Consequences of the Pandemic in the Art Market
As of March 16, 2021, the results of a comprehensive and macroeconomic analysis of the global art market for the year 2020 are available; a year full of challenges both for the art world and the worldwide economy. The "Global Art Market report" survey was published by ArtBasel and the multinational bank UBS and bears the signature of the economist Dr. Clare McAndrew. The report examines the effects of the pandemic in various sectors of the art market. Whilst took a closer look at the dynamic that has been developed the previous year in the art markets around the globe.
Generally speaking, in 2020, the worldwide sales of art pieces and antiquities have been reduced to 22% from the sales that took place in 2019. The general sales of the year are estimated at around 50.1 billion dollars. On the other hand, online sales reached their highest record, representing 25% of the general market with total earnings of 12.4 billion dollars (A. Shaw, 2021). Clare McAndrew describes the pandemic as “a particular kind of crisis“. She explains that “It is not the same kind of recession as we have seen in the past. Certain industries and pockets of economically vulnerable people will really, really struggle for the next few years. But the rich have got richer, and, whether we like the sound of it or not, it has been beneficial for the art market.” Without the distractions of the holidays' expanses and the general spending on luxury goods and other relevant activities, high-net-worth individuals were more motivated to buy art. Notably is that, according to the report, 66% of the respondents (a percent that corresponds to 2569 collectors) stated that the pandemic increased their interest in their collection. (S. Christodoulidis, 2021). The most important result of the report was the rapid growth of online art transactions. Digital auctions may not have been able to offset the financial damages which have been caused by the pandemic, but definitely, they managed to eliminate the deviation. An excellent example of that online adjustment is the one Sotheby's auction house chooses to follow. The auction house has invested in improving its smartphone app and homepage to create a pleasant online environment. Moreover, they added an augmented reality element that allows users to place items on sale in their space and see them from all the possible angles. In that way, they made more than a hundred online sales with revenue of 200 million dollars since March. Last year's sales in the same period were 40 and had earned just 23 million dollars. In any case, many collectors bought by phone or in absentee bid form even without a "physical contact" with the work, long before the issue of the pandemic arose. The Sotheby's invested in a new form of a virtual live auction, which means that the works for sale are on display online and can be seen by a very limited number of people by appointment. When it comes to "action", an auctioneer is in a room alone surrounded by screens. Those screens showing the image of his colleagues in other cities who present both telephone and online offers. Following that strategy, Sotheby’s is the big winner in the digital shift; the house's exclusively digital auctions were of the order of 413%. (M. Astrapellou, 2021).
Bacon, F. (2020). Art Auction or Game Show? Sotheby’s Tries Something New. [Photograph]. New York Times https://www.nytimes.com/2020/06/30/arts/design/sothebys-online-auction.html
The auction houses hesitated to take this big step of live-streaming. If we consider the tension in the atmosphere as the bids are submitted by the interested parties, it is legitimate that the auction houses were concerned about that digital shift. After all, the physical presence is a crucial element for the glamour of the process. However, the transition has shown that the collectors look "friendly" to that technological modification. As Sotheby's CEO Charles F. Stewart mentioned in an interview, "We have been very impressed for the last three months that, despite the general situation, the market is showing great resilience. I would say that in many ways what we are seeing is increased interest and involvement from the collectors we work with."
The future of the auctions will be based on a hybrid model which will include the digital experience. However, it is not going to be based exclusively there. Potential buyers need to be able to see, feel and come in contact with the items. This connection with the items before the classic live auction is a special step of the process. Professionals in the art world try hard to maintain it. As a consequence, another trend (that is already observed before the pandemic) gains ground every day, private sales; sales that are not open to the whole world but are made with a certain number of potential buyers.
Collectors seem to be focusing more and more on pieces that will retain their value and have an excellent track record in the secondary market. For instance, in the market, it is noticed that there is a renewed interest in the Great Painters of the past. Buying art pieces is a traditional investment method that in a period of uncertainty such as the pandemic seems to withstand and resist the economic downturn.
References:
A. Shaw. (2021, March 16). Art Basel/UBS report: global art market shrinks by almost a quarter to 50.1$ during Covid Crisis. The Art Newspaper. https://www.theartnewspaper.com/news/art-basel-ubs-report-global-art-market-shrinks-by-almost-a-quarter-to-usd50-1bn-during-covid-19-crisis
R. Barclay & A. Del Pizzo. (2021, March). The Impact of a Global Pandemic on the Art Market. AON. https://www.aon.com/unitedkingdom/insights/impact-of-a-global-pandemic-on-the-art-market.jsp
Α. Καψύλης. (2020, October 17). Η covid-19 απογειώνει την παγκόσμια αγορά τέχνης. Το Βήμα. https://www.tovima.gr/2020/10/17/finance/i-covid-19-apogeionei-tin-pagkosmia-agora-texnis/
Μ. Αστραπέλλου. (2021, September 30). Τέχνη στο σφυρί εν μέσω Covid-19. Το Βήμα. https://www.tovima.gr/2020/09/30/vimagazino/texni-sto-sfyri-en-meso-covid-19/
Στ. Χριστοδουλίδης. (2021, March). Ταχεία Δοκιμή [Rapid Test] στα Έργα Τέχνης και στις Αντίκες: Διπλασιασμός των Διαδικτυακών Πωλήσεων κατά το 2020. https://alexander.ac.cy/wp-content/uploads/2021/07/Stefanos-Article-6.pdf
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