The world in which we live is increasingly digital. With each passing day, it seems that one of the technologies that we've seemingly always relied on is replaced by a simpler, more compact or more accessible version of itself. Auction houses, as it turns out, don't seem to be an exception to this rule. In fact, the New York Daily News estimates that the total value of the online fine arts market will more than double between now and 2019. That leap would bring the total estimated value of the market to an astonishing $3.76 billion. With that said, it can be initially difficult to understand why physical art auction houses still exist. Further inquiry into this subject, however, reveals that these houses actually serve a number of important purposes, even in this modern day and age.
Increased market stratification
One of the most valuable conclusions to be drawn regarding the continuing existence of art auction houses is that online auctions and tangible ones are complementing one another, not trying to replace the other. Somewhat surprisingly, online art auctions actually make up a relatively small percentage of the total art market. According to Robert Read of British company Hiscox, which underwrites a number of high-powered industries, online art buying accounted for only 2.4 percent of the estimated $65 billion generated in total art sales in 2013. In a statement issued by Hiscox on the matter, Read indicated that these online purchases are predominantly made by younger, earlier-career buyers and that they are unlikely to threaten traditional auction houses. Rather, he spoke of an increased market stratification that will lend itself to overall growth of art sales.
"The findings indicate that online art e-commerce will not exist as a separate entity – it will augment and co-exist with what is happening in the real, physical art world," the statement from Read and Hiscox read.
Catering to traditional markets
Once it's understood that online art auction houses and marketplaces are predominantly aimed at younger buyers looking to buy in a lower price range, it becomes apparent that sedentary art houses still serve a significant purpose. For more seasoned collectors looking for rarer and, often, more expensive pieces, traditional art houses offer a more specialized selection. In addition to the selection catered to this specific demographic, traditional art auction houses often offer a viewing prior to the actual auction, so that buyers or those representing buyers can inspect a piece.
Authentication and intangibles
Classic art auctions offer a far higher capacity for a buyer to ensure authenticity of a given work prior to making a purchase. While online auctions can often include a certificate of authenticity with a purchase, being able to actually see and examine the work prior to bidding is a valuable experience. Further, any fan of traditional art auctions won't hesitate to tell you that the social aspects of an auction (the viewings, the mingling, etc.) are unparalleled by online art sales.
Ultimately, art auctions will continue to become more stratified as time presses on. While the two methods differ greatly, it's important to remember that both traditional auction houses and online auction platforms present a host of unique benefits. Log on to www.iCollector.com to bid on all your favorite collectibles!