The evolution of auction houses: How online capabilities reshape art buying experiences
The global online auction market for Fine Art and Collectable items has an expected value of $7.42 billion for 2023, growing at a CAGR of 11.5% until 2027, according to reports. However, the auction industry knows that advances in auction technology is changing how people consume Fine Art and collectables in modern times and that it is crucial for them to develop a strategy to integrate auction software into their business strategy.
Auctions aren’t simply about selling – they can also contribute significantly to brand-building. This is because customers do not just purchase goods when they engage in an online auction but instead ‘win’ them. This small- but crucial- difference transforms what could otherwise be a simple or routine transaction into a far more complex and emotional exchange. So, how can brands leverage auction technology to tap into that emotional element, and how can this help market your business?
The power of the online auction
Large auction houses have long supported using digital media to sell rare art and unique pieces to the international market. After all, not all who may be interested in bidding and acquiring a particular piece can be physically present or send an in-person representative to an in-room or live auction, especially if they’re from overseas. As such, conducting auctions online means these companies broaden their clientele and reach to include buyers from other parts of the globe. This is particularly true following the effects of the global pandemic and subsequent restrictions on large gatherings; it is also representative of the younger generation of online bidders who naturally gravitate to digital experiences.
Online capabilities will also help art galleries and auction houses improve buyers’ overall experience. Besides, younger buyers are comfortable and, in many cases, prefer making purchases online.
Digitalisation is easier access to information
Digitalisation creates transparency for collectors, as well as provides them with easier access to information. Bidders or collectors can increasingly access more information about certain pieces easier than before. Unlike in-room auctions, where you only have the information provided by the auctioneer, online auctions make it easy for you to do valuable research about a particular artwork, artist, craftsman, and unique piece before you decide to participate in the auction and actually make a bid.
Buyers and sellers are embracing digital transformation
When the global lockdown happened due to the pandemic, online auctions had to replace in-room auctions at the drop of a hat. Bringing auctions online was already something the industry saw evolving in future years, with some auction houses already gearing up for gradual change. But because of the Covid-19 crisis, what was supposed to take years needed to be done overnight. As a result, most auction houses and art galleries had to implement a digital strategy within weeks rather than years.
According to Essential Information Group, auction volumes did drop some 20% yearly, but this is already an achievement considering how the broader market is doing. The auction market has managed to maintain its position in the industry by quickly moving online. After all, there was still demand and money in the market. The numbers show that buyers and sellers have embraced the change. Moreover, conducting auctions as a live-streamed event is the closest companies can get to recreating in-room auctions.
(2/2) Christie's spectacular growth in digital engagement: nearly 80% of bids in all auctions are now placed online, nearly doubling since pre-pandemic 2019 (45%). - Christie's
Online capabilities will also help art galleries and auction houses improve buyers’ overall experience. Of course, nothing beats seeing the pieces up close with your naked eyes, but this is where the best images come in. We now have high-definition cameras that can capture clear, crisp, and life-like photos, allowing potential buyers to view the pieces and make informed buying decisions. Besides, younger buyers are comfortable and, in many cases, prefer making purchases online.
What is coming next?
With digital transformation well underway and auction houses adopting today’s new reality, what else is there to look forward to other than online auctions or live-streamed events?
Immersive and interactive, augmented reality is one of the most desirable must-have auction houses are looking for, where potential buyers can view a painting, print or work of art in situ on their wall at home or in the corner of their favourite room. Virtual reality headsets can potentially bring the traditional auction experience into the homes of online bidders. They would no longer be content with looking at pictures on their screens, but they could use VR headsets to walk around the display room and observe the pieces in their three-dimensional glory. In effect, potential buyers can get the emotional and competitive feel of going to the auction and bidding without leaving their homes.
NovaFori Digital Auction Solution for Digital Transformation
At NovaFori, we have every aspect of running an auction covered, from understanding auction theory to testing the market and implementing your ideal trading model to unlock the maximum value for all parties.
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