The rules that govern the art market have always demonstrated a very high degree of opacity. Despite the gradual development of a firmer legislative framework, the transparency of the art market is a complex struggle, slowed down by various factors. Effectively, the price, the process of buying as well as the history and the authenticity of a work of art are, even today, strongly constitutive of the doctrine of occultation that dominates the art trade. However, the transparency of the art market and the laws governing it tend to benefit not only a new generation of collectors, but also art dealers.
In this article, Artsper explains how a transparency policy can help your gallery boost its sales and broaden its spectrum of new buyers.
I. Behind the opacity of the art market
One of the principal characteristics of the art market is the silence surrounding the amounts of works sold. Whether they are auction houses, major art fairs or galleries, most people in sales have the habit of monetizing the works they show with a pronounced silence. Prices are agreed upon behind the scenes, in the most perfect opacity, to the detriment of buyers. Before trying to change this, it is important to know what is behind this very particular sales strategy to understand who benefits from it.
Keeping the prices down: a beneficial strategy for the art markets...
Firsty, from a purely competitive point of view, divulging the price of a work weakens the position of the selling organisation. By displaying its prices, a potential opposing merchant or buyer could choose to buy and sell the piece at a more competitive price. This fierce and highly financially driven desire to conceal the price of works sold on the art market is a way of softening the purchase and making it less tangible to the general public.
Additionally, not revealing the price of an artwork allows selling organisers to manipulate price fluctuation over time. The American press agency PR Newswire highlights a report on the World Art Market, presented in 2015 by Artprice. This report perfectly illustrates the dazzling evolution of the rise of contemporary artists such as Andy Warhol. Indeed the PR Newswire article rightly mentions the astronomical and almost illogical increase in value of the piece, Dollar Sign, which was up for sale for $7.7 million by Christie’s Auction House, a work that was sold for $160,000 in 1997 and sold for $150,000 in 1988.
Andy Warhol, Dollar Sign, 1981
And this also benefits the buyers!
If art dealers deliberately choose to keep the price of a work secret, collectors also benefit. Indeed, some prefer their image not to be overshadowed by the price, which is often considerable. What’s more, revealing the price of a work that makes up part of a prominent collector’s work can be risky.
Additionally, the absence of a price, which is often an exuberant amount, is the consequence of a certain elitism, which gives buyers a sense of distinction and social elevation. We often tend to stereotype these extremely wealthy collectors, who then feel that they belong to a powerful and decisive group in the art market. In an article on Artnet, Marc Glimcher, president of the gallery Pace, explains that as early as the 1960s, when modern art began to enter the art market, “The more exclusive or higher prices were, the more buyers there were”.
II. Towards transparency in the art market?
If the lack of transparency that governs the art trade seems to reinforce the major figures in this market, it is nevertheless that this approach has been undergoing an inevitable change for several years now. It seems this comes as a response to the various contemporary issues and new problems facing the art world. Notably with the arrival of new collectors, such as the millennials, whose commercial and behavioral practices are remarkably different from their predecessors, and who are fuelling the explosion of online art sales.
Millennial collectors changing the game
The transparency helps to inspire trust between buyer and seller. Exhibiting the prices in a gallery or at a fair allows the buyer to make sure that the work is within his budget. But it also means greater clarity in the terms and conditions surrounding the process of purchasing the work and the resulting services. The quest for transparency is almost omnipresent among millennial collectors. Super connected, this new branch of consumer in particular is more inclined than other generations of art collectors to discover and purchase works of art online. Therefore, they find new artists and discover works via the internet and social networks. If they are not afraid to look for information, they are also used to finding what they need quickly.
Amateurs or art enthusiasts, these new buyers are increasingly becoming major actors in the evolving art market. The price of a piece of art, whether it is high or reasonable, for them is a key piece of information that justifies its acquisition. Having to inquire about a work that interests them can quickly become an obstacle in the buying process. Discouraged, they then quickly lose interest in your works and turn to works with more readily available information.
Aware of the stakes of security and transparency but also of the oligarchy that governs the art market, this new generation demands implacable transparency in both physics and the internet. Indeed, the Hiscox report on the online art market released in 2018 notes that “While existing collectors are used to confidentiality and a lack of price transparency,” this trend is not shared by new art collectors. Indeed, for 90% of them “price transparency is an essential element and criterion when buying art online”.
Selling online: an unfailing lever
The rise of the internet, and in particular the sale of art online, is shaking up the sometimes outdated traditions of the art market. The presence of these multiple, highly competitive online platforms for selling art pushes buyers to engage in a frantic search for transparency of information. Indeed, on the internet, art buyers have direct access to the price of a work of art, so they can compare them on different sales sites. In order to fill you potential buyers with confidence, it is important that the online prices are the same as those in your gallery. But this is not enough, consumers who decide to buy art online, via your gallery’s website for example, expect more than just perfectly displayed prices.
To anticipate the questions and concerns from collectors, but above all to support their buying decision, you need to reassure them. Your main objective is that they are properly informed about the work they are interested in. Both purely visual aspects (the technique used, size, support of the work, framing), as well as the certification of the work (print, authentication, signature of the artist). The delivery, payment security and the guarantee of the work are equally crucial points to reassure your customers about their purchases.
It is therefore necessary that your gallery has clear answers available to your customers during their research and discovery of a work. To convince your online buyers, you need to be transparent and accurate by mentioning all the details about the artwork. You can also give more personal information about each of your artists (writing short biographies or highlighting their exhibitions for example). All these details allow collectors to make an informed decision and to feel more confident in making their purchase.
The art market is evolving quickly, and its participants. By taking into consideration the importance of being transparent, you cultivate and attract new buyers, who today, have a flexible purchasing potential. To install confidence in the buyers, you need to adapt to their commercial practises and behaviors. If, in the past, the concealment of prices has been synonymous with quality, this outdated practise does not meet the new codes for buying art online. Therefore, transparency presents a win-win agreement: it is a pledge of confidence for the buyer as well as a lever for the art dealer.