Q&A with Anders Petterson, Founder of ArtTactic
Following the release of the 2017 Hiscox Online Art Trade Report, we talked with ArtTactic Founder & Managing Director Anders Petterson about the latest art buying trends and what galleries can do to succeed online.
Gallery Insights: “Collecting” has many definitions throughout the art world, yet is rarely defined as a formal practice. How does ArtTactic define “collecting”?
Anders Peterson: For us, the term ‘collecting’ defines the journey of an art buyer. We think of collecting as consisting of two sets of activities: 1) Transactions: Acquiring/ selling art or collectible objects; and 2) Ownership/Stewardship: Activities related to preserving/promoting/ enhancing (cultural, historic, and economic) value of the collection.
From an art market analysis perspective, our main concern is the different motivations driving individuals to buy art in the first place and how this might change depending on factors like the maturity of the art market and the cultural context.
At ArtTactic, we like to think of these motivations as a spectrum between two extremes—pure passion and pure investment.
These two extreme breeds of collectors are rare—most collectors inhabit the space in between, constantly changing the priorities that emotion, passion, and social and financial returns play in their pursuit of collecting art. A collector survey done for the Deloitte Art & Finance report in 2016 showed that 71% were primarily motivated by emotional returns, 61% by social returns (being part of a social scene, network of likeminded people), and 64% by financial considerations (investment returns).
GI: Given the continued growth of the online art market and increasing preference of collectors to buy online year-round, it seems as if the art world off-season may quickly become a thing of the past. Would you agree? Why or why not?
AP: Yes, I believe the notion of off-seasons is gradually disappearing, partly due the growth of the online art market. However, this trend has been going on for the last 15 years, well before the online art market started to gain traction.
The advent of a rapidly expanding brick-and-mortar art market infrastructure, such as art fairs, biennials, galleries, and auctions means that the global art world calendar is packed with daily events, and has already moved the market away from seasons towards a continuous market place. The online art market is making it easier to access these events and art in general. By bringing geographically dispersed events (auctions, art fairs, exhibitions) together, it allows collectors to engage and interact with them without being physically present.
GI: How will consolidation in the online art market impact gallery owners and the way they do business?
AP: Increasing industry consolidation in the online art space is likely to also increase the market power of the winning platform(s). On the positive side, this could boost the galleries’ online presence and sales. On the other hand, it could also shift and potentially disrupt the traditional relationship between client and gallery, where the platform becomes the owner of the client relationship and the gallery becomes a mere supplier of artworks—probably a scenario that many gallery owners would initially find difficult to adapt to.
However, as with the luxury goods industry, it is possible to differentiate between different segments of the market without diluting the brand value of the gallery and its artists. It’s fully compatible to have certain types of works (i.e. limited-edition works) by an artist sold online (without any direct interaction with the end client), but at the same time maintain a close and bespoke relationship with clients buying the artist’s unique works through traditional channels. The online channel could act as an effective educational experience (see below) and encourage the collector to move up the value chain.
This is not about your gallery turning into an e-commerce company—think about it as part of your marketing strategy, and sales will follow (both offline and online).
GI: Another finding from this year’s report suggests that when making a purchase decision, collectors attribute “significant value to the educational experience.” How should this guide a gallery’s content strategy and choice of online platform?
AP: The online art market is not simply moving existing collectors from a physical environment to an online environment—the real opportunity lies in converting and expanding the population of new collectors. With online art buyers removed from the physical object and its traditional context of a gallery or art fair, the need for relevant content is becoming increasingly important in generating awareness and interest, as well as building trust and brand recognition.
Creating blogs, using social media, sending out newsletters, and making podcasts and videos will encourage existing and potential buyers to return for advice, tips, news, and trends as well as purchases. Simply having a website isn’t enough in today’s crowded online market. Collectors want to follow artists, and they are looking for interesting narratives and stories that can help them give context to the digital images they see online.
GI: Online art sales in 2016 vastly exceeded gallery expectations. What resources or practices would you recommend for gallerists to stay up-to-date on art market movements?
AP: The exciting thing about the art market right now is that we are seeing more and more art market-related research produced compared to five years ago. In the online space, we have the Hiscox Online Art Trade Report and Barnebys Online Auction report, as well as TEFAF and Art Basel both covering this market as part of their overall report.
We have more data (auction prices, exhibition data, sentiment data, forecasts, and social media data) that can help galleries form a better view of the market than ever before. We also believe that the growth of the online art market will increasingly create more transparency and ultimately open up the possibility of a more research and data-led approach to pricing and demand analysis.
GI: As reported by ArtTactic, collectors are decreasingly motivated by ‘value potential’ when buying art and increasingly motivated by ‘identity and status.’ Among Generation Y collectors (20-35 years), in particular, you’ve observed a 33% increase in the importance of ‘identity and status’ since 2015. What do you make of this shift?
AP: Value potential is still important, i.e. there are still a higher percentage (56%) of Generation Y collectors driven by this motivation than “identity and status” (52%). But you are right, based on this year’s survey results, there seems to be a gentle shift in emphasis or in motivations.
One of the reasons for this could be that buyers are adjusting their expectations as they are getting more involved in and educated about the art market. I guess there is a realization that the investment return of art is unpredictable, particularly for the less established part of the art market. But at the same time, art is increasingly becoming a lifestyle choice and part of membership in a vibrant social scene.
GI: What art-buying trends are you most excited to see play out over the next year?
AP: I think many feared that the online art market would create a homogenous pool of art works that visually looked good online. However, I think in many ways it’s the opposite—looking at the growth of online platforms such as 1stdibs and Artsy and auction houses such as Heritage, we can see the diversity of collecting segments. And I believe the true potential of the online art market going forward is that it will increasingly provide education and accessibility to highly specialized collecting areas, ultimately leading to a broader marketplace with more cross-collecting.
GI: For gallerists who are reticent to engage with the online art market, what advice would you offer?
AP: First of all, it’s not an either/or. The traditional art market will continue to exist, and even if the online art market doubled in size, more than 80% of the transactions would still take place through traditional and existing channels. But see it as an opportunity to find and engage with a new generation of collectors who are spending a large portion of their free time online. This is not about your gallery turning into an e-commerce company—think about it as part of your marketing strategy, and sales will follow (both offline and online).
Anders Petterson is a leading authority on the art market, with particular focus on the modern and contemporary emerging art markets. He is the Founder and Managing Director of ArtTactic Ltd, a London-based art market research and advisory company set up in 2001. He is lecturing on the topic of ‘Art as an asset class’ for Sotheby’s Institute in London. Anders Petterson is a Board Member of Professional Advisors to the International Art Market (PAIAM).