Art market in times of crisis

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The art market is blaming the Covid-19 crisis. For better or worse, this major part of the global economy is facing the reconfination. And its profound impact on market structuring. A heartbreak for art professionals like gallery owners for whom 2019 was a pretty good year… As a result, the global art market grew by 6%, bringing its turnover to $67.4 billion (1). On the other hand, the first part of the containment has put this trend at a brake. In the first half of 2020, global public sales of works of art fell by 58.3%. Added to this was a 41.3% drop in the average price. (2). However, any time of crisis pushes for renewal and the art market seems to be no exception…

An art market heavily impacted by the Covid-19 crisis

According to the mid-year survey conducted by Art Basel and UBS, one in three galleries was forced to downsize as early as the first half of 2020. For example, 38% of galleries with an average of 5 employees and a turnover of between $250,000 and $500,000 had to part with part of their team (3). At the same time, in addition to a drop in the number of transactions, 36% of galleries saw a decline of about 43% in the value of sales. This is even more acute for smaller galleries, which are already weakened by a concentration of the market around a few major international players.

In addition to the loss of visitors to art galleries, it is also the cancellation of fairs and fairs that explains this sharp drop in activity. And for good reason, these events account for between 30% and 80% of the turnover of traditional galleries. Since the first containment took place at the launch of the art fair period, 74% of the galleries were already registered in several fairs. Faced with this situation, the Professional Committee of Art Galleries (CPGA) has published a study on the impact of the health crisis on theeconomy of art galleries. In particular, it reveals that a third of the galleries could be shut down in the next 12 months.

Nevertheless, it should be noted that in addition to the alarming figures published by the various actors of art, others have had great successes. For example, an auction at the Bordeaux auction house made headlines in September. Pushed back because of the containment of March, it aroused passions. On this occasion a still life of the painter François Desportes sold more than two million euros (5). Originally valued at 150,000 euros, it is Desportes’ most expensive work ever sold in the world. This fine sale also corroborates a trend of funds observed in recent years: the significant growth in art sales in the provinces.

Digitalisation and online auction, seize opportunities

Behind these plummeting figures in the art market lies a more encouraging reality. And for good reason, to cope, many art galleries have revised their model. Digital has thus taken its place at the heart of this very confidential and traditional market. In 2019, only 10% of art sales were online. With containment, this mode of marketing became commonplace, reaching 37% in the first half of 2020 (3). Already common in small galleries to facilitate the visibility of works, it is the galleries making more than 10 million dollars that have made the most of it since the beginning of the crisis.

Art Market Paintings Ancient Gallery
The large galleries have thus increased their online sales fivefold to reach an average of 38% of sales via digital.

Galleries are not the only ones to digitize. Thus, different auction houses invest this support. This is the case, for example, of the house De BAECQUE and Associates which can maintain its auction schedule through the online sale (6). The sessions take place behind closed doors but are broadcast live on digital platforms such as Drouot Digital, Interencheres and Invaluable.

The house had already been able to judge the merits of this method of marketing during the spring containment. At that time, the 14 auctions had accumulated 1,485,842 euros with the fees. For the second half of 2020, DE BAECQUE and Associates is planning an auction of the second part of the Colette Creuzevault Collection. The occasion to recall that the sale of the first part of this collection had already been a huge success. At that time, she had accumulated various auction records for a total of 2,607,564 euros with the fees.

Renewal of the profile of buyers, towards an opening of the art market?

With the new way of selling digital technology, it is also a whole part of the clientele of the art market that is developing. A boon for an insider’s field where the public is aging. As a result, online sales are draining younger collectors. Buyers born between 1980 and 1999 accounted for almost half of the audience. In addition, no less than 92% of young art lovers have already purchased a work online. Nearly 30% favour this method of buying at traditional auctions. In previous generations, they are only 10%. (7)

Online auctions therefore attract a younger and new audience. It opens the auction rooms to new buyers, thereby extending the clientele of the art market.

The sales, which we held live behind closed doors during the lockdown, were a huge success, thanks in part to many new customers who represented 48% of buyers.

Etienne DE BAECQUES, Associate Auctioneer at DE BAECQUES and Associates

Offering more transparency, blurring borders by being accessible from any country, and taking a less elitist stance,digital is establishing itself as a real opportunity for galleries and auction houses. So much so that many players have already planned to maintain this format even after the containment.

Sources:

  1. The Art Basel and UBS Global Art Market Report 2019, Art Basel
  2. Artnet Intelligence Report Fall 2020 , Artnet, Fall 2020
  3. Mid-Year Survey 2020, Art Market Highlights 2020, Art Basel and UBS Report
  4. Result of the Covid-19 health crisis impact study on the economy of art galleries,Professional Committee of Art Galleries
  5. In Bordeaux, a world record for Desportes’s work
  6. Auctions continue, including the second part of the Colette Creuzevault Collection, DE BAECQUE and Associates, press release issued on November 20, 2020
  7. The art market at the time of coronavirus ,CASOAR, September 16, 2020
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