The global Covid pandemic, which gripped the world at the beginning of 2020, has without doubt had a fundamental impact not only on transaction volumes but also more widely on the way the art market operates in London and around the world, as any art market participant will confirm anecdotally and many art market reports and data reviews have since confirmed. Still, after an initial period of adjustment, art dealers, galleries, auction houses and collectors showed remarkable adaptability and resilience. Here is our selection of 10 things we have learned in the last few months:
1. Galleries with fully functional websites and online viewing rooms, as well as auction houses with established online sales platforms, had a competitive advantage; even whole art fairs moved online, albeit by necessity. Certainly, galleries and auction houses with established online platforms entered the Covid period better placed to transition to an online marketplace.
2. Moving art sales online attracted new, younger and more international buyers and increased competition between new and established collectors. At the same time, a younger generation of tech-savvy gallery owners, managers and staff came of age.
3. The move online is here to stay; even once lockdowns and tier restrictions are lifted in art markets across the world, hybrid in-person and online sales models will prevail in future. The same is probably true for art fairs.
4. Bricks-and-mortar businesses (whether they be galleries, dealers or auction houses) were often able to negotiate rent relief from their landlords for limited periods of time and many also benefitted from the business rate relief extended by the government, but many will review their space requirements and may end up adapting their business model going forward.
5. Art fairs will continue to play an important role, having traditionally accounted for an important share of annual sales by galleries and dealers; but attending fewer art fairs reduced overheads for galleries and fair fatigue for collectors. There was definitely a case of ‘fair fatigue’ before Covid, with many dealers and collectors complaining of too many fairs and too little time. Art fairs will have to face a new reality, and many will have to add a strong online element to their model. Smaller and satellite fairs may well end up losing in importance.
6. The move online required operational business adjustments, from viewing to collection and shipping arrangements. Galleries needed to provide more effective options for clients who were unable or unwilling personally to view the works, from filmed virtual tours of their exhibitions to short films about individual works of art. At the same time, more works are now being sent on approval to known clients or institutions than might normally have been the case.
7. Remote transactions between art businesses and collectors made up-to-date and legally sound written sales agreements and terms of business even more important than under normal circumstances.
8. Transacting in a purely online environment and by way of distance sales has legal implications for the rights and obligations of buyer and seller, to mention e-commerce regulations and consumer contract cancellation rights as just one example; these rights give comfort to collectors and buyers but need to be managed by sellers.
9. Acquisitions by many museums (whether UK based or international) have all but come to a standstill, as most institutions have had to close their doors to visitors and income streams have dried up. In America, a number of museums have decided to deaccession works to fund their operations during this challenging time, something that is not normally done but has been allowed under the newly-relaxed guidelines established by the Association of Art Museum Directors to aid museums at this difficult time. However, some museums have continued to add to their collections, albeit not as vigorously as in the past.
10. While the digital art world is here to stay, having been so quickly starved of physical viewings, all art market participants agree that while an improved online experience is helpful, nothing can replace material viewing and handling; it is an experience our world will not take for granted going forward.
As we emerge from the Covid pandemic, led by emerging vaccination programmes and new forms of treatment, so we are confident that the art market will emerge stronger and more resilient, having gained new insights, re-evaluated ways of working, and successfully continue to foster all that we love and treasure about owning and appreciating art.
Gregor’s article for London Art Week can be found here.