In the past several months, the coronavirus pandemic forced the art market’s rapid expansion online as galleries, auction houses and art fairs were faced with virtual sales as their sole option. According to the 2020 Online Art Trade Report, released in early July by insurance firm Hiscox together with research company ArtTactic, online art sales across the art industry generated $4.8 billion in 2019, up just 4% from $4.6 billion in 2018. This statistic marks the fourth year of a slowing percentage increase in online market sales. The peak sales increase was 24.2% from 2014 to 2015; a dip of 12.5% was seen in 2017.
Despite leveling off of growth, the Online Art Trade Report shows online sales outpacing the market overall, which achieved $64.1 billion in 2019, a 5% decrease from 2018 according the UBS Global Art Market Report. This year saw online sales account for just 7.5% of the entire yearly sales across the market. Following that trend, E-commerce sales saw a growth of 16.4% year-to-year in the United States in 2019.
Across Sotheby’s, Christie’s, and Heritage Auctions— the three leading firms in online sales together realized $1 billion in 2019, marking an increase of 58% from the $636 million achieved in 2015. Dallas-based firm Heritage has long been the leader of digital auction sales, an initiative it began back in 1999, but saw a downturn of 0.5 percent in sales from 2018’s $487 million. Still, Heritage far outperforms the two leading auction houses. Christie’s and Sotheby’s saw $270 million (8 percent growth) and $250 million (25 percent growth) in online sales in 2019 but Heritage generated $484 million that same year.
Phillips saw its online sales grow 50% since last year’s annual total of $75 million across online transactions in 2019. In 2018, sales to online bidders totaled $50 million. The report suggests the gradual decline in overall growth was due to the slowing adoption of online sales at the major houses. That was before the pandemic hit.
In the first half of 2020, online-only sales at Christie’s, Sotheby’s and Phillips made $370 million in online-only sales. The Online Art Trade Report notes Sotheby’s has seen a 131% increase in the volume of works sold online from 2019 to 2020.
According to the Hiscox report, the ten largest global online selling platforms surveyed account for 68% of the total online market and the top five make up nearly half, at 46%. The report also posits that pandemic could eventually lead to consolidation as key platforms expand to offer smaller vendors access to a larger audience. The art market already saw a version of this in the Spring when Zwirner and Gagosian offered their online sales platforms to other galleries.
Fine art sales only accounted for an average of 19.5% of total online sales, with jewelry and watches making up 25% and other collectibles for 30% (decorative arts made up the remaining 25%). The survey suggests that an outside collectibles platform with advanced technology could disrupt the current marketplace by filling a gap between the fine art and retail industries (an idea supported by 48% of the online platforms surveyed.) The Hiscox report posits Detroit-based streetwear resale company StockX as an example. The online marketplace generates $100 million in annual sales and has expanded its primary offerings of sneakers to include collectibles by contemporary name brands like KAWS and Takashi Murakami. Other alternative digital initiatives launched during the pandemic that are being closely watched include Loic Gouzer’s Fair Warning auction app, which has seen more than $13 million in sales so far since June.
According to the report, 96% of parties surveyed said price transparency was a key factor in building clients’ trust. Leading galleries’ have developed the practice in their virtual selling booths, drawing in buyers through a combination of bespoke curation and accessibility. The Sotheby’s Gallery Network launched in April with a substantial roster of blue-chip dealers like Lévy Gorvy and Petzel Gallery on the online buy-now platform.
Art fairs have seen a challenge in adapting to the rapid move online. Competing with blue-chip dealers who have established digital programs, along with quelling online fatigue among collectors is the primary barrier. Among the fairs that were quick to respond was Art Basel Hong Kong staged in March which saw David Zwirner achieve its highest virtual booth total of $16 million. Smaller regional fairs like the Dallas Art Fair acted quickly, offering an online edition in mid-April, but this was followed by the cancelation of the live fall event and a falling out with some exhibitors alleging the fair’s refusal to reimburse vendors.