How 2020 Changed the Auction Market for the Better

For the past 250 years, art auctions have stuck to the same format with an almost astonishing fidelity.

People who want to sell art (consignors) give it to an auction house, which prints a catalogue with some fancy language about the artwork and then sends it to prospective clients (bidders). On the day of the auction, the room is filled with these bidders and/or bidders’ representatives such as art advisers, art dealers, and auction specialists. One by one, works sell, or don’t sell, until the auction is over. And then it repeats.

The persistence of this format—through war, famine, and technological revolutions and geopolitical upheaval—is strange, considering that no one particularly likes it.

Not the consignors, whose art might not sell; not the auction houses, which have to spend huge sums of money to market the art to a small group of people; and not the bidders, who find, often as not, that the auction is structured to make them pay more than they’d planned.

Yet auctions stayed the same because the format worked. Year after year, art was bought, sold, then bought once more.

This year, it stopped working. 

The pandemic “has accelerated changes in every industry, and maybe the art market more than any other,” says Guillaume Cerutti, the chief executive officer of Christie’s. “The speed and magnitude of changes we’ve seen—no one could have predicted it.”

This isn’t just about digital sales, a phenomenon auction houses could predict, given they’d been trying to get people to buy and sell online for more than a decade. “To me, that’s just the sort of obvious face of what people see,” says Charles Stewart, the CEO of Sotheby’s. “The digital pivot [was] out of necessity—and also, conveniently, it’s what we thought needed to happen, anyway.”

Instead, the pandemic changed auctions from the ground up, starting with their competition.

“One of the reasons [we’ve] been so successful is the significant disruption in the rest of the market, in terms of a complete cancellation of almost a whole year of art fairs,” says Ed Dolman, the CEO of Phillips. “Auctions were probably the easiest way for most people to engage and buy and sell art through this period. And we benefited from that, hugely.”

Auction houses weren’t the only ones who benefited. Suddenly, those consignors who were worried that their work might not sell had a captive audience. In fact, Christie’s, Sotheby’s, and Phillips each held a series of “white glove” sales, meaning that every work sold.

That’s partially because, with the move online, the tiny group of bidders once courted exhaustively by auction houses has grown.

“Forty percent of clients this year are new bidders to Sotheby’s,” says Stewart. “What underlies that is an enormous and concentrated effort [directed at] every aspect of how we identify and engage our clients.”

Even things that felt minor, such as scrapping most pricey print catalogues, had major implications for the auction houses.

“There’s a lot of good things about print catalogues; that’s why we still have them,” says Stewart. “But the problem is that they actually conceal a lot. You don’t know if people who’ve got them [read] them, or have decided to bid or not. You’re blind.” In contrast, he continues, “in this digital-first world, you know when people come to the site, and how much engagement there is in a given sale or a given lot.”

Bidders, for their part, haven’t entirely wiggled out of the high cost of buying art. Auction houses are still in business to make money.

But many of the ancillary components of bidding at an auction, particularly the urgent need to travel, have been eliminated.

“There was something about the art market before, which was very much about being one day in Basel, the next day in Hong Kong, the next in Los Angeles,” says Cerutti. “But I think things are different now. First, because people have discovered the virtues of virtual tools, but also because people have realized that part of this was a bit artificial. You don’t have to be in every fair, or in every place, to collect art.”

The test of 2021 is whether these changes will stick. 

Some of the changes are surely here to stay. Online-only sales aren’t going anywhere anytime soon. Others, such as the diminution of art fairs, are obviously more temporary.

What’s clear is that the art auctions of recent centuries are a thing of the past. “It’s not the end of the [auction] model, but the model has been altered and changed in a major way,” Cerutti says. “And for the better, I hope.”

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