Coronavirus and the Art Market: A Gen Z Perspective
Hello and welcome to my blog, ArtZ. I’ve been passionate about art and art history since I was a young kid. During my high school years, I participated in a summer internship program at the Rubin Museum in New York City and spent much of my free time exploring the collections and taking courses at The Metropolitan Museum of Art, The Frick Collection, and other cultural institutions throughout the city.
Now, as a rising senior at the University of California — Los Angeles, I am pursuing a degree in economics, history, and art history. The rapidly evolving international art market has borne witness to incredible opportunities for growth at the crossroads of business, economics, and technology. My background in economics and financial markets, coupled with my excitement about art and art history has led me to create this new blog, for an audience of other Gen Z’s. I hope you enjoy and keep in touch as I explore various aspects of the art markets and how our generation can get involved.
The spread of the Covid-19 virus has sent shockwaves around the globe, forcing individuals and businesses alike to reexamine and adjust nearly all aspects of typical social and economic life. The consumer goods industry has borne the brunt of the commercial fallout as distribution channels and supply chains have been drastically altered — and in some cases completely eliminated.
The art market has been no exception to this painful reality. Several of the premier art fairs, auctions, and exhibitions were forced to cease operations in the Spring of 2020 amidst the rapidly increasing numbers of cases of coronavirus. With the majority of traditional platforms for art sales shutdown, the market has transitioned towards alternative sales channels in order to sustain growth.
The questions we must ask about these sudden developments are: will this dramatic emergence of an online art market be sustainable post-Coronavirus and which actors stand to gain the most in the long-term?
Although the online market saw an increase in growth of 4% in 2019, overall levels of growth have retracted from their high of 12.5% in 2017¹, a reflection of tightening global demand and a reluctance from sellers to dedicate resources towards alternative sales channels. In 2019, global sales of art and antiquities reached $64 billion dollars, a fall in sales of roughly 5% year-on-year.² However, the sale of art and antiquities via the online market generated a mere $4.8 billion, accounting for only 7.5% of those total art sales in 2019.³
This all changed with the arrival of the pandemic. The near universal social distancing measures put in place around the world have challenged the dynamics of the art ecosystem. No longer were primary and secondary market players able to rely on traditional sales models. Instead, art galleries and auction houses have been forced to reconsider the means by which they promote and maintain sales of their art. Shifting resources away from physical spaces towards online sales channels has been the solution to this problem, with pure online-only auction sales at the major auction houses, Christie’s, Sotheby’s, and Phillips generating $370 million in the first half of 2020, a staggering five-fold increase in comparison to the same period last year.⁴
I believe this trend will continue to grow in the coming years as sellers transition away from conventional art forums towards increasingly progressive, interactive spaces that are more appealing to a younger generation obsessed with virtual engagement and social media platforms.
The art market has been slow to adapt to an age of increasing globalization and technological dependency, instead opting to rely on conservative platforms that have hampered online sales growth. In light of the recent socio-economic conditions unleashed under the spread of the coronavirus, the larger allocation of resources towards an online market is just what the art environment needs to disrupt the long-established industry standards and foster a stronger, more meaningful connection between artists, market agents, and prospective buyers.
These factors will become paramount in the coming years as younger generations of art collectors mature and grow in consumer spending power. A recent study examining the effects of the coronavirus on consumer spending habits found that Millennials, the largest population segment, are on the cusp of their peak spending years, with a 10% increase in discretionary goods expected within the next five years.⁵ Similarly, Gen Z consumers will increase their spending by roughly 70% in that time frame.⁶
The 2020 edition of the Art Basel and UBS Global Art Market Report found that high net worth millennials are now the fastest-growing constituency of collectors, buying more art at the top-end of the market and spending more on it than any other demographic.⁷ As Baby Boomers and Gen X consumers continue to wane in importance over the coming years, art vendors will need to develop a critical understanding of the marketing strategies needed to attract a younger audience. Given the Millennial’s and Gen Z’s affinity for online platforms, the galleries and auction houses that most aggressively invest in alternative sales channels stand to gain the most — both in immediate and long-term benefits.
Although the spread of Covid-19 has wreaked havoc on the global economy, it presents a rare opportunity for the art market to revolutionize the ways it conducts its commercial activities. For too long the art market has relied on conventional platforms to handle business operations, rejecting avant-garde measures in favor of the status-quo. The art market business model must adapt to this new future if it wishes to sustain meaningful, long-term growth, and attract a new generation of potential buyers and collectors.
[1] Hiscox, ArtTactic. (2020). Hiscox Online Art Trade Report 2020.
[2] Art Basel, UBS. (2020). Art Basel and UBS Global Art Market Report.
[3] Art Basel, UBS. (2020). Art Basel and UBS Global Art Market Report.
[4] Art Basel, UBS. (2020). Art Basel and UBS Global Art Market Report.
[5] Boston Consulting Group (2020). How Marketers Can Win with Gen Z and Millennials Post-COVID-19.
[6] Boston Consulting Group (2020). How Marketers Can Win with Gen Z and Millennials Post-COVID-19.
[7] Art Basel, UBS. (2020). Art Basel and UBS Global Art Market Report.
