Thursday, November 12, 2020

How to Make Smart Investment that Increases Art Sales

art sales - statue with mask

It is undeniable that COVID-19 has had a big impact on the art world this year. Throughout continuous lockdowns and temporary business closures all over the world, galleries that rely on regular exhibitions and art fairs to foster client relationships and generate sales are suffering. 

In lieu of in-person exhibitions and art fairs, many galleries, museums, and fairs have shown adaptability by hosting and participating in a variety of online viewing rooms and digital events. 

However, despite areas of innovation, the impact of COVID-19 has hit smaller galleries the hardest. A mid-year 2020 art market survey conducted by Art Basel and UBS show galleries on average reported a sales loss of 36% when compared to the same period in 2019 and galleries within the sales bracket of $250-$500K annually showed a drop of 47%.

Though sales have decreased, the survey shows that collectors remain active in the art market and are eager to buy. 92% had purchased a work of art during the first half of the year and 59% reported that the pandemic had increased their interest in collecting.

 

What does this mean?

The key takeaway from this survey is that though the pandemic has had a strong impact on smaller gallery sales, this is not because there aren’t enough collectors that are willing and able to buy. 

So knowing that the market is still there, what steps should you take to sell more art and grow your business?

 

Embrace the Digital 

art sales - phone photos

Until this year the majority of gallery sales have been conducted in person, at art fairs and the physical gallery space. Online sales are increasing, out of necessity during the pandemic, but this is also paving the way for the future of the art world. Hauser & Wirth’s Neil Wenman expresses this in an interview with ArtReview stating “creativity and innovation has never been more important than now when you can’t travel and physically see art. Of course, the nuance of physical experience can’t really be replaced, but collectors, curators and the wider art community, are embracing the digital.”

Embracing the digital also means embracing data. Online retailers have used consumer data to their advantage throughout the last decade. In this respect, the art world has fallen behind. Analyzing customer interactions online, helps businesses understand important user trends and how to market to them more effectively.

In an Artnet article, Penny Gillespie, VP of research at Gartner explains, “the purpose of the data is to make correlations” this “can lead to personalized experiences without knowing the customer, which ultimately leads to greater conversion and even cross-sell and upsell opportunities.”

Great, so as a gallerist or dealer you know you have to be more active in the online space and use data to increase art sales, but how do you go about accomplishing this? Especially during tough economic times and when you have more limited resources?

 

You Can’t Cut Your Way to Growth

art sales - piggy bank

The key to growth is to make smart investments. This is where the old saying “you can’t cut your way to growth” rings true. 

When looking to grow a successful gallery, traditional advice from art dealers is to focus on having a strong group of artists, and an impactful mission. While that is clearly important for any gallery it’s not the only element needed for success.

In a Forbes article, Jennefer Witter, CEO, and Founder of The Boreland Group Inc explains the importance of investing in your business stating “Ongoing success often means spending money. This can be tricky for solopreneurs or start-ups who are often on tight budgets. Regardless of your size, you have to offer the value and services that are industry standards.”

art sales - team working together

One of the best investments you can make in an increasingly digital world is in smart digital tools to help you streamline processes and communication so you can operate more efficiently and have a solid foundation on which to grow your business. 

Why is efficiency important? It may seem obvious, but for any business, time is a salient resource. Galleries are no different. While there are certain areas you feel you can sacrifice efficiency in the short term for the sake of cutting costs, in the long run, you are not optimizing your gallery for scale and growth. In turn, business growth will take longer and be harder to achieve. Harriet Parker, a manager at the Illinois Small Business Development Center describes this well as “opportunity cost” stating:

 

While it's not a line on the profit and loss statement, it is important for business owners to be intentional about identifying and quantifying opportunity cost in their business. Opportunity cost shows up in a number of ways. The most common example is a business owner who spends time on tasks or areas of the business that are not the best use of their time or talent. While they may be saving on the cost of hiring for or outsourcing that work, they are actually costing themselves more by tying up their time, and often doing the job poorly...Growth will happen faster when opportunity cost is addressed.

 

If you’re working with slow outdated systems and constantly navigating multiple platforms to manage the day to day of your business, then that might be an area of opportunity cost for you to consider.

To set your business up for success and focus on selling more art, you should invest in software that will help get you there. ARTERNAL is an all in one platform which includes a CRM, inventory management tool, mobile app, and financial tools. With our platform, you can streamline and consolidate processes, increasing efficiency. We can help you use both financial and client data to your advantage so you can make smarter business decisions and foster better client relationships. 

The future of art isn’t solely online, in-person interaction is still important. However, investing in software can bridge your digital and in-person interactions, and enhance your use of the digital space in a still uncertain time when we are forced to operate more remotely.

 

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