Art becomes an increasingly important section of collectors’ portfolios, both in economic and sentimental value, wealth managers need additional tools to measure rising prices and market performance. The Art Market Report 2021 is the art world’s premier benchmark for the study and analysis of the general art market, art collecting, auction houses, galleries, fairs, and online sales. By using data sourced directly from auction houses, The Art Market Report offers objective, independent research with a goal of bringing greater access to credible information to the market. Rosemont Art Advisory presents you the key findings from the Art Market Report 2021.
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https://theartmarket.foleon.com/artbasel/2021/the-global-art-market/
Total Sales in the Global Art Market
Global sales of art and antiques reached an estimated $50.1 billion, down 22% from 2019. Online sales of art and antiques reached a record high of $12.4 billion, doubling in value on the previous year, and accounting for a record share of 25% of the market’s total value.
Although many businesses maintained a significant number of transactions online, on aggregate, the volume of sales was estimated to have decreased by 23%, with some of the biggest declines reported for dealers and fine art auctions. This brought the estimated volume of sales to 31.4 million, its lowest level since 2009.
Much of the decline in sales and volume can be attributed to the COVID-19 pandemic. As is stated in the report, “The art trade was particularly vulnerable in this crisis, being based on discretionary or non-essential purchasing, and heavily reliant on events and travel. While dealers and auction houses found ways to maintain exhibitions and trading online, the pandemic had a profound effect on sales, employment, and business practices.
Looking Online
According to the report, “The pandemic created an exogenous shock that has provided the impetus for change and restructuring, encouraging new collaborations and working practices, with the most fundamental shift being to an increasing share of online sales and exhibitions,” (Art Market Report 2021, 344). The share accounted for by online sales expanded from 9% of total sales by value in 2019 to 25% in 2020, the first time the share of e-commerce in the art market has exceeded that of general retail. Aggregate online sales reached a record high of $12.4 billion, doubling in value from 2019.
Auctions also shared in the success of moving online, with Sotheby’s and Christie’s (to name a few) putting together innovative online events that wowed the art world. As is shown in Figure 3.10, however, the largest share of online sales was reserved for lower value brackets. This reluctance to buy online at higher values signifies the traditional importance placed on seeing art in-person. This reluctance highlights the importance of secure digital vetting infrastructures and access to trusted information.
Going Digital: More Than Sales
As the art market continued their digital transformations, dealers and auction houses diverted more resources to IT (including internal IT development, websites, hardware, software, and third-party online costs), with spending up by close to 80% year-on-year, making it the highest element of ancillary spending at $3.5 billion (21% of total spending). While auction houses saw a strong increase of over 50%, dealers’ spending almost doubled to nearly $1.9 billion, the majority of which was on internal IT development
An Art Market for Everyone
In recent years, the art market has continually been shown to be top-heavy in nature. The economic issues brought about by the crisis in 2020 could intensify this polarization. Organizations faced with crises often adopt a more social orientation, basing transacting on the social position of the partners they exchange with and increasing exclusivity in their exchanges. When quality cannot be directly observed, an increasing number of ties to higher-status actors (for example, galleries or artists) is used as a measure of perceived value and
esteem, while a lack of such ties (or ties to lower-status actors) deflate these valuations.
The Importance of Art as an Asset
Financial motivations remained an important part of collector motivations. According to the report, “Using art as a method to diversify their portfolio of wealth ranked the highest of the financial motivations in the majority of markets, while expected return on investment was the key financial driver in France, Taiwan, and Italy. Financial motivations also declined with age, with three-quarters or more of millennial collectors regarding them as important versus around half of Boomers, and a minority of the Silent generation collectors,” (Art Market Report 2021, 321). Furthermore, “Some collectors had a relatively high proportion of their overall portfolios of wealth invested in art, with 61% reporting an allocation of over 10%,” (Art Market Report 2021, 290).
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