How the World’s Biggest Auction Houses Are Adapting to the Digital Market
As we all become increasingly inseparable from our screens, it’s no surprise that auction houses are devoting more energy and resources than ever to capturing audiences—and bids—online. Art collectors of all stripes (and generations) are browsing online catalogs, registering to bid online, and placing bids via apps and websites—and not just on middle-market items. So catering to a clientele that would rather scroll and tap than pick up a phone or raise a paddle is now a core component of any forward-thinking auction house’s business strategy.
With the U.S. Department of Commerce reporting e-commerce sales at $83.9 billion in the second quarter of 2015—up around 14% from the same period last year—it’s not just seasoned buyers who the houses are trying to reach; it’s all of the potential collectors out there who might not consider purchasing an artwork if they couldn’t do it from their laptop or iPad. According to 2014’s annual TEFAF Art Market Report, online art sales reached roughly $3.3 billion last year, a year-over-year 32% increase from 2013. Artsy checked in with the Big Three brick-and-mortar auction houses—Phillips, Sotheby’s, and Christie’s—to see where their ever-evolving digital strategies are taking them.
Phillips has seriously stepped up its game over the past year or so, investing in its own digital infrastructure rather than farming out its e-commerce initiatives to firms like Live Auctioneers. This fall, the firm officially launched its digital saleroom, where bidders can live-stream brick-and-mortar sales and bid in real-time through the auction house’s own website. This past fall, the house also introduced its mobile component, an iOS app that bidders can use via iPhones and iPads for all aspects of the process. “We’ve seen a nice uptick in registrations for sales since launching the app,” says Megan Newcome, Director of Digital Strategy at Phillips. “This season, we’ve seen almost $9 million in total sales through our digital saleroom platform—that’s combined for online and mobile sales,” she says. “The number of clients who registered to bid online increased 120% over the same period last year. 41% of online participants were new to Phillips.”
A deal with eBay, announced in September, is also aimed at helping in that department. So far Phillips has held six sales (contemporary art, photography) via eBay, but hopes to eventually put sales across the categories of Fine Art, Editions, Design, and Watches and Jewelry on the online auction giant’s site. (It’s worth noting that eBay is not yet equipped to handle the bureaucratic details of live auctions outside of the U.S. yet.) While Phillips hasn’t launched timed, online-only auctions yet, “they are definitely part of our roadmap,” says Newcome, who stresses that they don’t plan to limit objects offered on eBay or in future online-only sales to lower-value or middle-market items. “That stigma that online-only is for lower value, more approachable property is very much changing,” she says.
Recent online bid
In Phillips’s Contemporary Evening Sale in London this fall, one of Richard Prince’s Instagram inkjet paintings, Untitled (portrait) (2014), sold for £98,500 (around $150,000) to a collector bidding via Phillip’s website. A sale this past month in the Hong Kong Watches auction brought $2.4 million in online sales.
While Sotheby’s hasn’t been as quick as its competitors to roll out online-only auctions or mobile bidding apps, the house has been eagerly exploring different routes to reach new bidders. Earlier this month it became the first major auction house to have an app on the new Apple TV, with five channels devoted to everything from artists to luxury goods to live-streamed sales. Meanwhile, the auction house’s collaboration with eBay launched in April with a Sotheby’s channel on eBay’s Collectibles & Art section, conceived as a platform for live-streaming real-time auctions happening in the saleroom, specifically those offering property at the $1,000 to $25,000 price point—one that might appeal more to eBay’s audience.
Sotheby’s isn’t revealing any data yet regarding sales via that platform, but one of the inaugural collaborative sales last spring, “Photographs,” on April 1, brought in $5.17 million for 188 lots (versus around $4 million for 186 in its “April Photographs” sale in 2014), and several meaty sales came through eBay. Since early December last year, Sotheby’s has seen a 65% increase in online bidders, a 41% increase in online buyers, and a 47% increase in lots sold online. Two online-only sales (held in real-time but with no brick-and-mortar component—something relatively new for Sotheby’s) this past fall both sold 99% by value or more.
As for timed, rather than live, online-only auctions, the house teamed up with Artsy for its first foray into that field. Organized by Sotheby’s and hosted on Artsy from October 22 through October 30, the sale, titled “Input/Output,” featured a selection of contemporary works that showcase digital culture and technologies, from Instagram to 3D modeling. Artists ranging from Robert Longo and Christopher Wool to Cai Guo-Qiang and Wade Guyton were specifically targeted for consignment, in part with the help of Artsy’s data-driven insights on collecting patterns, from price points to types of work.
Priciest online bid:
A platinum and diamond ring from the “April Magnificent Jewels” sale in New York fetched $3.25 million from a collector bidding via the Sotheby’s website.
Christie’s has had a much more robust approach to creating a digital marketplace than either of the two other major houses. They started hosting online-only auctions of property not offered in the brick-and-mortar saleroom in 2011, and launched their mobile app in 2009. Last year, the house announced that they were pouring around $20 million into further developing their digital services and infrastructure.
Their timed online-only sales—of everything from watches and Warhols to a Richard Serra drawing for $905,000—are moving full steam ahead, with 80 online-only auctions on track for 2015 (up from 78 last year). “Online is a growing driver of client activity,” says Christie’s spokesperson Jennifer Ferguson. In the first half of 2015, she points out, 36% of all traffic to the e-commerce channels came from mobile devices. The main target, it seems, are new buyers, and Christie’s has been luring them in through a variety of entry points, including Christie’s online stores for watches and handbags (launched in 2014).
In the first half of 2015, 74% of visitors to the e-commerce channels were new to Christies.com, while 16% of all new buyers overall came through the digital doorway. One of the crucial questions is how to keep those clients, and whether or not they will transition to higher-value sales. One approach to retaining clients might be Collectrium, a cloud-based digital collection-management system, which Christie’s reportedly acquired for $16 million this past February. The idea is that Christie’s clients will have better tools to archive and analyze their holdings.
Record for an online-only sale
Pamuk (2009), by Richard Serra, sold for $905,000 in the May 2014 “Post-War & Contemporary” sale via the Christie’s website.
Cover image: Richard Prince, Untitled (portrait), 2014. Price realized: £98,500. Photo courtesy of Phillips.