Yesterday, Art Basel and the Swiss bank UBS published Dr. Clare McAndrew’s Resilience in the Dealer Sector: Mid-Year Review 2021. The art market scholar, cultural economist and founder of Arts Economics in 2005 presented her survey of the global art dealer sector in the first half of 2021 amid the lingering challenges of the COVID-19 pandemic, in focusing on employment structures and sales. The analysis is based on responses from over 700 dealers operating in the art and antiques markets in 54 regions or countries. The report also presents the results of a survey of wealthy collectors (HNW) in five major art markets – the United States, the United Kingdom, Hong Kong SAR (China), Germany and the United Kingdom. Switzerland – conducted by Arts Economics and UBS Investor Watch. .
In 2020, the effects of the pandemic on employment were a major concern for galleries and other players in the art market. However, this year, promising signs show that some of the job losses experienced in 2020 have been recovered in 2021, with the average number of people employed in the sector returning to 2019 levels after a decline in 2020. 23% of companies have reduced their staff. in 2020. However, in the first half of 2021, the share of hiring dealers (25%) exceeded that of licensees (13%). In 2021, 52% of dealerships reported having some employees working remotely, 27% doing so occasionally and 25% more regularly. 54% of those companies with remote working had introduced it in response to the COVID-19 pandemic. In 2021, the sector continued to support knowledge-based and gender-based jobs. In the primary market, 52% had a female founder, and women made up the majority of employees at associate level (61%) and 76% of sales and sales managers.
51% of merchants reported an increase in gallery sales in the first half of 2021 compared to the same period in 2020, compared to 45% reporting a decrease and the remaining 4% at a stable level. Sales for the entire sector increased by 10%. All segments of the market over $ 1 million saw their sales improve, with dealerships with sales over $ 10 million recording the highest average change in sales (21%). Dealers with sales below $ 250,000 saw their sales fall slightly below the first half of 2020, and mid-size dealers in the revenue segment from $ 500,000 to $ 1 million saw their values decrease by 3% on average. Asian dealers reported the biggest improvement in sales in the first half of 2021 – with an 18% 12-month average increase (is the pandemic the turn of the Asian century?) On average.
The switch to online sales was by no means temporary; The share of online sales for merchants at all levels remained more than double the 2019 level and this channel accounted for 33% of all sales (or 37%, including the Online Viewing Rooms art fair). While still in the minority in the first half of 2021, online sales to new buyers grew, accounting for 38% of all online sales by value. An additional 25% were from existing customers purchasing online for the first time from resellers in 2021. While they are potentially indicative of the success of digital strategies to expand the buyer base, the numbers demonstrate the difficulties in retaining customers in line.
While digital, film and video art remained a relatively lower proportion (16%) of HNWI’s collections, 48% of HNW collectors reported an interest in purchasing digital art over the past 12 years. next months. Digital art accounted for 12% of aggregate median collector spend in 2021, with the highest spending for millennials averaging $ 20,000 in the first half of 2021. However, the dealer survey showed that sales of digital art accounted for less than 0.5% of value. primary market sales in 2021, indicating that a significant portion of NFT’s digital art sales activity occurred outside of the traditional gallery setting.
Regarding global wealth and art buyers, despite the crisis, median spending by HNW collectors increased by 10% year on year in 2020, and the first half of 2021 saw a further increase of 42% on average (at $ 242,000, higher than 2019 or 2020 in just six months), illustrating the impact of HNW collectors on the market recovery. The lead was led by Millennial collectors, who had the highest overall spend ($ 378,000) – more than three times the level of their older peers. In the first half of 2021, spending for female HNW collectors increased by just over a third to $ 410,000, more than double the level of their male counterparts, whose spending only increased 9%. . Dealers and galleries were the most used buying channel, with 82% of collectors buying through a dealer in the first half of 2021. When presented with the choice of buying works through a dealer or gallery by Compared to an online market, 80% of collectors preferred dealers. Despite lingering concerns and setbacks, HNW collectors planned to attend a total of 40 events in 2021 – just one less than the average reported in 2019. Among all collectors, online platforms were used by more a third of the sample and 32% had purchased directly through Instagram.
The role of merchants in the careers of artists remains important. Wondeur AI’s exhibition data on the careers of a sample of 2,700 leading artists whose exhibition journeys began after 1985 illustrated the importance of commercial galleries throughout artists’ careers. For emerging artists, commercial galleries accounted for an equal share of the number of exhibitions as non-profit centers (36%). As the careers of artists developed, museums played a more important role; however, even at the star stage, when artists reached top 2% status, galleries accounted for 26% of all exhibitions. The analysis also showed that while the gallery sector is very heavy in terms of sales, focusing on exhibitions and supporting artists’ careers reveals a very distributed system: in the emerging phase of their careers there were 4 060 commercial galleries and 84 art fairs presenting the works of artists; these for-profit institutions accounted for almost half of those involved in organizing artists’ exhibitions, with museums accounting for 20%.
Regarding the outlook for the art market, 91% of dealers believed their sales would increase or remain stable over the next 12 months, with 9% predicting a decline. 37% of dealers predicted higher net profitability in 2021 compared to 2020, with an additional third predicting that their profits would be stable. The majority of dealers (78%) predicted that their number of jobs would remain stable, with 4% believing they would reduce their workforce further and 18% considering hiring more employees. 64% predicted that their online sales would continue to increase over the next 12 months, with just 5% predicting a decline through this channel. 66% predicted an increase in art fair sales, with 13% predicting a drop. 69% of dealers said maintaining relationships with existing collectors was their top priority in 2021, followed by online sales and exhibitions (50%) and attending art fairs (41%).
Clare McAndrew, Founder of Arts Economics, said: “Although art sales have been relatively resilient during the crisis, some of the dealer sector’s biggest fears have focused on employment. This research has revealed promising signs that some job losses have been recovered in 2021, as well as indications of transformations within the industry that will continue to affect working practices in the future. As some aspects of the job evolve, a constant in the sector is the predominance of highly skilled and gender balanced jobs. The study showed that in addition to the quality of the work and the artists they offered, dealers are especially valued by collectors for their knowledge and expertise, as well as for the long-term focus and confidence that characterize their relationships. As more and more works of art are sold online and outside the traditional framework of galleries, their essential role in establishing and managing artists ‘careers has also been highlighted.’
Christl Novakovic, CEO of UBS Europe SE and Head Wealth Management Europe and Chairman of the UBS Art Council said, inter alia: “The fallout from the pandemic offers us a unique opportunity to take a fresh look at the markets, l evolution of the role of gallery owners and dealers. and help rebuild them in a more sustainable way. Our results demonstrate that digital acceleration continues at a steady pace, bringing with it changes and challenges to traditional market structures, as well as new business opportunities. ‘
Don’t miss Art Basel 2021 from September 20 to 26 (public days only from September 24 to 26) with a selection of the biggest galleries from around the world.
The photo shows a general impression of Art Basel 2019. Photo copyright © Art Basel.
Short version of Art Basel, UBS and Dr. Clare McAndrew report added with minor edits on September 10, 2021 at 5:45 p.m. Swiss time.