The global art market was hit hard by the Covid-19 crisis. Art fairs, galleries, auction houses and museums are social environments, often indoors. Many were forced to temporarily close, and it is uncertain when or if they will reopen. To minimize the damage mandatory shutdowns are having on art sales, the industry needs to reinvent itself by going virtual.
This is not a new problem. Overall, the art market recorded a 5% drop in sales worldwide in 2019. In recent years, rising geopolitical tensions have weighed on art sales, particularly in the United States, United Kingdom, and China account for four-fifths of the value of global art sales. For the art industry, showcasing art that appeals to Millennials and Gen Z through the channels that they engage with is critical to its future survival and growth.
According to the Art Basel and UBS Global Art Market Report, the Chinese market fell by 10% last year, penalized by the trade war with the U.S. and an economic slowdown due to the protests in Hong Kong. Hampered by Brexit, the art market in Great Britain fell by 9% during the same period. Other countries sought to fill the void; France is positioning itself as a doorway to art sales in the rest of the European Union in the wake of Brexit, and gained much of the U.K.’s losses with a 7% increase in sales.
One of the innovative approaches they have taken is the creation of online art galleries. Making art galleries virtual opens up access to the art market to an increased volume of customers, while simultaneously allowing the industry to continue to flourish in the aftermath of the pandemic. In addition, a comprehensive digital and marketing communications strategy can help art galleries to get their message to a broad range of customers, including Millennials and Gen Z.
Showcasing Art That Appeals To Millennials
The Covid-19 crisis made an existing problem more apparent: the art industry has to accelerate its digital transition to attract younger generations. Millennials have overtaken Baby Boomers as America’s largest living adult generation, and their spending power is projected to reach $1.4 trillion by the end of 2020. To do appeal to this growing audience, art galleries and auctions need to communicate with Millennials and Gen Z to highlight art that appeals to them.
According to the Hiscox 2018 Online Art Market Report, 57% of the time spent by Millennials on social media is on Instagram, where 79% browse to discover artists and 82% follow and admit to being influenced by the artists they follow, including galleries, museums, auction houses and fairs.
Online art purchasing is particularly popular among Millennials who are less familiar with the market codes. They appreciate the anonymity offered by the web, the transparency of the information available online (especially the price), and that they can decide what to buy at their own pace. Creating digital communication channels for art that appeals to Millennials can help art galleries and fairs to increase their sales and overall relevancy to this emerging market audience.
Growing Trend in Virtual Art Galleries and Auctions
Some museum and art fairs are already digitally available. In late March 2020, Art Basel Hong Kong set up a platform on which 230 galleries were able to offer 10 works of art each. David Zwirner sold more than $6 million of art pieces, including works by Luc Tuymans and South African artist Marlene Dumas.
This trend accelerated during the Covid-19 lockdowns. For example, Art Paris was supposed to be held in early April at Grand Palais and is now being offered as a digital version open to the public. Thanks to the technology of the “Online Viewing Room” tool, Art Paris offers a 3D immersion visit of the 150 art galleries that were expected. 3D virtual tours are a great alternative to physical galleries as it can help to create a connection with the audience, still provide visibility to the artists and encourage the collectors to buy art.
Although virtual art galleries provide an enormous benefit to the global art industry, they are not without challenges. The ability to judge the quality and value of an art piece comes from familiarity with a particular artist and the industry as a whole. Newer patrons of the art world may be less acquainted with an individual’s body of work and may not be well positioned to confidently purchase a piece without seeing it in person.
Moving art galleries to a digital space also opens up the industry to fraud. It may see an influx of scams targeting high-net-worth individuals who might believe they are buying an artwork in a legitimate auction, only to find later that it was a fake.
How To Attract A Bigger, Global Audience
There is a lot of uncertainty surrounding the future of the art market. According to London-based research firm ArtTactic, the most up to date confidence reading for the art market is a 6.4 on a scale of 1-100. This is the lowest reading recorded by their survey since its inception in 2005 — even lower than during the 2008 Great Financial Crisis. It will take some time for confidence in the art market to be restored and buyers to return.
In order for the art industry to survive in a post-Covid world, therefore, it must continue to innovate and find new ways to make art accessible, especially for Millennials and Gen Z. Online art galleries and auctions appeal to these groups because they democratize art purchases and offer more transparency in art pricing. Combined with a digital marketing and communication strategy to increase brand visibility, galleries and auction houses can effectively capture market share of a new customer group and emerge post-Covid stronger than ever.