The Art Market’s Shift Online Determines the Need for a New Auctions’ Aggregator
Examining the opportunities for the post-covid Art Market, MADE IN BED’s contributor Chiara Aluigi meets Lot-Art, a global art search engine and investment advisory platform.
On May 19th, a significant milestone was reached as Sotheby’s held its first online Impressionist & Modern Art sale. The auction, held online due to COVID-19 lockdown restrictions, generated a turnover of nearly $10 million, a record for an online auction. The participation of international collectors was high, with buyers from over 30 countries and each lot (113 in total) contested by an average of 3.5 bidders. According to the auction house, 29% of buyers had never participated in a Sotheby's auction before.
This number is very significant, as it could indicate that the shift to online sales, necessary in times of pandemic, might actually be a positive thing for the art market in terms of client acquisition and conversion.
Giorgio Morandi’s Natura Morta realised $1.6 million: the highest price for any lot sold in an online sale at Sotheby's.
According to the 2017 TEFAF Art Market Report, the market of online auctioning is booming: in 2016, online art sales rose to $3.75bn. Analysts predict that the market could be worth $9.14bn by 2021. The online art market is following a steady growth path, yet it still faces challenges that prevent it from expanding. Among them are the lack of trust by some collectors that are hesitant on buying collectible items without physically inspecting them first.
Another challenge is the number of online players in the art world. From auction houses, to galleries, to art marketplaces, many options exist nowadays for trading art. While the proliferation of these platforms is a positive thing for the market and for price transparency, it might represent a challenge for collectors in terms of navigation and complexity.
Auctions aggregators as a solution
Auctions aggregators are websites that collect and compile data from different auction platforms and make it available in one place. They allow users to compare purchasing opportunities and prices of items offered by different auction houses and art marketplaces. Auction aggregators generally follow two models:
Aggregators incorporating a bidding platform. For instance, Live Auctioneers offers the possibility to conduct transactions on its website by hosting thousands of auctions in real time online, allowing access to remote sales and the possibility to scout for opportunities.
Aggregators operating as linking platforms, by redirecting users to auction houses and galleries, such as Lot-Art.
Source: Lot-Art
In looking more into Lot-Art, the art investment platform provides collectors with catalogues of upcoming sales listed by auction houses located around the world. The founder of the platform, CEO Francesco Gibbi, being a seasoned collector himself, created it with the intention of building a database that would allow him to easily navigate the online art market and to immediately identify the best deals at auction.
Concerned about the need for more transparency and efficiency in the art trade, Francesco decided to officially launch the company in 2017, together with CTO Milan Madar. They could have never imagined that the platform would encounter such great success: Today, Lot-Art counts more than 340.000 users from all around the world.
Source: Lot-Art
Lot-Art offers both B2B and B2C services: Through its Art Investment Advisory service, users can compare the prices disclosed by different sellers. Throughout the whole process, Lot-Art assists collectors by guaranteeing a high level of price transparency and information availability. Currently, conscious of the pandemic’s consequences on the art market, Lot-Art supports sellers by allowing them to list their catalogues on the website for free.
Source: Lot-Art
The mission of Lot-Art is to enhance the role of fine art investment as an effective portfolio diversification option by understanding the increasing investment opportunities offered by the art and luxury markets. According to Francesco Gibbi: “Lot-Art combines big data analytics, market expertise and AI to assist investors in acquiring quality artworks which are also sound financial investments, assuring the asset will carry the highest degree of liquidity and opportunity of return by exploiting the geographical arbitrages and information asymmetries arising in the global art market”.
The company is already exploring further developments, as the founder also announced the launch of new dedicated services to art collectors such as providing analytic market insights to help them make informed investment decisions in art and luxury assets. The new services are expected to launch in June 2020.
Source: Lot-Art
During and after pandemic times, macroeconomic factors, such as inflation and forex volatility, will inevitably affect assets’ value. The advantage of investing in art is, on one side, to protect the investor from such factors and on the other, to gain a higher personal reward related to the history, the aesthetic beauty and the prestige of ownership of a precious artwork or luxury asset, such as watches or classic cars.
Considering the inevitable online shift of the art market due to the global pandemic, auction aggregators represent a great opportunity: through their services, they add an indisputable value to the art market by facilitating discovery, price transparency and transactions, as reflected by the positive growth of the online auction industry.
Chiara Aluigi
Contributor, MADE IN BED