An important message in the Hiscox Online Art Trade Report 2014 is that although the online art market shows continued growth, systemic barriers exist which could risk the market’s future potential.
Hiscox’s analysis (based on research carried out by ArtTactic) suggests the online art market may be undergoing a sudden evolutionary shift similar to that which traditional retail experienced in 2005 – a year considered to be a ‘tipping point’ in the development of retail e-commerce. The growth of the online art market, forecast to rise from $1.57 billion in 2013 to $3.76 billion in 2018, is being driven by a number of factors: the maturity of the web (including the mobile web), increased buyer confidence in making high value online purchases, and high levels of venture capital in sales platforms (Hiscox list $80m worth of investment across a range of online platforms in 2013-14).
However, in order for the market to reach its full potential, the development of further infrastructure and services to underpin important elements of the buying process will be needed. Buyers and the platforms they use will require more information and sales support services such as transparent sales histories, independent valuations, and certificates of authenticity.
The authors point out that the online art market is not a model of ‘either/or’ where online replaces traditional art sales (Robert Read’s introduction suggests “it’s inconceivable that traditional art galleries will go the way of the record shop and cease to exist entirely”). Integrated digital strategies are therefore required to meet the needs of buyers who have a ‘blended’ approach to discovering and purchasing art.
Traditional concerns such as seller reputation are “even more important” in the online art market. Such concerns offer “significant opportunities for traditional art players” but only if they get their digital strategies right (a concern Sotheby’s knows all too well). There will also be significant opportunities for new ‘enabling’ rather than ‘disruptive’ technology-driven enterprises in building the infrastructure required to support the next era of the online art trade.