2020 In Review: The Response of High-End Auction Houses to the Pandemic
MADE IN BED’S Editor-in-Chief, Emily Crozier, looks back at 2020 to answer how (and how well) did high-end auction houses respond to the impact of COVID-19.
The art world has not been immune to the impact of the Covid-19 crisis. The initial response for most art institutions worldwide, in line with government regulations, was to close their doors. For the titans of the art auction world, Sotheby’s and Christie’s, there appeared to be little to no respite in the days that followed the last live auctions in mid-March. Urgent action was taken to ensure that cancelled live auctions were postponed or converted to online sales. This article will focus on the response of high-end auction houses to dramatically accelerate their online sales programme.
At this point, it almost seems cliché to refer to the current socio-economic situation as ‘unprecedented times.’ However, no one knows what responding well to a pandemic looks like. In deciphering how well these auction houses have responded in 2020, I shall consider the implications of this online shift and the resulting statistics.
Sotheby’s and Christie’s, who had previously been reticent to join the digital age, seized their opportunity when the first lockdown restrictions came into place. These auction houses rapidly raised their number of online-only auctions, adding sales like Sotheby’s first-ever online day auction of Contemporary and Impressionist & Modern Art. Unsurprisingly, this led to an increase in revenue generated from online auction sales. Figures reported by ArtTactic would suggest this response to the pandemic was well received as total online sales revenue increased by nearly 500 percent (compared with 2019) for Christie’s, Sotheby’s and Phillips in the first half of 2020.[1]
Charles Stewart, the chief executive of Sotheby’s, claimed the slow-progress to shift more auctions to the online platform in years past, was due to scepticism among in-house specialists, fearing resistance from longstanding clients.[2] In the wake of Covid-19, with no other avenue of buying art, 70 percent of online buyers and bidders were clients already affiliated with Sotheby’s. Thus, new buyers and bidders account for the remaining 30 percent.[3] With little else to do, other than amuse ourselves on our computers, the convenience of being able to enter an auction from the confines of one’s own home appears to have become more appealing to the public. Sotheby’s updated online sales programme was able to empower a previously untapped group of art lovers and turn them into collectors.
It is evident that these traditionalists Stewart speaks of, did not account for the digitally literate, new generation of potential buyers. Sotheby’s reported an increase of over 30 percent in buyers and bidders under 40.[4] The response by these auction houses to increase online-only sales has made it easier for younger entrants to navigate what has often been seen as the esoteric art world. The ability to enter an auction without stepping through the intimidating doors of an auction house, being confronted as an ‘outsider’ or younger client by a member of the art world, appears to have benefitted both the client and the auction houses.
Figure 1. Sotheby's, Oliver Barker Fielding Bids, June 29, 2020, London.
In attempts to recreate the ‘pizzazz’ of an evening auction, this year the high-end auction houses introduced globally live-streamed auctions during the pandemic. On June 29th, the chairman of Sotheby’s Europe, Oliver Barker, fielded bids via what he described as a “mission control-style, zero-latency video stream.”[5] The eight screens that Barker faced showed real-time footage of colleagues taking phone bids in Sotheby’s auction houses in London, Hong Kong and New York. Clients were also able to place bids through Sotheby’s online bidding platform. The most noteworthy bidding war, between an online bidder in China and a telephone bidder, was over Francis Bacon’s Triptych Inspired by the Oresteia of Aeschylus. This went on for more than ten minutes and, in the end, the online bidder was out-bid at an astounding price of $84.6m. The fact that someone was willing to bid $73.1m online demonstrates that online buyers were willing to transact at high levels and the success of Sotheby’s in fostering the competitive bidding usually seen at pre-pandemic evening sales.
On the 10th of July, Christie’s conducted a live-streamed auction. This lasted four hours and totalled $421million in sales. Despite receiving praise for their resulting sales, the verdict on how well these live-streamed auctions were received is not unanimous. The Art Newspaper’s Anna Brady was of the opinion that these auctions “struggle[d] to convey the excitement and urgency of a real-life salesroom.”[6] An artnet news report contradicts this by describing how “the sale picked up steam and fell into a palpable rhythm.”[7] As several outside factors played into the sales figures achieved (including pre-auction guarantees and “third-party irrevocable bids”), the results are not conclusive of the auctions’ success and four hours does seem ambitious for maintaining audience interest.
Figure 2. Sotheby's, Bidding Room New York, June 29, 2020, New York.
In deciphering the success of these live online auctions, the marketing images and media coverage should be considered. Figures 1 and 2 were taken during Sotheby’s first live-streamed auction. These images show the juxtaposition of old and new technology- the advanced technology allowing for this auction to be globally live-streamed and the old-fashioned landlines in the international bidding rooms. This spectacle demonstrates the innovative advances of Sotheby’s, whilst still referencing its reputation as a traditional auction house. These images have now been circulated globally. Viewing Figure 1 or 2, without any knowledge of the impact Covid-19 has had on the auction house, it would be easy to assume Sotheby’s is thriving. The desired effect of these images would be to bring in new buyers, a fact that has already been confirmed. These marketing tools communicate the response of Sotheby’s to the pandemic as successful.
