art market special: ‘fair’ experiences for future growth

 

Dipl.-Kfm. (techn.) Detlef Schmidt, Stuttgart, Germany

September 28, 2021

 

After having sorted out on-site experiences of a recent 6-day visit at Art Basel, the world’s largest contemporary art fair in Switzerland, a clearer picture emerges. Based on own observations and discussions with gallerists, art advisors, and, of course, art collectors, the feedback is remarkable. 

 

 

From Art Basel to an Outlook for the Art Market

 

Art Basel survived the pandemic in a decent shape with 272 premier galleries from 33 countries presenting. But there are also reasonable doubts whether the current art fair model is a model that is future-proof enough, since the number of visitors (60.000) dropped by around 35% compared to the last fair in Basel in 2019.

 

The global art market has performed well during the last decade. Since 2018, global sales have been slowing down, especially in 2020 during the pandemic (-22%). Research indicates a correlation between the art market and the stock market, with the stock market being slightly ahead of the art market. As we are currently seeing sideways movements on the stock market due to emerging inflation- and interest rates risks, the mid-term outlook for the art market is likely to be relatively flat as well.

 

Even though galleries reported solid sales, euphoria as seen in the years before 2020 was missing. Instead, a certain kind of reluctance on both the buyer and the seller side was widely noticeable. Lower visitor numbers cannot be argued only with missing clients from the USA and Asia. Also, those who are still afraid of the pandemic explain only parts of the truth as the fair management set up a fantastic security concept. In addition, a new factor needs to be considered wisely: Behavior changes of fair visitors in general and buying behavior changes of the art buyer. Often misinterpreted as an outcome of the pandemic, these changes have a lot to do with long term social trends and were simply accelerated during the pandemic.

 

 

Important Challenges Ahead

 

Now, it is about time to take the behavior changes of the art buyer seriously. Therefore, the art ecosystem has now to do its homework. And the changes we have seen are not only about digitalization, digitization or NFTs. To meet the needs of current and future buyers, a new thinking is required that is not common practice in the art industry yet. It is about rediscovering the customer in all phases of a client relationship and about maximizing the customer’s value along this relationship.

 

This approach is the only recipe that will help to protect the status quo of the industry. There are prominent examples of other industries that discovered the changing buyer behavior too late (e.g. automotive industry including its largest fair @IAA) with the effect that former major players have dramatically become less important. Also in the art market, new players and future competitors are gaining strength at a very fast pace, being backed up by lower fix costs and digital business models, serving the customer in a more holistic, better and faster way.

 

Call to Action

 

Do not get me wrong: I do not see the art market becoming a purely digital marketplace replacing art fairs and traditional gallery work. But I see a huge demand for curating better experiences for clients which will help to protect current business models and client relationships. Experiences that put the value for clients in the center stage and use technology wisely. This is the order of the day.

 

It’s time to shape the art market. Jointly!

 

For more information and press inquiries please contact info@viable.design

 

 

Write a comment

Comments: 4
  • #1

    Wolfgang Burr (Tuesday, 28 September 2021 16:36)

    A good and short characterization of this fantastic event. If you want to see what could happen in the art market, look at the similiar and related markets for antiquarian books and oldtimer cars: Prices for "mass" products (like Porsche 911, Mercedes), decline, only excellent and very rare objects of high quality in top condition are intensively looked after by collectors at the moment. And second to note: There are very few young collectors for vintage books and cars. Often collectors are 60+ years old and have a high income. To whom will they sell their beloved items in 10 years?

  • #2

    Detlef Schmidt (Tuesday, 28 September 2021 20:23)

    Thanks a lot for sharing your expert view as a professor and as a connoisseur, dear Wolfgang Burr. You are absolutely right with your statements and your wise question at the end: It's about creating and shaping markets these days. In the end, the success will be with those market participants who regard the customer relationship as an integrated process and who are able to curate it accordingly.

  • #3

    Karin Mahle (Friday, 01 October 2021 08:12)

    As long as you show art that excites the art buyer, the art fair will remain the center for experiencing art as something you can own. But how much have art fairs in the past created a hype that kept feeding itself? As soon as there are less visitors and less of a humming in the air, the feeling of "I have to have this" will lessen in the art buyer and the more they will think of how this will look above the sofa. How do you create a humming with less visitors?
    The art market will have to work harder at convincing buyers that they want something without the peer pressure of a big attendance. Gallerists have known how to get the artists they believe in published and they will have to do more work to familiarize the art collector with a new aesthetic.

  • #4

    Banafshe Esfahani (Friday, 01 October 2021 12:49)

    In my opinion, there is a large group of "non-collectors" and non-art- connoisseurs" that are left out of the equation in fairs - almost completely. It's almost like the fashion world and haute-couture. People are not always approachable and not open to initiate a conversation with someone who is interested in art and would even buy art - only if the art world would open their arms just a tad bit :-)

    Of course this is a very long discussion, but I tried touching its surface.

    A few new or innovative events during fairs that target specifically on making artists, their art and galleries accessible as a genre to those who want to understand more would be a cool fresh breeze I think....