How a few savvy early adopters have used ArtTech to keep their art institutions afloat during the pandemic.
The COVID-19 pandemic has been cast as a black swan event — a phenomenon so unimaginable, so disruptive, that there was no way it could have been predicted. Within this scenario, no industry, including the arts industry, was able to prepare for the catastrophe. And it was only after the onset of the pandemic that auction houses, galleries, and other institutions were able to rally by embracing digital solutions such as online events and auctions.
Yes, this is the narrative we’d like to tell ourselves — that there’s no way the art industry could have foreseen the economic devastation that began in 2020. But there’s more to the story.
Casting the pandemic as a true black swan event isn’t accurate. It’s true that the world was woefully unprepared to manage the pandemic, but it would be wrong to say we weren’t aware of the risks that could lead to such an event. The Pentagon, for example, warned the White House about the threat of a novel respiratory disease in 2017.
Of course, the art industry isn’t in the business of making predictions about pandemics. It is, however, in the business of producing, selling, and distributing art — it’s folly for any arts institution to think that in the 21st century, these activities shouldn’t undergo digital transformation to boost growth and offer protection against catastrophic events, including pandemics.
Could the art world have done more to mitigate the economic impact of the pandemic?
The answer to this question is an uncomfortable, yet resounding yes. Fortunately, it’s not too late for the industry to adopt ArtTech, a term that refers to the leveraging of new technologies to modernize operations and provide safeguards against future disruptive events — black swans or otherwise.
The Art Industry is Behind the Curve on Adopting New Technologies
For the past decade, numerous nascent industries, including FinTech and EdTech, have emerged to help manage compliance, assist with disaster recovery, and modernize operations. The FinTech market, for instance, is experiencing rapid growth, and it’s predicted that this industry will lead the charge in post-pandemic economic recovery. Meanwhile, EdTech was primed for the sort of boom that occurred when students were forced to learn remotely.
Unfortunately, on the whole, the art industry didn’t readily embrace ArtTech, a neologism similar to FinTech or EdTech that refers to the massive leveraging of new digital technologies, until after the onset of the pandemic.
These digital technologies have impacted every aspect of the art industry, from the supply chain to the methods institutions use to make sales. By April of last year, many art institutions that had to shutter in-person art fairs, auctions, and exhibitions turned to online platforms and digital spaces. And whereas fine art shipments once traveled between various destinations using human couriers, travel bans and import and export restrictions have necessitated the use of tech-driven shipment trackers and other tools to move from Point A to Point B.
Despite these efforts, in 2020, the arts, entertainment, and recreation industries incurred massive economic setbacks — and they aren’t expected to recover to pre-COVID-19 levels until at least 2024.
How Some Institutions Stayed Afloat By Embracing ArtTech Before the Pandemic
In January, journalist Kelly Crow wrote in the Wall Street Journal that “Sotheby’s, Christie’s and Phillips tossed out their traditional playbooks when the [COVID-19] crisis hit and it was no longer safe or possible to coax hundreds of bidders into a saleroom. Instead, the auction houses redirected art lovers online, adding hundreds of online-only sales that allowed people to click-to-bid in timed auctions.”
Yet these very same auction houses had already started embracing digital solutions before the pandemic hit. Phillips, for example, experienced year-to-year growth in online sales for a number of years. In 2019, digital engagement was a priority for the auction house — this led to $75 million in online sales, an increase of 50 percent from the previous year. Notably, 40 percent of online bids came from Phillips’ mobile platform.
Big auction houses such as Christie’s and Sotheby’s, and Phillips are still experiencing losses due to COVID-19. But during a time when the pandemic is forcing some institutions to close their physical sites, online-only auctions broke through the $1 billion mark for the first time in 2020.
ArtTech is Here to Stay
Although COVID-19 wasn’t a true black swan event, it would’ve been very difficult for most industries to predict when and where it might’ve appeared. In the future, there will be other events — black swan and otherwise — that rock the art industry. The trick will be to get ahead of these events through digital disruption.
So, what needs to happen? First, the art world needs to acknowledge that auction houses, galleries, museums, and other institutions must also be able to communicate with greater speed and efficiency with collectors and clients across the entire art world ecosystem. To do this, they will need to adopt ArtTech such as CRM tools and automated platforms that collect, store, analyze, and automate operational processes. Not only will these tools help the art world weather further catastrophic events, they will also modernize the industry, paving the way to increased growth and sales.
You might also like these articles:
- How art world leaders can embrace new money laundering regulations
- Settling into Click-and-Mortar: The New Prime Real Estate
- Artnet Innovator 2020: Sean Green
Born in Jamaica and raised in Toronto, Sean Green holds a BA in Computer Science from York University. Since graduating in 2011, Sean has been the consummate entrepreneur following his instincts, which eventually lead him to the business of art. Based in Los Angeles, Sean oversees all aspects of ARTERNAL’s evolution, in partnership with his co-founders. Recent global events have forced dealers to revisit their model, focusing on digital platforms to sell art. As an entrepreneur in the Art + Technology industry, Sean is dedicated to providing leading software solutions to develop alongside the art market’s demands.