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Art Market

6 Market Experts’ Top Takeaways from This Summer’s Virtual Auctions

View of the salesroom during Sotheby’s 20th Century & Contemporary Art Evening Sale New York Auction on June 30,2020. Courtesy of Sotheby’s.

View of the salesroom during Sotheby’s 20th Century & Contemporary Art Evening Sale New York Auction on June 30,2020. Courtesy of Sotheby’s.

Forced to shut down their physical salesrooms and call off their major evening sales because of COVID-19, the art world’s leading auction houses rebounded this summer with a series of blockbuster virtual sales that spanned multiple categories, continents, and currencies. While the hours-long affairs felt at times like telethons or Home Shopping Network programs, they also confirmed that a decade of technological innovation could be crammed into the span of a few months. Many of the changes expedited to make the sales happen during quarantine will now likely be permanent fixtures of how Christie’s, Phillips, and Sotheby’s do business.
Beyond the shifts in how art auctions are conducted, this summer’s marquee sales can tell us a great deal about the state of the art market in the midst of a historic global crisis and the economic hardship it has engendered. I asked six astute art market observers for their insights on the auctions—what worked and didn’t; what surprised them—and what they can tell us about where the art market is headed.

Evan Beard

Executive and managing director of National Art Services at Bank of America

What was your overall impression of the virtual “live” auctions?
I was actually very impressed with the entrepreneurial spirit of the auction houses. It was far from certain that people would accept not being able to see works in person, or be open to bidding on the work online. But we saw those things were possible. We also have to give credit to Sotheby’s for the production values of their major sales, which I think raised the game for the entire industry. They brought in a production company and really did make it into a visually pleasing experience, which quite honestly I think will be here to stay.
What was a factor that significantly shaped how the auctions played out that less-seasoned observers may have missed?
The first one is a macroeconomic one: We should all be writing letters to the Federal Reserve thanking them for the performance of this auction season. The Fed really turbocharged this auction season—Federal Reserve policy was the real behind-the-scenes winner. The second is that all these houses were already investing in digital, but you’ve got to give credit to the management and leadership who fast-tracked the adoption of digital systems. It was a herculean effort in a really small amount of time.
Was there one particular lot or collection whose performance surprised you?
The Ginny Williams sale was an example of a confluence of forces where you had a compelling, interesting, biographical story of a really radically interesting collector that you could tell. The evening sale did great—second-generation female ’ work is hot—but what surprised me were those day sale works, the photographs, the really low-value items, works on paper, things we didn’t pay a lot of attention to; they performed really well because people were buying that story and that aura.
The auction houses are becoming very, very good at creating a brand umbrella utilizing digital storytelling, and it’s easier to do now with the multichannel digital landscape and very thoughtful PR strategy—that’s a lot more compelling than the big brick catalog that would show up at your door that you’d have a couple days to look through. You’re going to see a further convergence with fashion, with the telecommunications and media world, because the auction houses recognize that the big value they can deliver is to take a collection that may or may not be coherent in any way, and build a really interesting narrative around it, and we saw that perfectly with the Ginny Williams collection.
How do you think this summer’s virtual sales will influence future auction seasons?
Over the last 50 years, we have gotten used to the six-month auction cycle. You have a six-month cycle in London, New York, and Hong Kong, and the world is divided into two six-month cycles. I think this digital environment is going to completely blow that out of the water, and what you’re going to see is a much more fluid auction cycle where you’re going to have lots of smaller sales—they’re going to be themed sales, cross-category sales. When a major collector dies, they’re not going to wait until November; they’re going to do it at the best possible moment that could make sense with what else is coming out on the market or what other global events are happening at the time. What the auction houses are learning is that the six-month sales cycle, that’s 2.0. In the 3.0 phase, there’s going to be a lot more flexibility and we’re going to be breaking out of that six-month cycle.

