Innovation and experimentation in the digital art market is not just about technology: the impact of ecommerce business models is prompting established companies such as Christie’s to re-examine their sales strategies in order to shake out new revenue streams.
The Telegraph reports that Christies are “to break with 250 years of tradition by offering items for immediate purchase at a fixed price, similar to how Ebay allows shoppers to bypass the bidding process.” Forty two lots will be offered for sale online and in the company’s Kensington saleroom at a fixed (premium, tax-inclusive) price in advance of their auction sale. Although referring to it as a “new approach to buying” the experiment is cleverly timed to coincide with the Christmas gift-buying market (even offering gift-wrapping). And in a further indication of the importance of reaching out to new customers both online and via their saleroom:
“Buyers don’t have to bid – they can walk into our saleroom in South Kensington and walk out with their purchase, or they can visit our website. If people aren’t familiar with Christie’s or the auction process, it is a good way to introduce them.”
- Christie’s auction house copies eBay’s ‘buy it now’ model (The Telegraph)
The most digital-savvy art businesses are developing business intelligence systems to support their digital sales strategies. In the context of a booming contemporary art market and the fact that one in four of the top lots in this spring’s evening sales were bought by new customers, John Dizard writes in Friday’s Financial Times (Auction houses embracing digital technology to sell to the new global rich):
While the most visible aspect of the houses’ digital revolution may be their online auctions, the most essential is in the systematising and networking of their customer, market and lot information.
Christie’s Steven P. Murphy echoes statements he made in previous months about the imperative driving his business’s digital strategy. Their customers were researching and purchasing art online. Christie’s needed to create “a digital version of the Christie’s experience in a platform-agnostic way.” A key part of Murphy’s digital strategy is an internal customer data intelligence platform called ‘James Map’ which joins up customer information throughout Christie’s and makes it available to Christie’s staff globally through internal applications. Whenever and wherever a customer interacts with Christie’s, all intelligence about them will be at the fingertips of Christie’s staff. FT.com quotes Christie’s Ken Citron, head of IT: “We are a global company now, with global clients. Our having technology allows them to have a consistent experience across the world.”
A fundamental question about digital strategy is behind Christie’s latest digital investments: Is there greater benefit in outsourcing technology and platform provision, or in in-house development (at considerable cost). Sotheby’s partnership with eBay is an example of the former; Christie’s is betting on the latter. Dizard’s article closes with a warning from Murphy about the dangers of disintermediation in digital markets. Perhaps with his publishing background, Murphy is thinking of how publishers have been disintermediated from their market by Amazon, a fate he is determined to avoid at Christie’s. Sotheby’s (and particularly Dan Loeb) will doubtless be watching with interest.
- Auction houses embracing digital technology to sell to the new global rich (FT.com, 19 September 2014)
While its rival Sotheby’s gathers headlines for boardroom dramas, Christie’s CEO Steven P. Murphy has been promoting Christie’s digital strategy in recent weeks. In an interview with Bloomberg TV Murphy set out Christie’s digital plans as well as its 360-degree online/offline approach to ensuring its customers have a “unique and seamless Christie’s experience” via Christie’s online, in their salerooms or through the growing number of Christie’s exhibition spaces..
A number of themes common to any discussion of the web’s impact on art sales run through Murphy’s responses: Continue reading
The weekly US financial newspaper, Barron’s, in a blog posting Friday November 8th by Robert Milburn (“Art Auctions Head Online“) frames the current technology-driven transformation of the art market as an opposition between the traditional Goliaths, Sotheby’s and Christie’s, and the upstart Davids represented by “tiny” Paddle8. This opposition brings to mind Malcolm Gladwell’s phrase regarding his latest book, the “mighty leverage of the unconventional.”
Melanie Gerlis (@mgerlis) of The Art Newspaper reports:
Daniel Loeb, the chief executive and founder of the hedge fund Third Point, has become the largest shareholder in Sotheby’s and made public a stinging letter calling for the resignation of the auction house’s chairman and chief executive, Bill Ruprecht. A core issue raised is Sotheby’s lack of an online sales strategy, particularly in relation to its rival Christie’s.
In today’s multi-platform digital world, a key strategic item on every art market CEO’s agenda is to establish high quality, high visibility digital services in order to diversify existing sales channels and extend into new markets. And it’s no longer simply a case of knowing your position relative to established competitors. New entrants to the market are capitalizing on the disruption digital is bringing to the art world and are looking to take market share. Continue reading
Deloitte’s 2013 update of their Art and Finance report includes for the first time a section on ‘Growth of the online art industry’ (section 4, pp. 54-58). Essential reading for anyone interested in art market technology, the Online section of the report includes:
- Survey: online art industry – perceptions and attitudes
- Online art businesses are seen as key in developing the Art & Finance industry
- How the online art industry can contribute to the development of the Art & Finance industry Continue reading