily accessible in case disaster strikes. Meaning art collectors are turning to online inventory systems to keep their records safe and on hand.
Collectors are buying more artworks sight unseen.
The growth of millennial collectors can be attributed to more accessible and democratic platforms such as Paddle8, Artsy, Uprise Art and Artwork Archive’s Discovery platform offer a variety of price points. Uprise Art is geared towards matching emerging talent with a “new generation of collectors” with a body of work for less than $800.
Artwork Archive’s Discovery platform gives art officiendos the freedom to peruse artists by price point, geography, medium, and even orientation. Looking for a square piece for your living room wall? You can set a filter for that.
And much of this online purchasing is happening on Instagram.
Collectors have been turning to social media channels like Instagram to find new art. According to an April 2015 Artsy.net survey, 87% of surveyed art collectors look at Instagram more than twice a day. What’s more, 51.5% of these same collectors have bought artwork from artists they originally found via the app. With over 1 billion users, Instagram reaches consumers beyond the existing art market.
There’s plenty of fodder with 90% of galleries actively using social media to promote artists.
Instagram’s introduction of a shopping feature in 2017 helped boost its use as a marketplace. And in 2018, Instagram expanded its shopping feature to Instagram stories. Businesses can now tag products so that a single click on “Shop Now” will send potential customers to a website to make purchases.
Artwork Archive's Instagram account showcases a variety of artists that can appeal to a wide range of collectors.
Consequently, online sales are up 12%.
But, the annual growth rate of online sales is slowing. Online market sales reached an estimated $4.22 billion in 2017 (up 12% from the year before) but that was lower than the 15% year-on-year growth in 2016, and 24% growth rate experienced in 2015.
Is this due to the fact that loyalty seems to be an issue with 43% of galleries admitting that repeat online buyers are rare? Despite the fact that most of their online buyers are new (73% said so).
Will online sales plateau? 2019 may tell us.
Artwork Archive's Discovery platform showcases artistic talent from around the world.
Technology creates a more accessible global marketplace.
Almost three quarters (70%) of galleries this year sold their artworks online to international clients—up from 54% in 2017.
Transparency in the art market is increasing, but still has a long way to go.
The traditional art sales process is riddled with secrecy-driven elitism. Many are arguing that transparency needs to be more prevalent in order for the arts to grow in a healthy way.
According to the Hiscox online trade report 2018, “In a market where everyone haggles on price, it must seem like too high a mountain to climb to publish your best price first, as we see and expect in so many other areas of online shopping.”
Although the art market is notoriously opaque when it comes to revealing prices, 88% of online art buyers find transparency an essential ingredient when buying art online.
Prospective buyers want to be educated.
The Hiscox online trade report also states that prospective buyers don’t just want data; they want to be educated on the market, and attribute value to the educational experience. In 2017, 52% of online art buyers stated that content is important to their platform choice, (up 24% from 2016).
Online platforms like Artwork Archive’s Discovery enables galleries and artists to share their prices, along with other informative details. Interested buyers can quickly learn the artists’ story and see bodies of work with a click of a button.
What conclusions can we draw?
Technology continues to touch more and more aspects of the art market.
Arguably, technology is improving the art world. It is generating transparency, access, organization and protection. But, many aspects of the art world are still hesitant or unable to jump into this nontraditional mentality.
The art world is becoming more accessible to a wider, younger, global collecting class thanks to the growth of innovative e-commerce and online inventory platforms.