Art Market Report Roundup
ARTSY FOR GALLERIES
AUG 28TH, 2017
The 2017 TEFAF Art Market Report said 2016 was “a year of change” for the art world. When the three other major art market reports—TEFAF Online Focus, Art Basel & UBS, and Hiscox—echoed this sentiment, we decided to explore what this means for galleries. Here are the key takeaways from the 2017 art market reports.
The Big Picture: Online Art Market Thrives Despite Stagnant Growth in the Overall Market
The overall art market slowed in 2016, with global sales down 11% (Basel & UBS). Yet despite this temporary lag, the online art market showed impressive growth with a 15% increase from 2015 (Basel & UBS). In line with this trend, brick-and-click galleries gained momentum—65% of buyers purchased more than one piece of art online in the past 12 months, up 2% year over year (Hiscox).
The US, UK, and China maintained their positions as the predominant global markets, accounting for 81% of total sales by value in 2016. To date, the US market assumed the largest global market share at 40% with the UK at 21% and China following closely behind at 20%.
Coming out of 2016, experts expressed a great deal of “optimism” for 2017 (TEFAF). With online gallery and auction sales rising, 2017 is proving to be a strong year for growth (TEFAF).
The US, UK, and China maintained their positions as the predominant global markets, accounting for 81% of total sales by value in 2016. To date, the US market assumed the largest global market share at 40% with the UK at 21% and China following closely behind at 20%.
Coming out of 2016, experts expressed a great deal of “optimism” for 2017 (TEFAF). With online gallery and auction sales rising, 2017 is proving to be a strong year for growth (TEFAF).
1. Online Sales Continue to Grow
Galleries and auction houses are poised to benefit from online sales as the digital marketplace enables them to connect with a larger audience.
TEFAF Online reported that the Internet is now considered the second most important tool for dealers to meet potential buyers, with art fairs still playing the leading role for in-person connections. This is especially exciting for galleries considering 71.78% of dealers* listed their primary business concern as “acquiring new clients” (TEFAF Online).
Notably, collectors are also coming online; dealers reported that they made 56% of online sales in 2016 to new clients who they hadn’t met in person (Basel & UBS).
TEFAF Online reported that the Internet is now considered the second most important tool for dealers to meet potential buyers, with art fairs still playing the leading role for in-person connections. This is especially exciting for galleries considering 71.78% of dealers* listed their primary business concern as “acquiring new clients” (TEFAF Online).
Notably, collectors are also coming online; dealers reported that they made 56% of online sales in 2016 to new clients who they hadn’t met in person (Basel & UBS).
That said, art fairs remain a key way for galleries to meet collectors. Art Basel & UBS confirmed, “the rise in the number and importance of fairs has been one of the most significant trends in the art market in recent history—[they are an] essential part of any dealers business, [and provide a] substantial increase in access to global buyers and sales.”
Come up with a Strategy for Connecting with Collectors Online
From your Instagram to your website, your gallery should define a comprehensive strategy that includes the spectrum of online platforms. Make sure your gallery’s website is up to date, with high-quality images of all relevant inventory uploaded. Consider partnering with a third-party platform like Artsy to further expand your global network and increase your online presence.
On top of a strong online presence, be sure to attend art fairs that are a good fit for your gallery and put your art fair booth online to reach collectors who couldn’t attend the fair in person.
On top of a strong online presence, be sure to attend art fairs that are a good fit for your gallery and put your art fair booth online to reach collectors who couldn’t attend the fair in person.
Online sales have increased from 4% of the total art market ($1.51 bn) in 2013 to 8.4% ($3.75 bn) in 2016. Courtesy of the Hiscox Online Trade Report 2017.
2. Online Art Platforms Foster Relationships between Dealers and Collectors
Much like online sales, online art platforms grew in popularity this year (TEFAF Online). TEFAF noted that e-commerce is “helping auction houses, dealers, and artists expand beyond the traditional marketplace to reach new buyers and collectors…and that this will likely accelerate.”
