5 Tips for the Online Art Collector
In 2019, collectors around the globe purchased 91% of their artwork at brick and mortar galleries and auction houses and 9% online.1 Oh what a difference a year makes! In 2020, a radical shift has taken place as our arts engagement has moved primarily to the virtual sphere. Online sales have taken off as art and other luxury goods are viewed and purchased increasingly on laptops, tablets and cellphones.
While the increase in online sales for all galleries and auction houses is a direct effect of the coronavirus pandemic, the transition to virtual sales is changing the art market in ways that will likely have long lasting impacts. Sotheby’s online sale of 24 Banksy prints this past March brought in a modest $1.4 million. Yet a newsworthy aspect of the auction was that 47 percent of the buyers were new to the auction house and 30 percent of bidders were under 40 years old.2
Modest prices attract a wider audience of collectors, and digital engagement draws a younger generation more comfortable with buying online—making it easy to see how the move online can change an auction house’s audience. But what about sellers who were already online-based?
Many are seeing a boost as consumer behavior shifts. Dallas-based auction house Heritage Auctions has been selling art and collectibles through online and live auctions since 1999. Their revenue was up 10% through May 2020 compared to the same time last year, in large part due to their established online sales infrastructure and popular collecting categories such as coins, prints, photographs, and sports memorabilia.3 Contrast this to the 50% drop in revenue of the big three auction houses—Sotheby’s, Christie’s and Phillips—in the first half of the year.4 These larger global auction houses specialize in multi-million dollar sales—a harder sell in the virtual world —whereas the niche-online art sales sites offered by vendors such as Heritage, Artnet and Artsy are built to be optimized for an online environment; offering more frequent sales at more affordable price points.
Digital Dos and Don’ts
With physical distancing measures still in place, cautious buyers contemplate art on JPEGS, videos and Zoom calls for purchase. Advanced technology, high-resolution images and the potential to engage with the seller through a variety of channels makes the online art acquisition experience more engaging and palatable.
Any purchase of art, whether online or in-person, requires good due diligence. Online art-buying in particular, however, has some additional best practices to pay attention to:
1. Choose a reputable source:
Many established for-profit and non-profit art venues have hosted virtual sales, events, and lectures during the coronavirus pandemic. The benefit of buying from established art dealers, galleries and auctions houses is that they vet the authenticity of the work and can furnish provenance and condition reports, contributing to the buyer’s confidence to acquire.
Collectors are also selling art directly—via social media channels like Facebook and Instagram. While direct sales such as these don’t offer the same level of certainty as buying from an established seller, some collectors enjoy the access and convenience of going directly to the source. If you do buy directly, be certain to ask about provenance, title, and condition and keep records of all of your correspondence.
2. Confirm the condition:
This is the art world’s equivalent to real estate’s mantra of location, location, location. Whether for a new work of art or a secondary market piece, condition is a key driver of value. Whether your painting is a traditional oil on canvas, or the sculpture is made of wood and feathers, how a piece of art has aged is contingent on many factors, including how the prior owner has cared for the work. Look for sites that depict the back of the painting or drawing as well as the front and offer a zoom function to hone in on details, so one can view the condition of the work. For sculptures, online art buyer should also look for sites that offer a three dimensional view.
Other collectibles—such as prints, baseball cards and coins—have established quality grades. A print with a condition of 6/10 will be poorer than one that is graded a 10/10. Make sure you know what you are looking for, and if the condition isn’t mentioned on the online description, request a condition report.
3. Visualize the art in your home:
New technology is giving collectors a better picture of how an art object seen online may fit into their rooms. Some online venues, such as firstdibs.com, place an image of the art object onto an image of various rooms in a home, so the viewer has a sense of the scale in relation to furniture and space. Other galleries are using augmented reality (AR) and virtual reality (VR) technology to help collectors better visualize living with the artwork.5 Even for those who are creatively minded, the power of AI is proving to be a much-needed complement to the power of imagination for those of us limited to collecting online.
4. Follow the money:
Along with the uptick in the number of buyers looking to purchase online comes another, unfortunate, increase in the number of criminals seeking to steal personal data. Art purchases in particular are targets for online thieves due to the high sums being transferred. Before sharing personal data online to pay for your artwork, ask about the cyber encryption and data protection procedures the vendor has in place. Established online arts portals and auction houses likely have protections that they will be happy to share. Peer to Peer (P2P) payment methods tend to have higher exposure to cyber fraud and identify theft, so exercise caution.6 Before wiring or sending any money, be sure to verify the transaction routing and account numbers with a person by phone to verify the data is correct and hasn’t been corrupted via email exchanges.7 And, ask your insurance broker about possible insurance coverages for cyber and identify theft, which can cover these exposures.
5. Insure your collection:
Congratulations! You’ve purchased a piece of art…now what? Once it is securely paid for, you need to make arrangements to have it packed and shipped from the seller to your home. Make sure to verify who is responsible for the insurance during transit from “There” to “Here.”
Of course, once the artwork is installed at home, an insurance policy should provide coverage for breakage and damage from fire, theft and flood as well as catastrophic coverages. (At Berkley One, our Collectible SuiteTM policy provides all of these protections—plus additional coverages for the modern exposures faced by today’s art enthusiasts, such as enhanced protection for commissioned works of art, objects undergoing conservation and trusts and estates.)
Whether you are perusing for Street Art or Impressionist paintings online, we hope this practical guidance helps you enjoy the vibrant and abundant art objects available to collect in today’s digital realm.
Katja Zigerlig is Vice President, Art, Wine + Collectibles Advisory at Berkley One (a Berkley Company).
To learn more about Berkley One’s collectibles coverage, visit us here.