The impact of Covid on the art market

The root of all evil

As surprising as it is, the creative sector had to begin a methodical analysis to provide the most adequate response to a situation never seen before. Two findings were the basis of the response that would allow the patient to miraculously recover.

First, the health crisis provided a welcome and surprising realisation. Unlike 2009, the decline was not due to a financial crisis and a loss of liquidity on the buyer side. It is above all the general lockdown, isolation measures and closures that resulted in the market downturn in 2020.

To the mandatory closure of the places of sale, it was necessary to add the reaction of the buyers. As expected, they adopted the posture of caution inherent in any form of crisis. And so, even if the funds were available, collectors preferred to postpone their acquisitions until more reassuring times.

A first observation therefore emerged from the analysis of the problem: cash is available and purchasing intentions remain. This base was reassuring enough to make the changes that would reassure the market on the one hand and on the other hand provide the necessary impetus to catch up with the delay incurred during a catastrophic first half.

The second observation appeared following an inevitable introspection of the sector: the fact of having delayed their digital transformation was going to require many players to work twice as hard to operate the pivot towards digital technologies.

Thus, to initiate the reversal of the trend caused by the pandemic, a whole section of the art market would have to reinvent itself in order to offer a digital experience sufficiently convincing for buyers to overcome their concerns.

An encouraging recovery period

All in all, 2020 ended on a high note.

First, following an emergency digital transformation, collectors reinvested in the sector from the start of the second quarter.

Moreover, this return to activity has been dazzling. During the last 6 months of 2020, sales literally took off, seeing record acquisitions made in both the West and the East.

We must salute the dynamism of the art dealers who, through their pugnacity, have enabled this recovery. Indeed, the latter have spent considerable energy to support the business and defend a cultural sector overshadowed by the health emergency.

Thus, after a catastrophic first half, the year 2020 ends with an increase of 7% in the West and 71% in China.

These unexpected results will prove to be the start of a record-filled year 2021.

Triptych by Francis Bacon "Inspired by the Oresteia of Aeschylus" - Photographed at Sotheby's 

The surprising effects of Covid on the art market

Si les acteurs du marché des beaux-arts peuvent se féliciter d’avoir sauvé leur secteur d’activité, force est de constater que les efforts consentis ont également profité d’effets positifs, pour le moins, inattendus.

Effect No. 1: Millennials to the rescue of the art sector

By choosing to turn to digital technologies, the art market has put itself on the radar of the so-called millennials who have shown a growing interest in the fine arts. So much so that the Internet sales rate doubled during the 2020-2021 period.

Although the digital transformation was primarily beneficial to the major auction houses, it should be noted that young audiences first acquired affordable pieces from galleries present on social networks.

This strengthening of online sales required a good dose of adaptability on the part of the players who had to understand the habits of their new audience. For example, the loyalty of buyers for a particular gallery has proven to be a particularly fluctuating parameter on the Internet. Buyers move quickly from one platform to another and go on to purchase without considering the brand that put the work up for sale.

Galleries new to the internet have also had to adapt their sales journey to mobile devices to meet their audience since internet shopping has mostly been done from phones and tablets.

The use of social networks is another consumption habit to which art sellers have had to comply. And more specifically, it appeared that Instagram has established itself as the most popular platform for millennials to discover the art world and learn about the market.

Finally, observations of the development of the online market have also led to the observation that purchases during the Covid period have been made in a committed manner. Indeed, the primary motivation of this young audience was the desire to help a sector in danger.

Effect No. 2: The rising stars upset the established order

Increased activity on Instagram has also brought a new generation of artists closer to this newly acquired audience.
This connection without intermediation contributed to ousting the specialised galleries which until then played a role of facilitator between buyer and artist.

This disruption in the established order has thus enabled artists to become influencers capable of promoting themselves and the artistic approach that drives them.

However,we have to accept that digital technologies have a limit: the lack of emotional feelings sparked by the physical experience of the object.

Indeed, 47% of newly acquired collectors testify to their need to contemplate the physical work before making a purchase.

However, online art sales have experienced unprecedented enthusiasm, posting a growth of 72% for a sales amount reaching 6.8 billion dollars.

In conclusion, it is up to established players to work on the digital experience they offer to overcome the limits of technology.

For example, to convert more millennials, they can select works that meet the preferences of this new audience or offer a user experience that compensates for the absence of “physical” contact.