The online art market grew in 2016 against a backdrop of a sleepy market, according to a new report from Hiscox, the specialty insurer.
The fifth annual report, entitled “A market yet to awaken?,” documents strong annual growth in online sales, but slowing momentum in converting customers to buying art online. The report, released Tuesday, forecasts “long-awaited consolidation” in the sector, which today is fragmented across several main players.
Sales in the online art market rose 15% to $3.75 billion in 2016, taking the online share of the overall art market to 8.4%, up one percentage point from 2015, according to the TEFAF Art Market Report 2017. A separate estimate, from Art Basel and UBS’s The Art Market | 2017, put online sales of art and antiques at $4.9 billion, up 4% from the prior year.
Hiscox’s report includes survey responses from 758 art buyers, up from 672 respondents in 2016, as well as 132 galleries and dealers, a slight increase from last year’s number. This year’s edition also includes a new component, 42 interviews with managers and “key staff” at various online art platforms who provided information to Hiscox.
The sales growth of the past year came largely from increased online sales at traditional auction houses, and more frequent purchases by existing online art buyers.
Christie’s saw online-only auction sales jump by 84% over the year, to $217 million. Sotheby’s online sales grew by 19%. As a share of overall auction sales, online sales at Christie’s more than doubled between 2015 and 2016, but still account for just 1.5% of auction turnover, implying substantial room to grow. Heritage Auctions, which deals largely in collectibles, reported it conducted 41% of its auction sales online in 2016. Online sales at Heritage totaled $348.5 million in 2016, up 1.3% from the prior year.
Existing online art consumers were more likely to be repeat customers. The share of art buyers who purchased more than one artwork online in the prior 12 months rose two percentage points to 65% in 2017. Online purchases were also increasingly likely to be at the low end, the survey found, with 79% spending less than $5,000 per purchase, up slightly from 78% in 2016 and 67% in 2015.
The biggest concerns of online art buyers were the condition of the work, whether it would appear different in real life than on-screen, and authenticity. The report found upwards of 75% of buyers still hesitated to purchase art online because of concerns about the condition of the work or that it would look different than it appeared on-screen, figures that haven't improved much since 2015. But those figures were lower for buyers under 35, suggesting that an emerging collector base could support the online market going forward.