AUCTION HOUSES & GALLERIES
It’s well known that over the next 10-15 years there will be a $68 trillion transfer of wealth to the next generation – millennials and Gen Z. While this is a large transfer, we should also note that this demographic is the largest by size population in history. However, it does mean that brands will need to adapt to the needs of this new audience in order to capitalise on market share.
The buyers are getting younger and looking not just at traditional art, but at collectables as a whole. Now more than ever, there’s greater integration between the luxury world and the art and collectables arena. Today, someone who collects art might also be an avid luxury watch, handbag, or trainer collector.
The traditional lines are becoming blurred and the demand for the ‘right’ experience at a gallery or auction house is changing with peoples’ tastes. For the art world, collectors want to see works of art from women and people of colour as well as different interpretations of art, not just the ‘old’ masters.
What are the key drivers for art and collectables buyers nowadays?
Research has shown that new consumers today are interested in art for different reasons:
- Mental health. Historically this didn’t play a huge role in collectors’ decisions but today people want to feel better, stronger, and inspired from the art and collectables they have around them.
- Diversity in portfolios. The traditional view of ‘value’ is changing with a greater diversity in tastes and backgrounds. People are looking for this in their collections; in other words, a collection that represents its patron. So we are seeing a need for wider artist communities to be elevated.
- ESG responsibility. Collectors as well as the art community are voting with their feet, forcing auction houses to follow suit. Art is now being transported by sea rather than air offering up to a 90% reduction in emissions. While galleries such as Guggenheim in Bilbao are leading the way trying to make their spaces meet net-zero targets.
What else do we know about this new audience?
With the anticipated shift in wealth to the next generation, it’s crucial to understand this evolving audience in greater depth. And there are a number of ways that millennials are different from the previous generation.
Auction house, Phillips, also reported 40% of its sales in 2023 were from new customers. A marked shift in who is buying art and collectables. That said, there could be additional contributing factors such as inflation that help elevate this stat (people moving from traditional investments into the art world). We know:
- They are more educated, more entrepreneurial, and more socially conscious. This will likely lead to a shift in the way that wealth is invested and managed.
- They are more interested in sustainable investing than previous generations. They want to invest in companies that are making a positive impact on the environment and society. This will likely lead to an increase in investment in sustainable businesses.
- Impact investing is a type of investing that seeks to generate financial returns while also having a positive social or environmental impact. This is a concept that’s becoming increasingly popular among millennials.
- Digital wealth management platforms are making it easier for people to invest and manage their wealth. This will make investing more accessible to the next generation including passions around the art world.
Diversifying your approach
Digital programmes must rise to this change in order to capitalise on market share. The art world is traditionally behind the curve when it comes to digital media and how it can help brands to reach their target audience, engage with them, and then retain them for the longer-term. So, whether you’re a gallery or an auction house, here are some considerations to help you carve out focused KPI-driven campaigns:
- Wealth consumers’ tastes. We need to reflect the tastes of our consumers through the use of premium creative, video, and content. The world this audience lives in is premium and therefore we need to speak to them in a language that reflects their tastes.
- Needs-based marketing. We’ve discussed how the new generations’ needs have changed; it’s important to reflect this in our communications. We must flip marketing on its head and show how the art, collection, and installation etc. is reflective of the emotional needs of the consumer.
- Targeting. This generation is very connected and, depending on their age, will engage with a variety of different platforms to consume content and information. Diversification is therefore key in order to meet these needs. From TikTok and the demands of a high-intensity video platform, through to polished websites that help to bring the artist to life, and innovations in the MetaVerse to connect the online and offline world for fully immersive experiences.
- Data. Underpinning all the digital development should be a strong data set that allows you to understand your communities in greater detail and build a lifetime connection with them.
Opportunities for digital in the art & collectables world
Digital is not just about pushing a particular installation or artist but rather it’s about building a lifetime connection with the gallery or auction house, which can be done by understanding how they want to interact with you.
To this extent we can take a leaf from the retail industry which builds focused and advanced CRM programmes based on their data. The added advantage of using this approach in the art world is the stronger emotional connection, which helps to ingrain the brands in a more meaningful way, driving longer-term benefits.
With increased competition, this will also help your brand to stay current. Someone like the Serpentine no longer has to compete with collections/installations from other galleries, but the online space and new technology does mean that the share of voice is harder to retain. Developing a strong digital programme can help to combat this and indeed, take advantage of the new generational shift.