Born between the beginning of the 80s and the end of the 90s, today millennials are between the ages of 21 and 40. Driven by new technology, they adopt business and behavioral practises that are very different from previous generations. These young, dynamic, methodical and independent people also demonstrate a strong ecological, social and emotional conscience. They make up a pivotal generation of pioneering and innovative consumers in the art market, who are vital to understand in order to better adapt your selling strategies.
Who are they? How do they work? In this article Artsper analyses a new generation of buyers who are often regarded as somewhat of a mystery. Learn to identify their tendencies so you can respond to their needs with the necessary tools.
I. Who are these new collectors?
A rapidly increasing consumer segment
The stance of millennials in the global art market is gradually becoming prominent. Without replacing or getting ahead of older generations or buyers, collectors between the ages of 20 and 40, have a buying potential that is important to understand. In a report on the art market published in 2019, Art Basel highlighted the growing curiosity and presence of these buyers at the various art fairs. The report noted the emergence of a new type of buyer, which was slowly coming into its own, notably within the asian markets since 2018. The “Generation Y” collectors appear to be much more active than other art buyers, with 69% of them having bought works of art between 2016 and 2018.
If the majority of collectors are baby boomers, it will not be long before they “transfer their wealth, and their collections, to their children” who are none other than millenials, explains Heather Flow, an art consultant in an Artnet article. The results? One of the largest transfers of wealth in the history of art, with an amount that could be as much as 68 trillion dollars. Effectively, according to a report by UBS Investor watch in 2017, about 87% of today’s established art collectors are likely to pass on their private collections to their heirs: the young millenials.
Is there a specific budget?
In a new study done by Art Basel and UBS titled The Impact of COVID-19 on The Gallery Sector, Dr. Clare McAndrew, the founder of Economic Arts presents the results of a survey of 390 wealthy collectors and 795 modern modern and contemporary art galleries. Among the collectors surveyed in the United States, the United Kingdom and Hong Kong, the study reveals that despite the pandemic, millennials are emerging as the major spenders. For example, 14% of them have already spent more than one-million dollars (contrasted to just 5% of baby-boomers)!
This leads us to more questions: how can we explain the significant purchasing power of this consumer segment? Is their purchasing power variable?
Millennials are relatively confident when it comes to investing in art, they do not assess the value of a work based on its price or its rating. Instead these young collectors are mainly motivated by the emotion that is evoked within them by a work of art or by the pleasure of acquiring it. Their collection generally reflects their personality. In addition to this, many collectors start by buying cheaper works of art, often worth $5,000 or less. They then gradually expand their collection and average price of purchase over time.
In addition to the emotional stimulus that drives the purchasing decision, millennials are also well aware of the potential value of art. Thus, they are more likely than other generations to consider art as a financial asset. According to the Trust Insights on Wealth and Worth 2018 US report, for 33% of millennial collectors, art is a legitimate asset used to create wealth. Becoming a return on investment, the purchase of art is therefore, for a third of them, part of a strategy to build personal assets.
Social claims and identity
An investment driven by love or financial concerns? Another factor interests and persuades these buyers: the social security of the work. In fact, before they decide to trust any brand, these young buyers find out about the various social values that guide the sales organization. Moreover, their purchasing decisions do not align with any conventional loyalty system. Due to this, millennials can approach any art dealer without feeling disloyal.
In addition to the importance of the values expressed by the seller, the significance of the work itself, as well as the artist’s background are two other factors that enable and support the buying process. Millennials generally seek to discover and support socially and politically aware artists who champion values that resonate with them or simply reflect them, both through their art and their daily actions.
This explains their interest in works by emerging artists who are from diverse and varied backgrounds. A study led by the Pew Research Centre says that millennials are the most racially diverse generation in US history. They therefore take the risk of investing in emerging artists of their generation, whom they often consider to be more daring than their elders, while remaining concerned about the quality of the works they acquire. They are not scared to take risks or even to find new talent themselves on social networks! Taking on young artists with diverse socio-cultural roots would therefore be a way to boost your gallery’s sales to this demographic… Moreover, consider highlighting the backgrounds and values of your artists, as well as your own commitments as a gallery. These features, assuming they are genuine, will appeal more to this younger generation than any big name.
II. Tech-savvy collectors
Born into the digital age
Super-connected, art loving millennials are more inclined than other generations to discover and buy works of art online. They keep themselves informed and participate in the dynamic art market via the internet and social networks, notably by spending a lot of time on Instagram. This social network has become a virtual storefront, allowing everyone to discover artists, follow them and stay informed in what they are up to. Indeed, the Hiscox report on the online art trade in 2018 proves that Instagram is becoming the main social channel for art. Similarly, a survey of American collectors reveals that 44% of young millennials and 34% of older millennials discover new works of art and new artists via platforms such as Instagram and Pinterest.
More and more museum institutions, galleries and auction houses are expanding their online sales tools. This is no coincidence! Millennials are a lot more inclined to buy online than their predecessors. According to the UBS report on the art market in 2019, 93% of wealthy millennial collectors said they had bought art or items from an online platform like Artsper, in contrast to the majority of baby boomers who had never bought art online before.
Among young collectors, the decision to buy or to find the courage to buy one’s first work is often supported by online sales platforms. Very comfortable with the virtual world, they are much more likely to browse online than to enter a gallery. Therefore, they easily bid on auction sites via their computers or smartphones.
A balance between online and offline
Millennials are indeed very active on social media and therefore buy more easily and regularly online. But it is important to keep in mind that the physical act of buying a piece of art in person will always play an important role in the global art market. Millennials actively participate in big artistic gatherings such as fairs, openings and exhibitions. They discover life-size works and are able to meet and discuss with gallery owners and artists in person.
Note that millennials are looking for a more personal approach to art! They are not afraid to network, both online and offline. In an Artnet News article, Kenneth Schlenker from the online platform ArtList explains that older collectors tend to get their information from the contemporary art press, their advisors or by working closely with galleries. Conversely, millennials seek to directly enter into a relationship with the artist via social networks or through physical encounters. They communicate more easily and establish ties with their intended targets without the need of any middlemen. Millennial collectors are proactive in seeking access to artworks, sometimes gaining access “before they are exhibited in a gallery”.
Art Paris Art Fair 2020: the first art fair post-confinement to be held in the world.
The purchasing power of this generation of mature buyers is increasing rapidly. Adopt outstanding digital communication, to adapt yourself and attract these young and super-connected art collectors! But do not forget that millennials will always require the expertise of specialists like you, especially if this allows them to discover young talents who are perfectly in tune with their values. Curious and proactive, they enjoy walking through galleries and attending the most important events on the contemporary art scene. Human relationships remain an important component in their purchasing process, so also focus on the development of human contact with these precious customers.