UK Insurer Hiscox has released its annual Online Trade Report for 2017. Below is the Foreword of the report followed by key findings. Online sales are up by 15% over the previous year, with an 8.4% of the total art market. Most online art sales are for under $5,000 with a few newsworthy exceptions. The report notes it is getting harder to convert traditional buyers to online purchases, but those who do buy online, tend to increase their online purchased as they get more comfortable with the platforms and processes.
The full report is just over 50 pages, and while I am still reading it certainly has some interesting content on the online art market.
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Hiscox reports
Source: HiscoxForeword
The long-awaited consolidation in the online art market has yet to happen, with the notable exception of the marriage and subsequent separation of Paddle 8 and Auctionata. We all know it’s going to happen – even our survey of those managing the online platforms shows that a massive 86% expect more consolidation – we just don’t know when and who is going to end up on top.
So, what do we know? The online art market has continued to grow strongly (up 15% to USD $3.75 billion) against the backdrop of a slowly-increasing global art market.
The established global brands in the art market such as Sotheby’s and Christie’s are starting to dominate The Hiscox Online Art Platform Ranking and appear to be getting to grips with the challenge of transforming a bricks-and-mortar business into a multimedia business.
The dealers continue to struggle online; maybe they are making enough elsewhere. None of us know in the gloriously opaque art market, but my bet is that the temptation to bury your head in the sand when you are not tech savvy is all too great.
Finally when it comes to social media, Instagram is now very clearly the medium of choice.
We continue to monitor these developments and I hope you enjoy this year’s report.
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.
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