Hiscox has released its fifth online market report. (You can download a copy below or watch the video summarizing the report’s ideas above.)
When the majority of individuals carry high-powered super-computers with them at every moment, the distinction between ‘online’ and off-line may no longer be a useful way to think about sales. Having said that, Robert Read is always well worth listening to when talking about art, art valuation and transactions. His—and the report’s—basic message remains very important: there’s still a great deal to be done in this space. Nothing has been determined yet.
Online sales trends
Online art market sales up despite slowing global art market. Online art market sales reached an estimated $3.75 billion in 2016, up 15% from 2015. This gives the online art market an 8.4% share of the overall art market, up from 7.4%* in 2015.
Brick-and-clicks are gaining ground. Whilst the traditional auction houses were slow in adapting to the opportunities of the online art market, 2016 marked a significant shift in their online sales strategy with Sotheby’s, Christie’s and Heritage Auctions generating combined online sales of $720 million in 2016 – accounting for 19% of the online art market. Online-only auction saw a particularly strong increase at Christie’s, with an 84% jump in sales. One of the biggest online players, Heritage Auction, reported that 41% of its auction sales are now conducted online, with $348.5 million in online sales reported in 2016 (up 1.3% from 2015).
Hesitant art buyers remain unconvinced about buying art online. The conversion of online art buyers remains static for the third consecutive year, signalling that the online art market could be struggling to convert sufficient numbers of hesitant art buyers. However, the good news is that existing online art buyers have been acquiring even more art in the last 12 months. The number of online art buyers that have bought more than a single artwork in the last 12 months has increased to 65% in 2017, up from 63% in 2016.
Obstacles to future growth. Online art sales growth can only accelerate by increasing the conversion rate of hesitant, non-online buyers by actively addressing their key concerns. These concerns are currently focused around the lack of physical inspection and worries about the work’s condition, authenticity, and the seller’s reputation.
Third-party sales channels are gaining in popularity. In 2013, 15% of galleries surveyed said they would generate online sales by partnering with an existing art e-commerce platform. In 2016, 26% of galleries surveyed said they planned to partner up with a third-party e-commerce platform in the near future, and this year 27% said this was their future e-commerce strategy. In 2017, 49% of galleries that sell art online say they are doing so through a third-party online platforms.
Online art sales are dominated by pieces priced below $5,000. Despite individual examples and anecdotal evidence that works are increasingly being bought online at higher price points, the future battleground for the online art market is likely to remain in the lower price range. According to the latest survey, 79% of online art buyers spend less than $5,000 per piece when buying art online, up from 78% in 2016 and 67% in 2015.