ONLINE ART ACQUISITION

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Understanding a growing trend

The analogue world is in decline. Even art, the most tangible and tactile of media, is no longer immune to consumer-driven demand for keyboard convenience.

Whilst there’s certainly a place for traditional galleries where connoisseurs, buyers and admirers can interact personally with the work of artists, the growing trend toward online galleries and e-commerce now holds a significant slice of the sector.

Even as few as ten years ago, this would have seemed an unlikely growth market. Art is, by nature, intensely personal. Even if it can’t be touched, it demands to be seen ‘in the flesh’ and in the best possible light – literally. 

The commercial opportunities that online galleries and sales sites offer now in relation to the marketing and sale of exclusive artworks at £100,000+ transcend ongoing concerns around provenance, fraud and security that were the original barriers to entry into the market.

So, what’s driving growth and where does that leave traditional galleries that eschew digital platforms in favour of a traditional and time-trusted approach to both showing and selling the work of their artists? How will online galleries change the landscape for buyers and artists? And what will the art world look like in five- or ten-years’ time?

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Is growth the product of learned behaviour?

If necessity is the mother of invention, then it could be said that social change is the mother of innovation. We invent to meet need. We innovate to meet demand.

We’ve been able to buy goods online since the mid- to late-Nineties. Product and service retail as an online sector is one that’s now been around for 20+ years. Yet its growth has been incremental. 

In 1997, buying a CD online from America for $8 was one thing. Doing your banking online would have been inconceivable – not because it wasn’t technologically possible, but because, as consumers, our habits were different. We knew and trusted visiting a branch and talking to a member of staff.

Consumerism relies on early-adopters to drive take-up, and the reality is that some areas of consumer behaviour require more courage than others. 

Buying an original piece of art for less than £100 has been pretty commonplace for a long time now. Spending £50K, £250K or more on a piece you’ve only seen on a computer screen takes a leap of faith that, until now, has not been for the faint of heart.

As humans, we’re programmed to follow the example of others. We’re happier in a herd. In that context, it’s not difficult to see why the growth of online galleries selling high-end works has only happened relatively recently compared to other retail sectors. It has needed the innovators and the early-adopters to put their trust in instinct and believe a market could be developed.

And the innovation hasn’t stopped there, of course. Those concerns over transparency, fraud, trust, provenance and good faith transactions continue to benefit from the development of demand-driven technology that makes the consumer experience safer and more rewarding.

Much as artificial intelligence can now use your online habits to learn what content to put in front of you, so the AI being built into online galleries is designed to navigate you to highly-desirable work you’ll want to own in fewer clicks.

As with all technology, once the genie is out of the bottle, it’s impossible to put back. Until 2012, the only way to be driven around London safely was in the back of a black cab. Seven years later, we can’t imagine life without Uber. It’s such a part of the new cultural DNA that it’s become a verb. 

In the same way, now that it’s started, the digital revolution in the fine and high-end art sector is irreversible – the only question that remains is to what extent it will squeeze traditional galleries housed in physical spaces.

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Is it the beginning of the end for traditional galleries?

The short answer is no. 

When vinyl recordings were introduced, it was impossible to imagine any sort of technology that might replace them. Yet only a few short years later – the blink of an eye in human chronology – we’d seen cassettes, CDs, laser discs, minidiscs, mp3 players and downloads render them virtually extinct.

Yet, here we are in 2019, more than thirty years after Dire Straits’ Brothers In Arms became the first CD-only release, and vinyl is back in a big way.

What do we learn from that? While we can never say never about future tech, the life cycle of vinyl suggests that for all that we devour convenience, we also require a human experience that technology is unlikely to replace or adequately replicate.

For bricks-and-mortar galleries, there will always be a demand to be close to the art of artists. The question is whether that demand will be sufficient in and of itself to drive sales at a level that propels turnover to meet overheads and generate profit.

More likely is that the smart high-end galleries will evolve their online proposition in a way that allows them to downsize their physical presence into smaller spaces that become literal shop windows for their e-commerce business. In this way, they’ll likely showcase smaller collections that serve as an amuse bouche for the digital banquet at the back of the shop.

E-commerce in art is already big business, after all. More than £119m was spent at online auction with Christie’s alone between January and June 2018. Recent survey numbers are also compelling, with 47% of big-spenders having made an online purchase within the preceding 12-month period. 

More than 50% of big-spenders – defined as those spending more than £100,000 on art – visit online galleries multiple times a week. Growth in this sector is spectacular – rising 30% year-on-year. (Source: Art Market Guru)

That being the case, how existing traditional galleries manage the seemingly-conflicting demands of traditional audiences who are prepared to spend big money via e-commerce will largely dictate the fate of individual businesses. But the emergence of online galleries should not necessarily spell the end of those traditional platforms.

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Online galleries as a marketing tool for artists

One of the biggest opportunities that online art galleries present is for the artists to promote themselves and their work directly to a buyer’s market that is already warm to them.

With the proliferative growth of social media and savvy users comes the chance to speak directly to the people you want to touch. That’s a powerful tool.

And that’s not just about artists selling original work with a price-tag to suit; it’s about devolving their work in such a way that puts it within the reach of people who will become fans but who might otherwise never set foot inside a ‘proper’ gallery.

This offers artists the scope to develop a different commercial model that drives brand recognition, loyalty and advocacy through more versatile product and merchandising development and evolution and, as a result, pricing strategies that allow anyone, anywhere to own a version of their work.

That will look like an attractive win-win for artists who currently rely on a gallery to sell work on their behalf through bespoke exhibitions or catalogues in return for a significant commission.

It doesn’t take a degree from LSE to see why growing your consumer base through better product diversity and reducing your cost per sale in the process has the potential to generate a better bottom line.

Online art galleries are here to stay. How traditional galleries fare as a result will largely be determined by how they augment and respond to that competition.

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