Astrid Hill

Art advisor and founder of Monticule Art Advisory

What was your overall impression of the virtual “live” auctions?
I measure the success of any auction by the sell-through rate and whether there is competitive bidding for a given work. That is often a function of whether the work of art is fresh and new to the market, whether it is priced appropriately, and whether there is a third-party guarantee at a high price, which may stifle competitive bidding. The flip side of this dynamic is that I really don’t like it when a work that has been guaranteed is hammered down at the guarantee price, which effectively means that the work has been pre-sold at a high price, the antithesis of a competitive auction. It literally takes the air out of the room. An example of a well-orchestrated result was the Triptych Inspired by the Oresteia of Aeschylus (1981) at Sotheby’s June 29th sale, which sold for $84.5 million.
In terms of user experience, as a consumer, what you care most about is whether the technology actually works, which translates into ease of access as well as efficiency and therefore a positive user experience. Delays and bad orchestration of the bidding process can turn off potential buyers. It is like staging a theatrical production where you want the curtain to come up on time, you want the actors to know their lines (and yet be spontaneous), and you want the production to be over while your audience is still engaged. Sotheby’s did a particularly good job of creating a good user experience this past June.
Was there one particular lot or collection whose performance surprised you?
I was surprised that the beautiful diptych Complements (2004–07) from the Donald Marron collection, sold in Christie’s July 10th sale, did not have more active bidding. For those people who knew that the picture came from the Marron collection—which was sold to a consortium of three dealers: Acquavella, Gagosian, and Pace galleries—there may have been a question of why the picture was being sold at auction so soon after.
How do you think this summer’s virtual sales will influence future auction seasons?
Using the theater analogy again, a well-orchestrated auction is similar to a well-constructed play—imaginatively conceived and flawlessly executed. In the future, auction houses will use a hybrid formula utilizing in-person attendance and virtual, online participation. I believe that auctions will occur more frequently, with better tools to educate the audience on works that are in a given collector’s “sweet spot.” Using data science techniques of tracking likes/dislikes, auction houses will be able to target those customers who are interested in buying the works of a particular artist and even be as specific as to target the type of work.
Pattern recognition is commonplace in other business practices but has not been effectively adopted by the auction houses. For instance, Google knows more about what you are going to search for next than you do yourself. And Amazon knows exactly which books and which other products you’re going to want to buy before you buy them. The auction houses are working on developing this same level of being able to target their audience’s appetite. Once the auction houses have identified the buyer’s interest, then they can target specific works of art so that each prospective buyer is given access to what they want. It will be interesting to see what happens in the November sales. Auction houses need to show they can put together sales of fresh materials and get prices for them.

Beverly Schreiber Jacoby

Art advisor and founder of BSJ Fine Art

What was your overall impression of the virtual “live” auctions?
It was surprising (to me) that one could draw such a large contrast in real-time experience between the Sotheby’s and Christie’s auctions. Technologically, think Boris Johnson when you say Christie’s; Sotheby’s was closer to Elon Musk. There are broader inferences to be drawn.
What was a factor that significantly shaped how the auctions played out that less-seasoned observers may have missed?
I don’t think it got much notice at the time, but the sales’ titles were revealing. Post-war and contemporary sales were what was the default mindset, but such were incidental to a much broader and peculiar array, [as in Christie’s] “ONE: A Global Sale of the Twentieth Century.” The manicured sales were filled with geographically, stylistically, and chronologically odd lots stitched together into a patchwork quilt of saleable property. Works that were guaranteed, works that had surefire bidders lined up in advance, works that had to be sold. When was the last time and were in the same sale as and ?
How do you think this summer’s virtual sales will influence future auction seasons?
The COVID-19 crisis has prompted a sudden disaggregation of the auction sale process. The ability or lack of ability to view works of art in person was always the key issue. Buy from an image or buy from viewing in person? Auctions—selling—in real time can be transferred to virtual space, but seeing works of art in person has no real substitute, at least not yet. All of the strategies (close-ups, 360-degree, videos, etc.) remain less than optimal. The viewing technology may be a work in progress, but it is not yet good enough when the price point is high. It has been acknowledged that works were brought to individual buyers for viewing, evidence that the expense of making viewing possible to some is part of the new business model.

Elizabeth Margulies

Art advisor and founder of Elizabeth Margulies Art Consulting

What was your overall impression of the virtual “live” auctions?
To have a first-time, virtual live major auction with record-breaking prices is impressive. To have a Bacon sell for $84 million and a 1994 for $46 million suggests that the art market is still strong, and represents a possibility of future art sales at virtual live auctions.
What was a factor that significantly shaped how the auctions played out that less-seasoned observers may have missed?
I think not being able to see the works in person plays an important role here. If you are a seasoned collector and you see something great come up at auction that you can afford, you recognize that. You don’t necessarily need to see the work in person if you know that particular artist’s work, have seen their work many times before, know what years of that artist’s career are important, etc. For novice collectors and people who are just starting to get into the art game, they may be at a disadvantage here.
How do you think this summer’s virtual sales will influence future auction seasons?
Who knows what the future holds in terms of COVID-19, but I can be fairly certain that many people, especially some of the older collectors, will not want to go to an in-person auction when they can safely bid from home in front of their computer. If in-person auctions do return, I would think that strict health and safety measures would need to be put in place, which means significantly cutting down the number of attendees and buyers. At that point, the auction houses may not see the cost benefit of having an in-person auction, especially after they have all laid off so many employees in the last few months. As long as the auction houses are able to source great, historically important works of art, I don’t think there is a need for collectors to attend in-person auctions, especially when private viewings of specific works can be arranged by appointment.