When it comes to online art platforms, consolidation and expansion were two noteworthy trends. In particular, the reports called out a few companies that have begun to assume a greater share of the marketplace—including Artsy which has grown by more than 120% year over year.
Find an Online Platform That Works for You and Resonates with Your Brand
Find an Online Platform That Works for You and Resonates with Your Brand
Align yourself with a brand that has assumed a leading position in the field and has strong relationships with established institutions. An online platform will help you reach a wide network of serious collectors. For those who value trust when purchasing a work of art, brand recognition and reputation can hold significant influence over their decision—especially when buying online, sometimes sight unseen.
3. A Change in Collector Demographic is Underway
Like the art market itself, demographics of online collectors also evolved significantly in 2016. Experts reported that a new, younger collector is stepping onto the scene, specifically one that “has come of age buying online” (TEFAF). These collectors, many of whom are millennials accessing a higher income bracket, are digitally savvy and see the online market as their preferred channel to begin building their collection. In fact, a TEFAF survey reported that 57% of Americans ages 25 to 34 are now “comfortable” buying art online. Adapting and catering to this generation’s digital needs will be essential as they become the primary demographic of online collectors (TEFAF).
Cater to Your Collectors’ Needs
Consider transparent pricing (on Artsy you can include a range if you don’t want to list an exact price), increasing your availability to communicate with collectors online, and uploading hi-resolution photographs of your inventory to your gallery’s website or an online platform. Also, be attuned to collectors’ particular points of hesitation when buying works online. Authenticity, condition, speed, and transparency were listed among collectors’ most pressing concerns in 2016 (TEFAF Online).
4. Dealers Deliver Sales Despite Slow Market
Dealers had a very strong year in 2016—sales were up 20 to25% from 2015, which is significant growth considering the downward market (TEFAF). Notably, 34% of dealer sales made in 2016 were to new clients, indicating that dealers’ recent embrace of online platforms is paying off. Experts anticipate sales will continue to move online in the future, so there will continue to be opportunities for galleries to expand their client bases (Basel & UBS).
Additionally, auction houses witnessed a sizable shift from collectors purchasing works through public sales to those soliciting privately brokered sales for acquisitions.
Tap into the Network of Undiscovered Collectors
Make it easier for collectors to discover your inventory online. On Artsy, galleries who properly tag their works will have them surfaced to collectors who are looking for specific artworks based on criteria like style, medium, or budget. The Art Genome Project connects every tagged work in Artsy’s database through a system of characteristics or “genes.”
Listing your works on a platform like Artsy also promotes your gallery in the same space as online auctions. This enables you to upload relevant works during auctions that can attract the attention of collectors following those auctions, especially underbidders. In fact, bidders often inquire about related works by the artist or similar artists in an auction they are watching. This can result in a quick inquiry or sale for your gallery.
Dealers predict that Online (3rd-party platforms) is the sales channel most likely to increase in transaction volume in the future. Courtesy of The TEFAF Art Market Report Online Focus 2017.
5. Instagram Emerges as Leading Social Media Platform for the Art World
This year, Instagram officially eclipsed Facebook as “the preferred social media channel for the art world” (Hiscox). In a Hiscox survey, 57% of art buyers now reported that they used Instagram most frequently, followed by 49% citing Facebook as their preferred platform, a decline from 2016. While these percentages are still tight, this trend shows that galleries should pay attention to the platforms where their collector bases are spending the most time.
Invest in Your Social Media
Social media platforms like Instagram and Facebook continue to play a pivotal role in both networking and sales for galleries, especially as features like Instagram Stories and Facebook Live continue to evolve. For tips on how to use Instagram and other social media platforms like a pro, download our Social Media Toolkit.
Art market experts predict market growth to persist in the coming years, especially in the online sector; Hiscox estimates that in 2021, the online art market will be worth a staggering $9.14 billion. With expectations for the art market to continuing in this trajectory, take strategic and proactive steps to ensure your gallery will be well positioned to make sales online.
If you are interested in learning how Artsy helps galleries connect with new collectors online, visit our Gallery Partnerships page.
*Here, dealers refers to galleries and art advisors
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