A new report suggests that more and more art collectors are spending vast sums of money on ‘sight unseen’ online purchases, says Colin Gleadell.
The report also said that online art buying was not being driven solely by the young. In fact, 55 per cent of respondents in the 65-plus age group said they had bought art directly online, and 18 per cent that they would happily spend more than £50,000 online on a single art work. A good example would be Hiscox’s honorary president, Robert Hiscox.
Contemporary art collectors are increasingly skipping the first-hand physical experience of viewing art in galleries, and buying “sight unseen” through internet images, according to a report to be published by Hiscox, the art insurance specialists, this week. Everyone is aware that the internet plays an important part in the art market – as a research vehicle, promotional tool and bidding mechanism at auction – but the report will come as a surprise to those who believe that sight unseen online buying is restricted to low-value, limited-edition prints and photographs, where seeing the actual object before buying is less important than with higher value, unique works of art.
More than 200 international collectors and 56 contemporary art galleries were canvassed by Art Tactic, a company that specialises in contemporary and emerging art market research. Although most galleries surveyed discouraged clients from buying online without personal engagement with the gallery, they confirmed that unique paintings and drawings, as opposed to limited-edition prints and photographs, accounted for 53 per cent of their online sales. In terms of price ranges, the survey found that 26 per cent of collectors had spent £50,000 or more buying a unique work of art either through a jpeg emailed image, an online auction, or a gallery website.
“I love bidding online at auction,” he says. “It’s so convenient. I also buy sight unseen from digital images sent by galleries, but I usually know the galleries and the work of the artists, so there is an element of trust and confidence built in.” His view fits with 86 per cent of buyers, who said that the reputation of the seller was the most important factor in determining where they bought online.
Robert Read, head of fine art at Hiscox, says that many of the lower-valued works bought for the Hiscox corporate collection (example illustrated) have been bought, sight unseen, from galleries online. The research, however, was commissioned after a number of start-up online platforms approached him about the insurance risks of trading online. “Unlike your small local gallery, the online platform has maximum, global visibility, so it needs to be properly vetted, especially for older art where defective title and forgery can be issues,” says Read.
Looking at the future, the report predicts increasing online activity. Galleries that prefer the traditional, personal sales methods are in a Catch-22 situation because, the report says, 72 per cent of online sales are made to new collectors, a breed which all galleries are constantly looking out for. Fifty-nine per cent of galleries therefore have an e-commerce facility on their websites, and subscribe to the ever increasing array of online platforms that aim to attract a global audience of potential buyers to their websites.
In scenes that are reminiscent of the dotcom boom, barely a month has gone by in the past two years without some new online art sales platform or merger being announced. The level of venture capital invested in the start-ups is staggering, ranging from $4 million for the online auction platform Paddle 8, to $12.2 million for Artspace, which offers mainly limited-edition prints online, and $22.7 million for the recently launched Berlin-based online auction business Auctionata.
The competition for attention in cyber space has been likened to the Wild West, and not all will survive. Much will depend on which site develops the strongest brand and attracts revenue from advertising, gallery subscriptions or commissions from sales. However, the Hiscox report found that 86 per cent of online buyers still prefer to go through a gallery website than through the much larger, amorphous online platforms with their paid advisers.
Reactions to the report will not be known until it has been published and circulated. But certain qualifications are bound to be made in terms of the report, which predicts the irresistible rise of the online buyer and seller.
One could argue that the report is not objective or reflective of the art market as a whole because it is limited to contemporary art. Indeed, a survey of the sight unseen online selling of Old Master, 19th-century and 20th-century modern art would probably paint a very different picture.