Julie Miyoshi

Art advisor and co-founder of Art Firm Advisor

What was your overall impression of the virtual “live” auctions?The virtual live auctions were a sigh of relief and a confirmation the art market audience has grown and developed way beyond the 2008–09 downturn. As the total wealth held in art is projected to grow by $900 billion to $2.6 trillion by 2026, there is no denying the market’s increasing stability. In times of crisis, art has historically proven to be a safe haven and the recent auctions have shown there is still a real global appetite for high-quality, fresh-to-market works backed by new confidence in new technology-based experiences. Collectors [and] investors remain incredibly bullish on long-term growth in the art market.
All three houses made the leap into the digital world by innovating during these unprecedented times, building new tech infrastructures that allowed for simultaneous bidding across several international locations, while providing the theatrical element that auctions are known for. It paid off, quite literally—results were strong and sell-through rates were high across the board.
What was a factor that significantly shaped how the auctions played out that less-seasoned observers may have missed?
It’s clear that the specialists focused on quality over quantity, and they listened to the market and what it wanted. The sales may have had fewer lots, but the artworks presented were of the highest caliber, objects that buyers would have an appetite for in any market. Of course, the financial deals, in particular guarantees (49.4 percent of total lots), which take place in both the days and weeks prior to the auctions, helped to ensure that lots were selling when they came up to the block.
The auctions were carefully curated so as to reveal buyers’ confidence and the market’s strength, especially at the top end of the market. Asia’s growing participation in the marketplace and the potential for growth of the younger generations of buyers via online platforms were notable.
Was there one particular lot or collection whose performance surprised you?
The lot that surprised many of us across the board was the $1.8 million achieved by the painting [from 2018, The Realm of Appearances], which was estimated at $60,000–$80,000—I believe this result was due to the usual market forces, how beloved the artist was, and his untimely death. Additionally, on the macro level, I see a market trend supporting the price. There is a current movement away from the dominance of the factory artists like , , and and toward a more spiritual, personal, connective zeitgeist as reflected by the cult-like popularity of artists like , , and . Matthew Wong is an artist perceived to be part of this grouping. is another example of a high performing market artist embodying spiritual themes.
How do you think this summer’s virtual sales will influence future auction seasons?
There is no doubt, art is best when seen and experienced in person. Live auctions provide electricity and energy that allow the auctioneer to tease out bids from attendees in the room. However, as fewer people travel post-COVID-19 and we get accustomed to new normals like Zoom, there will be further adoption of 3D and virtual tools. Digital methods and systems from industries such as gaming and defense may be leveraged to assist with engaging a larger, younger generation of new clients.
I also expect to see auction houses in different parts of the world implement more targeted marketing strategies due to varying severity levels of the COVID-19 pandemic across differing economies, governments, and cultures. The most important factor, though, will be a very mindful approach to the selection of content for the next big slate of auctions this fall.

Marc Straus

Collector; owner and founder, Marc Straus Gallery

What was your overall impression of the virtual “live” auctions?
The virtual auctions were done extremely well, especially by Sotheby’s, where it was easy to see, hear, and bid. An $84.5-million sale for an artwork is historic.
What was a factor that significantly shaped how the auctions played out that less-seasoned observers may have missed?
A collector should have a condition report done on expensive and older art. It’s far better to see work and examine it. I prefer to be in the room. I can judge whether the bid is a “chandelier bid,” meaning the auction house had no real bid. It’s legal until the reserve is reached. Why bid against the house? At Sotheby’s almost every expensive work was “guaranteed by a third party,” meaning it was going to sell. Thus the sale rate was destined to be high. The auction houses only accepted work in demand at the moment, also ensuring a high sale rate. Thus, while results were good, the auctions were very manicured.
How do you think this summer’s virtual sales will influence future auction seasons?
Increasing online bidding is here to stay and even if one can be present the majority of bidding will now be by phone or online. This results in a higher sale rate and likely higher prices.
Benjamin Sutton is Artsy’s Lead Editor, Art Market and News.