In contrast to the declining fortunes of the broader art market, the first six months of 2024 showed an average growth in online sales of 6%, which, assuming a constant growth rate through year end, would amount to $11.6 billion in online sales, or twice their level in 2019. The peak of this online sales growth was experienced in the online-only auction segment, with Christie's, Sotheby's, and Phillips demonstrating the most substantial numbers — a 38.8% year-on-year rise in sales.
The Artnet IR report notes that some art market players are responding to the downturn by taking a step back, rethinking how they do business, and "adopting new approaches to generate excitement around art." This suggests, in at least some quarters, a desire to experiment with innovation and new business models. The fact that the online art market has managed to grow despite the broader market downturn in 2024, driven in part by younger, digitally savvy collectors who are more inclined to discover art using online platforms and to purchase art online, can only inspire confidence in this kind of new thinking and departure from traditional modes of operation. Paradoxically then, the current adverse market conditions may encourage interest and investment in new digital solutions for art businesses and create the opportunity for broader participation in the online art market across the industry.
The Rise of Online Art Sales
The slump in high end art sales has been a key driver of the art market contraction this year. However, demand at the lower end of the market has been more resilient according to the 2024 Art Basel & UBS Survey of Global Collecting, and since online sales tend to be dominated by artworks in lower price categories, leveraging online sales channels offers a robust strategy to help art businesses to offset the current market headwinds.
The Enduring Effects of the Pandemic
The pandemic was pivotal in the growth of art e-commerce, with online art sales doubling in value in 2020 to reach 25% of total market sales. By 2023, as the market stabilized, the share of online sales decreased to 18% — still more than twice the level seen in 2019 or any prior year.
A significant, transformative, and long-lasting effect of the pandemic was the normalization of online buying among collectors, including among the wealthiest segment of buyers. The 2024 Survey of Global Collecting reported that for High-Net-Worth Individuals (HNWIs), buying art through a gallery or dealer was the most widely used sales channel in 2023 and 2024. However, the survey also found that in the first half of 2024, these HNWIs had transacted with galleries and dealers in multiple ways: 74% had purchased at their gallery or premises; 72% directly through their website or online viewing room without viewing the work in person first; 61% via email or phone call to dealer without a viewing; 43% via their Instagram account without viewing the work in person.
Multi-platform buying is now undoubtedly a much more conventional art buying practice than before the pandemic, and the proportion of that buying being done online is growing. 2023 for instance saw 35% more buyers purchasing art online from traditional galleries and auction houses according to the 2023 Hiscox Online Art Trade Report.
The report also notes that familiarity with online buying and selling, thanks in large part to the effects of the Covid-19 pandemic, has improved collective trust in online platforms: more than half (51%) of art buyers said that their confidence and interest in buying art online art had increased during the pandemic.
Online Auction Bidding
The rise of online art sales also reflects a growth in online auction bidding. Thus, Christie's reported that their global share of bids placed online increased by 3% year-on-year, from 79% in H1 2023 to 82% in 2024, highlighting the virtues of enhanced digital reach. Based on sales with published results, the number of online-only auctions at Christie's during this period was relatively stable while the number of live sales fell by 13%. Bonhams also saw their online-only sales rise by 48% as the auction house continued to add new auctions from its expanded network, while live sales were down by 21%.
Factors Behind the Strength of the Online Art Market
Shifting Sentiments Among Collectors
As we already noted, collectors have become more comfortable buying art online, but they have also become more accustomed to discovering art online. There has in fact been a considerable amount of research devoted to understanding how the tastes, interests, preferences, habits, and behaviors of younger, newer generations of millennials and Gen Z collectors differ from their older peers.
Younger collectors (aged 36 or younger) are taking a digital-first approach to discovering and collecting art: 47% of individuals from this group are using online marketplaces as channels to discover artists and purchase their works via online marketplaces. Another interesting observation: younger collectors spend a more substantial share of their art budget buying art online — 42% said they allocated over 75% of their total art expenditure last year to online purchases.
The Array of Online Art Platforms Widens
The universe of online art marketplaces is flourishing, and features all sorts of platforms and sellers from established galleries and auction houses selling blue-chip art pieces to online retail platforms offering artworks for sale directly by independent self-promoting and emerging artists. Greater technology adoption across the art world has been at the heart of this online art marketplace renaissance.
One of the first companies to bring technological change to the art space and to offer collectors the opportunity to discover and purchase art online was Artsy, founded in 2010. In 2019, the company pivoted from feeding leads to galleries towards a full-blown online marketplace model. Today, there are about 1.2 million artworks for sale on Artsy’s platform; the company has over 4,000 galleries, auction houses, art fairs, and institutions in over 100 countries, and offers transactions in three different currencies. According to CEO Jeffrey Yin, Artsy think of themselves primarily as a product-led technology company that focuses on building products and solutions to solve customer problems and needs.
