Hiscox Online Art Trade Report 2020

Image credit
Nigel Cooke
Detail of Gazing Head, 2019
Acrylic on cotton blotting paper
Courtesy of the artist and Pace Gallery

Hiscox Online Art Trade Report 2020

Foreword

I wrote in the foreword to the last iteration of this report, that we waited with baited breath to see what happens next. The answer is pretty clear – COVID-19 has turbo-charged the online art market.

Its transformation has been quicker and more successful than anyone would have imagined. Faced with no other option, the market has embraced that change, illustrating the creativity and guile that courses through the market’s veins. For me, this is also backed-up by anecdotal evidence – whenever I speak with a dealer and they reflect on the impact of the pandemic, they nearly all remark that the effects have not been as bad as they expected.

I have no doubt that there will be much pent-up demand to physically see art, as there is to eat out, go to concerts, see friends and all the rest, but I believe, and this report shows, that we have reached a watershed moment in the development of the online art market.

What used to be a tentative foot in the door, is now a large presence in the room. Next stop, consolidation?

Robert Read
Head of Fine Art and Private Clients
Hiscox

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Key Findings

  • Part One
  • Part Two
 
    • Online art and collectible sales stalled in 2019, with growth in this market having steadily declined in recent years. Against a backdrop of a slowing global art economy, the outlook for digital sales at the beginning of 2020 was modest, at best.

    • Fine art accounts for 32% of online sales, significantly ahead of watches and jewelry (23%), decorative arts (12%) and furniture (8%). ‘Other collectables’ such as stamps and memorabilia now account for a quarter (25%) of all sales. As traditional auction houses look to attract younger collectors, we expect to see a greater focus on this segment moving forwards.

    • For most traditional art world operators, the pandemic has exposed an over-dependence on traditional channels (physical art fairs, gallery exhibitions, auctions etc.) An online presence is more likely now than ever before to keep the art world afloat.

    • Halfway through 2020 the impact of Covid-19 appears to have accelerated online sales, with online-only auction sales by Christie’s, Sotheby’s and Phillips 436% higher than the same period last year.

    • At this stage, nothing is certain. When questioned about the longevity of these changes, 65% of online sales platforms said they expected the pandemic to have a permanent and transformative impact on the sector.

    • A large majority (67%) of platforms believe the online art market will be dominated be a few global players within the next five years. The ten biggest platforms surveyed globally already account for approximately 68% of the total market.

    • Some 63% expect existing art market operators such as galleries to emerge as the big online players, while 48% expect an outsider (such as a start-up or tech giant) to disrupt the market.

    • Increases in online browsing activity, spend, auction sales and prices all witnessed between March – September 2020.

    • 82% of new art collectors (those collecting for fewer than three years) bought works online between March and September 2020, up from 36% in 2019. Some 69% of millennial art enthusiasts said they’d bought art online during the same period (vs. 40% in 2019).

    • Support for struggling artists emerged as an important motivation for spending between March and September 2020 (according to 68%) – second only to passion for art (95%). A quarter 25% said they had purchased art directly through fundraising campaigns’ Instagram pages, such as the Artist Support Pledge; rising to 36% for younger collectors.

    • Nearly half (47%) of new art buyers said they ‘never’ or ‘rarely’ felt any loyalty towards the online platforms they transacted with, up from 40% in 2019.

    • Cited by 68% as the preferred platform for art-related purposes, support for Instagram has increased consecutively since 2015 when it was just 34%. Key art market players such as Christie’s and Sotheby’s are already using the ‘swipe-up’ function on their Instagram Stories, linking potential buyers directly to the art works or collectibles that they prefer.

Part One

  • Online art and collectible sales grew 4% in 2019 to $4.82 billion

    Online art and collectible sales stalled in 2019, with growth in this market having steadily declined in recent years. Against a backdrop of a slowing global art economy, the outlook for digital sales at the beginning of 2020 was modest, at best.

  • Rapid growth in ‘other collectibles’

    Fine art accounts for 32% of online sales, significantly ahead of watches and jewelry (23%), decorative arts (12%) and furniture (8%). ‘Other collectables’ such as stamps and memorabilia now account for a quarter (25%) of all sales. As traditional auction houses look to attract younger collectors, we expect to see a greater focus on this segment moving forwards.

  • COVID-19 could kick-start the long-awaited digital transformation

    For most traditional art world operators, the pandemic has exposed an over-dependence on traditional channels (physical art fairs, gallery exhibitions, auctions etc.) An online presence is more likely now than ever before to keep the art world afloat.

  • The crisis has already accelerated online sales for auction houses

    Halfway through 2020 the impact of Covid-19 appears to have accelerated online sales, with online-only auction sales by Christie’s, Sotheby’s and Phillips 436% higher than the same period last year.

  • A temporary boost or will it last?

    At this stage, nothing is certain. When questioned about the longevity of these changes, 65% of online sales platforms said they expected the pandemic to have a permanent and transformative impact on the sector.

  • Consolidation still widely expected

    A large majority (67%) of platforms believe the online art market will be dominated be a few global players within the next five years. The ten biggest platforms surveyed globally already account for approximately 68% of the total market.

  • Big galleries could emerge as new online players

    Some 63% expect existing art market operators such as galleries to emerge as the big online players, while 48% expect an outsider (such as a start-up or tech giant) to disrupt the market.

Part Two

  • Uplift in online art market activity following the Covid-19 pandemic is sustained

    Increases in online browsing activity, spend, auction sales and prices all witnessed between March – September 2020.

  • Young and new art collectors take the plunge

    82% of new art collectors (those collecting for fewer than three years) bought works online between March and September 2020, up from 36% in 2019. Some 69% of millennial art enthusiasts said they’d bought art online during the same period (vs. 40% in 2019).

  • The growth of compassionate consumption

    Support for struggling artists emerged as an important motivation for spending between March and September 2020 (according to 68%) – second only to passion for art (95%). A quarter 25% said they had purchased art directly through fundraising campaigns’ Instagram pages, such as the Artist Support Pledge; rising to 36% for younger collectors.

  • Loyalty wanes

    Nearly half (47%) of new art buyers said they ‘never’ or ‘rarely’ felt any loyalty towards the online platforms they transacted with, up from 40% in 2019.

  • Instagram cements its position as the social media channel of choice

    Cited by 68% as the preferred platform for art-related purposes, support for Instagram has increased consecutively since 2015 when it was just 34%. Key art market players such as Christie’s and Sotheby’s are already using the ‘swipe-up’ function on their Instagram Stories, linking potential buyers directly to the art works or collectibles that they prefer.