The Art Basel and UBS Global Art Market Report shows that the online shift was already in place –  with Covid-19, it now has a new impetus

Galleries’ digital transformation accelerates

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The gallery sector is a resilient industry, says the latest edition of The Art Basel and UBS Global Art Market Report. As the global economy is thrust into a period of deep uncertainty amid the advance of the Covid-19 pandemic, one might take comfort in seeing how the sector withstood the challenges of 2019, including the China / US trade war and the prospect of Brexit. The report also sheds light on promising&nbsp;green shoots in 2019&nbsp;for&nbsp;the industry's long-awaited pivot towards the digital, a transformation that has now gained a new urgency.&nbsp;

According to Noah Horowitz, Art Basel Director, Americas, ‘As the industry faces the implications of a coronavirus-driven global downturn, it will be especially insightful to see what strategies win out in this rapidly changing landscape, and especially what role online sales avenues will play in connecting sellers, buyers, and all sorts of intermediaries.’‘Even in the best of times, running and successfully growing a gallery can be a challenging proposition,’ Horowitz continues. ‘Steadily rising costs, increased regulations, and limited access to external capital have placed elevated financial strains upon many such businesses. But galleries are nimble, and will no doubt continue to find innovative ways both to support their artists and to service their clients.’Broadly speaking, 2019 offered positive signals for the gallery business. Dealers saw growth even as the auction market contracted by some 17%, owing to a seller base who, amid profound political and economic change, shied away from selling art at public auction. Major players such as&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1103/David-Zwirner" target="_blank">David Zwirner&nbsp;</a>and&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1316/White-Cube" target="_blank">White Cube</a> expanded to Paris during 2019, contributing to a 7% surge in the French market. And, in contrast to 2018 – where the highest-end prospered most – the report shows that galleries with annual sales in the $250,000 to $500,000 and $30 million-plus ranges both made substantive, double-digit gains.

Those championing equity and diversity in the market will find a bright spot in the report: female artists made serious strides in gaining a foothold in primary-market galleries, those that represent artists (and estates) directly. While women still lag behind men, especially in the top tier of galleries, McAndrew’s report documents an uptick of some 8% year-on-year in the female percentage of their rosters, to a record 44%. ‘Art reflects changes in society,’ says London gallerist&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1262/Sadie-Coles-HQ" target="_blank">Sadie Coles</a>, ‘and this is really a reflection of society going in the right direction.’ Sales of women’s art climbed by the same percentage, from 32% in 2018 to 40% in 2019. ‘Collectors may be trying to catch up by collecting more artists of color and women artists,’ says Coles. While this may be seen as an unalloyed triumph, Emi Eu, founder of Singapore’s STPI Creative Workshop and Gallery, offered a voice of caution: ‘When you put the fire on suddenly,’ she said, ‘it can go out suddenly as well.’

But more than finding talent, dealers report their greatest challenge is finding new buyers. ‘You reach a saturation point,’ says José Kuri, of Mexico City gallery&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1182/kurimanzutto" target="_blank">Kurimanzutto</a>, which expanded to New York in 2018. ‘You can’t go back to the same collector 20 times.’ In the last year, Coles notes, ‘we have lost several serious patrons of the arts, like [Chicago-based collector] Stefan Edlis. We all need to encourage a new generation of deep collectors like them.’ Coles is looking to India as a possible future market. ‘Any gallery must be a truly international business now,’ she adds.The numbers show that dealers have been having success on that front, with the share of sales to new clients increasing year-on-year by 5%, to about one-third, in 2019. Some are finding those new buyers online: according to the report, galleries who sold via the web last year saw more than half of those sales come from new buyers. The online channel will also be key for reaching high-net-worth millennials (currently aged between 23 and 38).&nbsp;Of more than 1,300 HNW collectors&nbsp;surveyed in the&nbsp;Arts Economics and UBS Investor Watch report,&nbsp;<a href="https://www.artbasel.com/stories/millennials-art-market-2020" target="_blank">92%&nbsp;have&nbsp;bought art online</a>. According to Christl Novakovic, CEO of UBS Europe SE and the bank’s Head of Wealth Management, Europe, millennial collecting ‘offers significant potential for both the online and the middle market as a means to attract a broader base of new buyers at different price levels.’<a href="https://www.artbasel.com/catalog/gallery/17506/Galer%C3%ADa-Agustina-Ferreyra" target="_blank">Agustina Ferreyra</a>, who launched her namesake gallery in Puerto Rico and now runs an exhibition space in her Mexico City home, has found a handful of key new patrons partly because her millennial cohort has been ‘extremely collaborative’, organizing exhibitions together and showing one another's’ artists. Those kinds of moves, as well as participating in the ‘right’ fairs (Liste, Paris International, and Art Basel Miami Beach, in Ferreyra’s case) were the strategies that made 2019, for her, ‘a much better year than 2017 and 2018.’

