Galleries, fairs and auctions in the face of Covid-19

The online art market continues to grow and is emerging as the most immediate solution to the cancellation of fairs and auctions. We review the most significant cases in this crisis and their development in recent years.

The global economy is plunged into a scenario of uncertainty as Covid-19 spreads across five continents. To contain the spread of the virus, museums, art galleries and cultural centers have been closed, and auctions, art fairs and exhibitions have been cancelled or postponed, many of them without a date, bringing the cultural industry to an almost complete standstill. The art market could withstand the new challenges if galleries, auctions and institutions are agile and explore innovative ways to support their artists and serve their clients. Resilience opens a new panorama in 2020 where artistic agents are looking for technological solutions to interact , a digital transformation that gains in urgency.

According to historical economic data, the art market is less volatile in the face of recession or financial crisis. The sales volume – both in the private market and at public auctions – was $64.1 billion in 2019, of which the Spanish market represents 1%. These global figures represent a total increase of 9% from 2008 to 2019.

Art Basel Hong Kong was the first major art event to announce its cancellation. It reacted quickly by setting up a digital fair

Online sales in the period from 2013 to 2018 have increased from 1.507 billion to 4.636 billion dollars. The most purchased medium has been painting, surpassing engraving for the first time, and the most used social network to follow artists and buy art is Instagram (certified by the Hiscox Online Art Trade Report 2019). According to a survey carried out on 70 online platforms, the average sale price is 5,000 dollars, although around 10% of their transactions are over 250,000 dollars. On the other hand, another survey carried out on 660 HNW (people who invest more than 1,000,000 dollars in different assets) shows that they have bought works online for 50,000 dollars (65%) and 8% have acquired pieces over 1,000,000 dollars (McAndrew, 2020).

The weight of fairs

In 2019, galleries and dealers accounted for 56% of total sales volume, compared to auctions (44%). Private sales have increased by two percentage points to the detriment of the secondary market, with galleries therefore becoming more important. Art fairs are a very important sales channel for both galleries and dealers (between 30 and 47% of total annual sales volume in 2019). However, Covid-19 is threatening this hegemony.

In early February 2020, Art Basel Hong Kong was the first major art event to announce its cancellation due to the coronavirus. The organization reacted quickly by setting up a digital fair in March , so that exhibitors could present, free of charge, the works they intended to show on their stands, now through the so-called “Online Viewing Rooms.” Throughout the month of February, fairs such as ARCOmadrid were held with great success in terms of public and sales, however, on March 11, TEFAF in Maastricht had to close four days before its closing date after some of the exhibitors tested positive for coronavirus. The closure was a hard blow for the participants who were counting on this major event for their economic survival. Later came the trickle of cancellations and postponement to dates beyond the summer : Frieze New York, Art Basel, Art Dubai, or ARCOlisboa, among others.

Some galleries have been able to react with innovative proposals , such as the Spanish Sabrina Amrani with openings via videoconference and digital exhibitions, the British Saatchi, with virtual visits to the artists' studios, or the American David Zwirner who, with their offices closed, have migrated to the online format in order to continue exhibiting and selling art. In Spain, other galleries are providing content, videos and documentation through their newsletters and websites, such as NF or Heinrich Ehrhardt. There are online platforms that are offering galleries the possibility of holding virtual exhibitions or sales. Likewise, some gallery owners have been experimenting with digital marketing, either on social networks such as Instagram or with Display advertising on Google.

Joël Andrianomearisoa: 'From Home'

The virus has also hit auction houses . Postponements in Hong Kong and mainland China began in January, followed by those in New York by Christie's, Sotheby's and Phillips. On March 22, Sotheby's closed its offices and salesrooms. On April 2, it announced the dismissal of 12% of its staff and the reduction of the salaries of its remaining employees. However, the major auction houses have a lot of experience with online sales. Sotheby's, for example, recorded a 25% increase in 2019.

Meanwhile, in China, now back on its feet, Phillips will hold its Hong Kong auction in June at the JW Marriott Hotel, and some Shanghai galleries, such as Made In, have announced their reopening under strict safety measures: masks during visits, QR code verification proving Shanghai residency, and body temperature checks.

According to historical economic data, the art market shows less volatility in recession situations

The closure of all museums is a hard blow for the cultural sectors. Art galleries such as El Prado or Lázaro Galdiano are distributing educational resources, online catalogues or videos of exhibitions. In the United States, there have been initiatives such as that of The Getty Trust, which has donated 10 million dollars to support non-profit art associations in Los Angeles. Also noteworthy is the Google Arts & Culture project, which has been compiling virtual visits to museums around the world for many years.

In Spain, the Institute of Contemporary Art (IAC) has issued a report that reflects the same global trend: cancellation of exhibitions in galleries and museums, falling art sales and layoffs. Added to this is the fact that the sector lacks the digitalisation necessary to cope with a lockdown situation. It would be a good time for agents to start seeing technology as an ally and not as a competitor to the face-to-face format.