The quest for new customers is a fundamental and ongoing endeavor for many private businesses in any marketplace. In the art market’s case, the 2019 Art Basel report cited the issue of finding new buyers as the biggest challenge facing art dealers last year.
In order to tackle this challenge, art dealers should be in tune with the demographic changes affecting the art market in recent years. As the market has globalized and digitized, the age profile of aspiring art collectors has been trending younger, and the traditional dominance of the male collector is waning.
Millennials are now the fastest-growing category of art collectors based on data from the 2018 U.S. Trust Insights on Wealth and Worth® survey, comprising 27% of collectors in the U.S. In Asia, their representation among art collectors is even higher. The 2019 Art Basel report notes that millennials make up a higher-than-average share of collectors in Asia, comprising 46% of the high net worth collectors surveyed in Singapore and 39% of the total share in Hong Kong. Millennial collectors are reportedly more active buyers than others are according to the report, with 69% of them having purchased fine art and 77% having purchased decorative art from 2016 to 2018. They are also more transactional. The 2018 U.S. Trust survey claims they are at least twice as likely as older collectors are to view art as a financial asset, three times more likely than boomers to sell works they have collected (85% to 24%), and are more comfortable using their art as loan collateral.
The 2018 U.S Trust survey data shows that women have risen to greater prominence as collectors. They are more interested than men in buying art online, and nearly one-third of wealthy women either own art or are interested in buying it. The 2019 Art Basel report reinforces these findings, estimating that In China specifically, women account for approximately 50% of luxury spending, up from just 10% in 1990. Women were also represented very well on the 2018 Top 200 collectors list, an ARTnews annual publication, with 49 women mentioned alone, 59 as part of a couple, and 5 with references to collecting families.
Given the changing demographics among art collectors in favor of millennials and women, it seems reasonable to expect many potential future buyers to emerge from those quarters, and prudent for art dealers to focus on these audiences in their quest for new customers.
How might art dealers successfully attract new collectors from these two emergent constituencies? Given the habits and behaviors that broadly characterize how these collectors pursue their passion for art, dealers who best understand how modern technologies can create opportunities to connect with these buyers stand a better chance of success.
Elena Soboleva, director of online sales at the David Zwirner gallery, observed recently that collectors today are spending their time online, and this is particularly true of millennial collectors, three quarters of whom purchased art online in 2018 according to the 2018 U.S. Trust survey. Among HNW millennials, the share who purchased online was as high as 93%, according to the 2019 Art Basel and UBS Art Market report. Women collectors are evidently part of the online shift too, being the biggest drivers of growth in online acquisitions (jumping from 16% of female collectors in 2017 to 36% in 2018, again per the 2018 U.S Trust survey). Investing in an online presence for this reason, either via a custom-built online offering or by partnering with any number of well-established digital platforms for art such as Artsy, ArtNet or ArtSpace, should be a no brainer for art dealers looking to find new art buyers. No single approach fits every circumstance, and in deciding which path to pursue, dealers may wish to seek advice from a trusted consulting partner.
As the technologies available to digitize art advance, develop and improve, dealers and galleries will have further opportunities to post artworks online in more thoughtful, elaborate and engaging ways. For example, the David Zwirner gallery opened an online viewing room in 2017 and now schedules virtual art exhibitions regularly, resulting in multiple payoffs. Besides the additional revenues generated from online viewing room sales, virtual viewing for the gallery “now also rivals art fairs as a way to meet customers — 52 percent of online inquiries come from newcomers”.
Dealers specializing in Western contemporary art are in a particularly good position to find new buyers among collectors in China in light of the 2019 TEFAF report finding that 60% of Chinese collectors plan to collect Western contemporary art in the next five years. Moreover, a 2014 AXA Art Survey indicated that over 90% of young collectors are interested in contemporary art. Those dealers whose Western contemporary artworks are available digitally for faster and easier viewing will have a definite edge in the race to meet new collectors based in China and from the millennial pool more broadly.
That speaks to the primary argument for dealers to leverage online viewing as a vehicle to reach millennial art buyers because they value convenience at a premium. As Evan Beard (a self-identified “millennial”) writing for Artsy has put it: “We value convenience, which means that it’s time to get to work on that virtual reality feature so we can attend your London opening from Lagos or Los Angeles via our iPhones.”
Millennials are frequent and avid users of social media platforms to network and promote their own virtual brands and personas, bestowing these channels with tremendous power to socialize information quickly, effortlessly and interactively among widely dispersed audiences, and to connect those audiences to one another. These audiences are potentially vast. The 2019 Hiscox online art trade report found that In January 2019, Instagram had more than 1 billion monthly active users. As the “preferred channel for art collectors to discover, follow, see what is trending and ultimately find art to buy,” Instagram is an ideal tool for art dealers to meet and connect with new, particularly younger, consumers.
Unsurprisingly then, the majority of art dealers are already leveraging the power of Instagram as a marketing tool: according to the 2019 Hiscox report, 75% of art galleries use Instagram to promote their artists and their exhibition programs (up from 61.5% in 2018). These efforts garner interest from art inspired Instagram followers, some of whom are likely to be collectors. By way of example, Loïc Gouzer of auction house Christie’s enjoys an Instagram audience of 21,000 followers, and he estimates that at least 80% of the collectors he deals with are Instagram followers. That contention is consistent with the 2019 Hiscox report finding that 80% of art buyers use Instagram to discover new artists, and 75% use Instagram to find art to purchase. Bolstered by commonly used practices of instant feedback and critique through likes and comments, Instagram also operates as an engagement tool as well as a marketing tool, providing a feedback loop to dealers about potential new buyers, their interests, likes and dislikes.
While Instagram remains the preferred social media channel for art enthusiasts, there are other social networks that art dealers may take advantage of to find new audiences and potential customers, including Twitch, Pinterest, DeviantArt, Behance, Tumblr, Dribble, Wetcanvas, Reddit, Flickr, Facebook, Twitter, and Periscope.
New sales naturally lead to new customers, so technology tools structured and designed to help art dealers and galleries to make and close new sales to collectors can be invaluable.
Artbinder is one such tool on the market that allows clients to take their inventory of artworks with them on the go via a mobile app on their iPhones or iPads, effectively constituting a mobile art gallery to facilitate quick and convenient sales from remote locations. Doubling as an inventory management and a portable sales tool, the platform’s rich documentation storage capabilities provide critical contextual information about artworks and artists such as biographical details, relevant magazine articles about an artist, and a listing of the art fairs and shows where the artwork was featured or in which an artist has participated. These capabilities help dealers to respond to customer inquiries quickly, accurately and comprehensively, improving the direct customer relationship experience (and dealers can appreciate that good customer experiences will often generate referrals and interest from new customers). Artbinder allows clients to showcase their artworks remotely and, when a buyer sees something they love, immediately send the prospective buyer an email with all of the related artwork and artist information to help close the sale. Such tools can be a highly effective way to increase sales with and lock in new millennial buyers because again, they account for the convenience aspect prized by these types of collectors and the shorter attention spans typical of the younger demographic.
Finding new buyers will always be a challenge for art dealers, but with a little help from the technologies described above and an understanding of how the art market demographics and the buying habits of art collectors are changing, it can become a bit less daunting.