The Online Art Market 2013
Two of the most important factors to maximise the opportunity for a successful online sale are the reputation of the seller combined with a strong visual experience with well presented information.
Hiscox, a leading insurer of galleries, auctioneers, collectors and museums worldwide, published a report last month (9 April 2013) by analysts ArtTactic on The Online Art Trade 2013.
The report examines the buying patterns of established art collectors and general buyers of art and how they are responding to the online market. It explores the confidence today’s art collectors have in buying artwork online as well as the opportunities this brings to auction houses, galleries and dealers.1
This report tells us that trading online is now an established and accepted way to buy and sell art and that for businesses wishing to maintain the competitive edge, increasing their accessibility will be essential for future growth.
- 71% of art collectors have purchased artwork based only on a digital image site unseen. 2
- 25% of established collectors are spending a staggering £50,000 or more in this way.
Not surprisingly, the main concerns that collectors have when buying art online are related to issues of provenance and authenticity which can prove to be real barriers to some. Trust is fundamental in any online transaction, but with buying art online sight unseen it is even more important due to the often high value of the goods involved. This is why the reputation of the seller remains as critical in the online market as it does in the traditional market and why the seller’s name and brand should always remain central to their business.
- 92% of the art buyers said that the visuals and the information presented on the website are seen as the most important factor when buying art online.
- 86% of the art buyers said that the reputation of the auction house or gallery is one the most important aspects buyers take into account when transacting online.
This suggests that the traditional auction houses and galleries, with an already established reputation, have a great advantage versus many of the new online-only players if they take on the opportunities of developing their online market in the right way.
The real challenge is how the traditional art market engages both with their existing client base and a potential new audience that increasingly wants the option to conduct their business online.
Key findings of the report
Who is buying art online?
Unsurprisingly the percentage of people that buy art online varies depending on their age. It increases gradually from the ages of 20 to 40, where it reaches a peak (81% of those in the age group 35-39 have bought art online).
However the older generation of collectors (60 years and upwards) are among the most active online buyers. This suggests that the market perception about generational differences in online buying behaviour is much less evident than most people would assume and that new technologies and buying based on digital images are broad based across all age groups.
- 71% of art collectors have bought art online sight unseen on the basis of a digital image only.
- 64% of art collectors and art buyers are already buying art directly online with little or no interaction with the seller.
- 43% of the 25-29 year olds surveyed have bought art online sight unseen. Furthermore, 67% of this age group said they were very likely to buy art online in the next year. This suggests that there is a new generation of art buyers emerging that are confident in using online channels to buy art. Selling online is seen as key to engaging these younger buyers.
- 82% of respondents in the 65 years plus age group said they had bought an artwork site unseen based on a digital image only. 55% of this group said they had bought art directly online. This group are also significant spenders, with 20% saying they have spent more than £50,000 on buying art online so far, and 18% said they would be willing to spend more than £50,000 on a single artwork.
- 70% of the men vs. 55% of the women surveyed have bought art online sight unseen. Men are more inclined to buy through online auctions, with 56% using this method, whereas only 26% of their female counterparts preferred this buying channel. Women prefer buying from gallery websites (52%) and online galleries (31%), against men answering 48% and 22% respectively.
Who are they buying from?
The top two places to buy art are gallery websites, with 49% of those surveyed having used this method, and 45% said that online auctions were their preferred choice. 26% of the respondents had bought art through online-only galleries, which suggests that although the majority of the transactions seem to happen through traditional gallery channels, online-only galleries represent a force to be reckoned with.
As has already been discussed reputation and trust remain critical in the online market and provide existing auction houses and galleries with a potential advantage. The offline art world seems to have a significant advantage in capitalising on their reputation and their expertise to combat these concerns.
Online auctions are broadly preferred by men, with 57% of them using this platform, compared to 26% of women. As for the difference between general buyers and collectors, the latter seem more comfortable with the online auction system, with 51% having used it compared to 45% of general buyers.
In terms of differences between age groups:
- Those aged over 65 years prefer auctions (60%) and gallery websites (30%) but will also make purchases from museum websites (20%)
- The highest buying group (aged 35-39) favour gallery websites (60%), closely followed by online auctions (57%) and online galleries (27%).
- The remaining age groups tend to stick to online auctions and galleries or gallery websites over the rest of the online selling pathways.
What are they buying?
- 26% of the art collectors surveyed have spent £50,000 or more buying art online (includes buying from a digital image, but also from online auctions and gallery websites) with 25% of these collectors willing to spend £50,000 or more on a single artwork
- Art buyers seek to buy unique works online. Although limited edition prints and photography have been seen as the most suitable mediums to sell through online channels, 45% of the art buyers surveyed have bought unique works of art sight unseen (such as paintings) online. This result is also reflected among the galleries surveyed, where sales of original artworks accounted for 53% of online sales, against 59% accounted for by limited edition prints and photography.
The online art market
The report sets the total value of the global art market in 2012 at $56 billion with global online art sales estimated to account for 1.6% of this market - $870 million.
The report anticipates a 19% growth in this figure over the next 5 years meaning that estimated online art sales will reach $2.1 billion by 2017.
Developments in the online art market are presenting its participants with new opportunities and challenges. Although the online art market is unlikely to replace the traditional art market, it offers significant potential for auction houses and galleries to build new audiences and diversify their current revenue streams. At the same time it poses a threat to those who fail to embrace these changes.
28 May 2013
1 Survey findings were based on the responses 231 art buyers and established art collectors, more than half of home spend over £75,000 per year on art, as well as 58 international art galleries.
2 For the purposes of the survey sight unseen means acquiring the work without having physically seen the object so that the purchase is based on a digital image only.