The Good News? Global Online Auctions Grew 63 Percent Last Month. The Bad News? That May Not Be Nearly Enough

Auction houses may be closed to
the public, but some buyers and sellers seem to have had no problem
exchanging a paddle for the click of a mouse. 

The number of online-only
auctions held around the globe last month rose 63 percent from the
equivalent period in 2019, according to new analysis from the
Artnet Price Database. All told, these sales generated $20.7
million—around 20 percent more than online sales made in March
2019, and a sweeping 75 percent more than in March 2018, when the
market as a whole was more robust. (Caveat: our database only
collects information on online sales that publish
prices.) 

Still, the question keeping
auctioneers up at night remains: Is the variety and volume of
transactions enough to sustain the business in the midst of an
indefinite shutdown?

The amount of money people are willing to shell out for art
online is still a fraction of what they have historically spent
during in-person sales, where buyers can get hopped up on
adrenaline—not to mention the certainty that comes with having seen
a work up close.

“Most economic and tech experts
say this situation is going to accelerate trends that already
existed, like the demise of retail,” says Michael Plummer,
cofounder of the advisory firm Artvest Partners. “Online sales are
going to go up because it’s hard to buy art any other way. But the
question is: what is the magnitude of the change?”

The amount buyers are
comfortable spending for an artwork online is likely to increase,
he notes—but it is unlikely to increase enough to make up for what
the houses are losing. Consider that the average price for a work
sold online last month was $6,859. That’s down 16 percent from
March 2019, and more than 500 percent less than the average price
of a work sold at auction IRL in 2019, which exceeded
$40,000.

Price isn’t the only limiting
factor. So far, the most reliable success stories online are by
brand-name artists and designers. Love them or hate them, demand
for artists including Banksy, KAWS, Yayoi
Kusama, and Yoshitomo Nara—those with internationally recognized
styles, prolific output, and a wide variety of price points—is
proving resilient. 

Last week, an online
contemporary art sale organized by Sotheby’s Hong Kong generated
HKD 10.1 million ($1.3 million), outpacing its high estimate of HKD
5.8 million ($748,382), as well as the equivalent sale last year,
which made HKD 3.9 million ($503,222). The top lots were two works
on paper by Kusama and Sleepless Night Sitting, a mixed-media work by Nara produced in an
edition of 300 that fetched HKD 600,000 ($77,419), shattering its
high estimate of HKD 120,000 ($15,483). 

Another unexpected boon of
online sales is the number of new clients they are drawing
in. Sotheby’s and Christie’s both reported between that
between 30 and 35 percent of their recent online bidders were vying
for material online for the first time, and almost 40 percent of
the winners were first-time buyers.

One frequent consignor to
auction attributed this buoyancy to a very pedestrian factor:
boredom. “We’ve been sliding some of the lower-value stuff in these
digital-only sales and I think people are so bored that the houses
are getting broader folks signing up to bid and the performance of
these things is higher than you might have thought,” the insider
says. 

Sotheby’s, in particular, has
been bullish about online sales in recent months, picking up speed
since its acquisition by telecom
tycoon Patrick Drahi and converting additional
in-person sales to digital-only events after its physical
salesrooms shuttered last month. (Sotheby’s sold 578 lots online in
March; Christie’s sold 60, according to the Artnet Price
Database.) 

“A lot of this was already in
the works and that is a function of what we’ve been seeing and
hearing from our clients,” Stefan Pepe, Sotheby’s chief product and
technology officer, told Artnet News. 

The strategy has been
particularly good for the auction house’s non-art luxury goods
segments, an area of increasing focus
for Drahi’s team. Since the shutdown, Sotheby’s has launched
weekly online watch sales and held multiple handbag and accessories
sales. The house sold a total of $13.4 million worth of objects
online last month, compared to $5 million in 2019, according to our
data. 

Christie’s and Phillips have
been comparatively slow to ramp up online activity, but both
promise there is more to come. Christie’s says it has more than
doubled the number of online sales it will offer in April and early
May, from nine to 20. “In this situation, in a crisis, it’s also a
moment of truth for online sales,” the house’s CEO, Guillaume
Cerutti, said in a call with press on April 7. “They are very much
at the top of our priorities.”  

The next two months will be a
test of whether auction houses can translate the momentum they are
generating online now to bigger-ticket items. Few believe a
traditional in-person sale will be possible in June, when the
auction houses have rescheduled their marquee May sales. Most of
the industry is gearing up for some kind of in-person/online
hybrid. 

“That will be the first real
moment in time when you could see to what extent the online sales
are going to substitute auction sales,” Plummer says. “I find it
hard to imagine that it will be a number anywhere near the amount
needed to offset what will be lost.”

Additional reporting by Eileen Kinsella

The post The Good News? Global Online Auctions Grew 63
Percent Last Month. The Bad News? That May Not Be Nearly Enough
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