In May, Pi-eX found that total sales at Christie’s, Sotheby’s and Phillips had fallen 97 per cent worldwide.[8] Despite the innovative responses from auction houses to the issues caused by Covid-19, the impact was still described as “severe” in September by Anders Petterson, founder of ArtTactic.[9]
The measures taken by auction houses in response to the pandemic may be unsatisfactory to the likes of Anna Brady, however, the commercial gallerist David Zwirner would argue that the pre-pandemic art world “got out of hand, especially the market: crazy auction prices and the rest.”[10] Before Covid-19, Iain Robertson also expressed concerns for the price of art exceeding value.[11] If it is true that auction prices were becoming outrageous and not wholly reflective of value, taking into account the lesser revenue generated by Sotheby’s and Christie’s in 2020, the response of auction houses in the pandemic has diluted the perceived obscenity of art sales that we had come to normalise.
If the gauge of how well auction houses have reacted to the impact of the Coronavirus was based on Jerry Saltz’s initial fears, that the art world was nearing its final days, then it would seem Sotheby’s and Christie’s have exceeded expectations.[12] There still appears to be a future for auction houses. The positive takeaways from the recent acceleration of the online sales programmes have led academics to believe that the online art business landscape has changed forever.[13] Thus, the model for auction houses post-pandemic is likely to be more of a virtual and physical hybrid. Features introduced during the Covid-19 crisis are likely to “stay for good”, says Guillaume Cerutti, chief executive of Christie’s.[14] As the increase in online activity has the potential to be brought forward into a post-pandemic art world, it can be presumed that the response from high-end auction houses has been successful.
The high-end auction houses’ response to the pandemic defied the reasoned supposition made by art world professionals in the initial stages of the outbreak. The accelerated shifts in online activity, that the art world assumed would take years for Sotheby’s and Christie’s, were executed effectively in a condensed period of time. The innovations in the online sales programme allowed for an extended global reach (drawing in new and younger buyers) and this response has taken steps forward in making the art world more egalitarian. The introduction of live-streamed auctions showcased the technological advances made by Sotheby’s and Christie’s in such adverse times. This has instilled confidence in buyers to place bids at the highest level. Despite these efforts, the global health crisis still negatively impacted revenues (compared with previous years) for the top end auction houses. Although this may not have been the outcome Sotheby’s and Christie’s wanted from their efforts, the lowering of auction sales has been beneficial for the larger art world.
Sources:
[1],[5] &[9] Gerlis, Melanie. “Art sales fall 97% at the biggest auction houses.” Financial Times, June 4, 2020.
[2] Pickford, James. “Auction houses tear up the rule book.” Financial Times, June 23, 2020.
[3]&[4] Sotheby’s. “INNOVATION & ADAPTATION DRIVE SOTHEBY’S YEAR-TO-DATE SALES IN 2020 TO $2.5 BILLION.” Sotheby’s, August 3, 2020.
[6] Brady, Anna. “Christie's $420.9m global relay sale was ambitious—but did they really need four auctioneers?” The Art Newspaper, July 10, 2020.
[7] Kinsella, Eileen. “Christie’s First-Ever ‘Relay’ Sale Brought in an Impressive $421 Million in a Four-Hour, Four-City Digital Marathon.” artnet news, July 10, 2020.
[8] Pi-eX. “Pi-eX Quarterly Report Summary: First Quarter 2020.” Pi-eX, 2020.
[10] Dickson, Andrew. “Bye bye, blockbusters: can the art world adapt to Covid-19?” The Guardian, April 20, 2020.
[11] Robertson, Iain, and Derrick Chong. “Introduction to Studies in Art Business.” In The Art Business, edited by Iain Robertson and Derrick Chong, 21. London: Routledge, 2008.
[12] Saltz, Jerry. “The Last Days of the Art World … and Perhaps the First Days of a New One: Life after the coronavirus will be very different.” Vulture, April 2, 2020.
[13] Boloten, Jeffrey. “Buying and Selling Art Online.” Lecture presented at Sotheby’s Institute of Art, London, Tuesday 6 October, 2020.
[14] Pickford, James. “Auction houses tear up the rule book.” Financial Times, June 23, 2020.
Imagery sourced from Sotheby’s https://www.dropbox.com/sh/0ofpzrv8bx3sbxs/AADIJV2LbHP6MsurrVA3Vmmua/Auction%20Images%20%2B%20Video?dl=0&subfolder_nav_tracking=1.
Emily Crozier
Editor-in-Chief, MADE IN BED