The COVID-19 pandemic created the biggest recession in the art market since the 2009 global financial crisis. The art trade was particularly affected by relying on non-essential purchasing, events, and travels – all of which was hindered by the lockdowns worldwide. A new report from Art Basel and UBS Global Art Market Report, The Art Market 2021, presents the results of an analysis of the effects the global pandemic had on various sectors of the market in 2020. The report revealed some of the ways in which the market was shaped by this transformative time and reviewed some of the biggest trends that will continue to shape the market in 2021 and beyond.
With almost no surprise, sales in both the United States (U.S.) and global art markets dropped significantly. Sales in the U.S. art market fell by 24% in 2020 to $21.3 billion. Global sales of art and antiques reached an estimated $50.1 billion, down 22% from 2019 and 27% since 2018. That being said, the pandemic also unveiled the potential of online sales. Despite the decrease in sales overall, aggregate online sales of art and antiques reached a record high of $12.4 billion, doubling in value from 2019. The share accounted for by online sales also expanded from 9% of total sales by value in 2019 to 25% in 2020. This is the first time the share of e-commerce in the art market has exceeded that of general retail.
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Although many businesses maintained a significant number of transactions online, as a whole, the volume of sales is estimated to have decreased by 23% to 31.4 million – its lowest level since 2009. The share of art fair sales from live events declined dramatically in 2020, accounting for only 13% of dealers’ total sales. Of 365 global art fairs that were planned for 2020, the vast majority (61%) were canceled, while 37% held live events, and the other 2% of fairs held a hybrid, alternative event.
The report showed how 2020 was also a period of restructuring and innovation, bringing with it what many believe will be some lasting changes to the art market. Many dealers and auction houses diverted more resources to technology and brainstormed strategies to attract audiences and offer quality amid an increasing volume of online offerings. To adjust to a changing market, dealers’ top priorities shifted dramatically to focus on existing clients, online sales, and finding ways to cut costs. The ability to reduce some of the major operating costs actually allowed some dealers to maintain profitability in 2020, with 28% of dealers becoming more profitable than in 2019 Looking at 2021, dealers plan to make client relationships, online sales, and art fairs their priorities.
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Looking ahead, about 48% of high net worth collectors surveyed said they would be willing to go to an art fair in the first six months of 2021. The majority of collectors (68%) reported that they would be happy to attend any fair by the end of the third quarter of 2021, and over 80% into the fourth quarter, indicating the continuing importance of online presence in the upcoming year. Although the timeline for future art fairs is still subject to many uncertainties, most fairs hope to hold a live event in 2021. That being said, online sales won’t go away that easily. When asked about the future of online sales, the verdict was almost unanimous: 94% of auction houses surveyed said they expect online sales to increase over the next five years.