One finding of the 2019 report is proving prescient against the backdrop of the current global coronavirus pandemic. With dealers last year relying on live events such as art fairs for 45% of their annual sales, in the new era of social distancing, the rush to digital is likely to accelerate. A diversification of online offerings is already underway, with galleries mounting Instagram-based exhibitions and new online viewing rooms.&nbsp;New York gallerist&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1248/Petzel" target="_blank">Friedrich Petzel</a> took the cancellation of Art Basel Hong Kong as an opportunity to show works by Derek Fordjour,&nbsp;<a href="https://www.artbasel.com/catalog/artist/8498/Wade-Guyton" target="_blank">Wade Guyton</a>,&nbsp;<a href="https://www.artbasel.com/catalog/artist/7099/Charline-von-Heyl" target="_blank">Charline von Heyl</a>,&nbsp;<a href="https://www.artbasel.com/catalog/artist/8499/Sean-Landers" target="_blank">Sean Landers</a>,&nbsp;<a href="https://www.artbasel.com/catalog/artist/8500/Seth-Price" target="_blank">Seth Price</a>, and&nbsp;<a href="https://www.artbasel.com/catalog/artist/7091/Heimo-Zobernig" target="_blank">Heimo Zobernig</a> at his uptown gallery, and simultaneously display them to a digital audience through his own website. Whether via a gallery’s own viewing room, Facebook, Instagram, or other channels, the rise in online sales over the previous year is ‘quite dramatic,’ observes Lucy Mitchell-Innes, of New York’s&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1223/Mitchell-Innes-Nash" target="_blank">Mitchell-Innes &amp; Nash</a>. ‘If the trajectory I saw continues,’ she adds, ‘there’s going to be a question mark about whether we need bricks and mortar real estate.’Even for galleries without the resources to produce slick sales platforms, the digital realm offers opportunities for creative contextualization and differentiation. ‘We can’t really create our own online platform,’ says Wendy Olsoff, cofounder of New York’s&nbsp;<a href="https://www.artbasel.com/catalog/gallery/1239/P-P-O-W" target="_blank">P.P.O.W</a>. ‘The bigger galleries have had the extravagant budget to hire cinematographers, to create videos of artists walking through their shows with music in the background...We wouldn’t go in that direction, so we’re thinking about how to be creative and invent ways of supporting our artists and our gallery online. There will be a period of experimentation, but with 38 years in this business we will strive to come up with something reflective of who we are.’

While acknowledging the human costs of the pandemic, whose scope is not yet known, Emi Eu suggests this could be a time for introspection. ‘It may be a blessing in disguise,’ she says. ‘Maybe we can reflect on what has happened in the changing art market in the last 15 years. We have to have a long-term vision.’Mitchell-Innes, too, counsels a long view. ‘There will be a rebound,’ she says. ‘People will get stir-crazy, particularly passionate and committed collectors. We will recover.’‘It might be time to not only rethink our role as galleries but even to ask, what is a gallery?’ says Ferreyra. ‘Is your space your gallery? Or is your program your gallery? A gallery is a vision, a story, a group of people who come together around common ideas. If we have that, we can find a way forward.’

The full, detailed findings of The Art Market 2021&nbsp;– the only annual, comprehensive analysis of the art industry, authored by cultural economist Dr. Clare McAndrew and published by Art Basel and UBS ­– can be downloaded for free <a href="https://www.artbasel.com/about/initiatives/the-art-market">here</a>.Top image: Detail of a painting by&nbsp;Laura Owens&nbsp;presented by Sadie Coles HQ at Art Basel Hong Kong 2019. Courtesy of the artist and Sadie Coles HQ, London.

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Welcome,

Galleries’ digital transformation accelerates

The Art Basel and UBS Global Art Market Report shows that the online shift was already in place – with Covid-19, it now has a new impetus

The full, detailed findings of The Art Market 2021 – the only annual, comprehensive analysis of the art industry, authored by cultural economist Dr. Clare McAndrew and published by Art Basel and UBS – can be downloaded for free here.

Welcome,

Galleries’ digital transformation accelerates

The Art Basel and UBS Global Art Market Report shows that the online shift was already in place – with Covid-19, it now has a new impetus

The full, detailed findings of The Art Market 2021 – the only annual, comprehensive analysis of the art industry, authored by cultural economist Dr. Clare McAndrew and published by Art Basel and UBS ­– can be downloaded for free here.

The full, detailed findings of The Art Market 2021 – the only annual, comprehensive analysis of the art industry, authored by cultural economist Dr. Clare McAndrew and published by Art Basel and UBS – can be downloaded for free here.