When the pandemic hit in 2020, another important contributing factor to the evolution of the online art market was the launch of Sotheby's online e-commerce venture "Buy Now." The platform allows consumers to purchase fine art and other luxury items directly and with transparent prices, diversifying from their traditional auction sales model.
While Artsy is an online art marketplace that has been a technology company at its core from the very beginning, Sotheby's "Buy Now" is a good example of how a traditionally staid brick-and-mortar art company reconfigured their business model using a "digital-first" approach in response to the closure of in-person auctions in 2020, and going forward, to better cater to the expectations of younger and more digitally native collector.
Price Transparency
An important aspect of the online buying experience for collectors and a key ingredient in the online art sales success story is price transparency. For example, Hiscox reported that in 2018, nine out of ten new buyers said price transparency was a key attribute and criteria when buying art online. Seeing transparent prices for art allows buyers to make more informed decisions on their purchases. The desire for price transparency represents another transformative impact of the pandemic on the art market: the 2023 report goes on to state that “The traditionally secretive art world has had to be much more transparent about its pricing since the pandemic”
Evolving Benefits and Opportunities
Returns to artists and art businesses that invest in the online art market and in boosting online collector engagement can come in a variety of forms beyond pure art sales transactions.
Reaching New Audiences
One important benefit of online marketplaces and sales channels is that they expand the reach of artists and galleries to collectors that they otherwise would not be able to connect with. As the 2023 Hiscox Trade report remarks, “Almost a third (31%) of young buyers and 37% of new art buyers said they bought their first ever artwork online which suggests that this market plays a crucial role in drawing in new generations of collectors.”
Increased Sales Enquiries
Artsy’s experience demonstrates that participation in online marketplaces and sales channels, particularly during special online sales events and fairs, can translate into higher rates of sales enquiries from potential buyers. During Artsy’s "tentpole" moments, like their Foundations fair for instance, participating galleries on the platform have seen up to a 40% rise in enquiries and 33% sales growth through e-commerce according to CEO Jeffrey Yin. These events drive flow and traffic to their partners.
Hyper Personalization and Convenience
The increasing adoption of AI technologies and models capable of processing and utilizing vast amounts of data to provide rich macro and micro insights into what kinds of artworks are selling well across disparate regions and demographics, or what artworks may interest individual collectors, gives online art platforms and marketplaces an unprecedented opportunity to understand market fluctuations better, know their customers more intimately, and introduce or strengthen personalized recommendations to collectors based on their online activities, actions, searches, buying habits, how they engage with specific artists, and so on.
The art businesses that stand to benefit the most from the new wave of AI technologies sweeping across many sectors of the economy are those that either have access to, or have already been capturing and accumulating, market data and information about their online customers. Artsy, for instance, captures and analyzes the activities and behaviors of their platform users and creates collector personas based on this information. AI will allow such companies to glean even deeper insights into their customers and the overall market and offer better online curation to show users the most relevant art to their collecting needs.
On the other side of the coin, as AI becomes more tightly integrated into the personalization and curation features of these platforms, the search and discovery process for collectors will become faster, easier and more intuitive, along with greater access to contextual information about the artists and art they are inclined to follow, which is likely to lead them to purchase more art online. This added layer of convenience and information supplements the integration with third party payment systems like Stripe that has already made art transacting online so much easier, further improving the online buying experience for collectors.
Expanding Access to High End Art via Fractional Ownership
Fractional art ownership via online auction bidding is one exciting trend to watch. Fractional ownership through an auction process allows individuals to buy and trade “shares” of masterpieces themselves in a regulated, transparent marketplace, making expensive art more accessible to a wider audience without relying on intermediaries or art experts deciding which artworks to invest in. Bidding and buying of those "shares" can now be done through online platforms such as aShareX, which is a real-time, auction bidding platform dedicated to democratizing investment in high-end art via fractional ownership.
Conclusion
There are so many ways artists and art businesses can benefit from greater participation in the online art market and explore new value propositions through innovative digital solutions. There is also a larger theme in play here: the online art market can act as a gateway for people who are looking for greater points of access into the art market. One of the biggest benefits of participation the online art market is its democratizing effect: by giving artists and art businesses greater reach and opportunity to acquire new customers, broader art market growth can be achieved by attracting larger numbers of new collectors, instead of through ever increasing, but in the long run unsustainable, price points. The resilience of the online art market in recent years shows much promise and potential for artists and art businesses willing to join the fray or try something new.
