Vango turned three this month! Every year we reflect on what we’ve accomplished the past year and what we’ll do over the next 12 months to achieve our mission: to improve the experience of buying/selling art. Admittedly, we have done far more for buyers than artists (something we’ll come back to).
This year our anniversary coincided with the release of the 2017 Annual Hiscox Online Art Trade Report. The report looks at online art spaces, current trends and provides an outlook for the next year. So, given that we are now three (and thus “mature” in startup terms), we thought it would be worth comparing ourselves to the overall trends to see how we are doing, to capitalize on them and to identify areas we (and the online art space as a whole) can improve.
5 Key Online Art Trends (Online Art World :: Vango)
- Average 3yr Growth (27% :: 100%)
Now, this number isn’t quite fair because as a startup, we are geared toward faster growth since we are starting from nothing and are capitalized. It is worth noting that online art growth has been on a downward trend; however, it is growing faster than the offline art market. The online art market has experienced an increase in the % of art sales for pieces listed under $5,000– accounting for 75% of art sold this year (up from previous years). In other words, there is a decrease in the number of high-end art sales but a definite increase in the number of buyers purchasing affordable artworks. So, while there is a decline in the overall online art market, these numbers are driven by fewer and fewer people buying six-figure art pieces. As this trend continues, lower price-point pieces will make up for the decrease in demand for larger pieces and, in turn, drive the overall growth.
2. Repeat Buyers (65% :: 78%)
These are the number of people who buy more than once in a given year. In the online art market, this increased by 2%. At Vango, we have not only seen this number continue to increase but, if we look at a two-year window, we see the repeat purchase rate at 92%. This shows what most of you already know: Art is addicting! So if we can get people across the hump to buy their first piece, they are almost guaranteed to come back and buy another. At Vango we see repeat buyers purchase an average of 6 pieces per year and spend 67% more each time they purchase. Now we just need to get more folks across the hump (more on that in our next post).
3. Spend less than $5000 (79% :: 98%)
When we started Vango we looked at the market and saw a real gap in the $250-$2500 price range so this is where we decided to focus our efforts. We wanted to ‘bridge the gap.’ We learned buyers weren’t willing to spend thousands (or even more than a few hundred) on their first purchase. On average first-time buyers are willing to spend $200 and, as our previous point showed, once they buy they are likely to return and spend more with each purchase. We believe that Hiscox’s online art market number is skewed by whom they interviewed, and this number is actually in the 90s industry wide.
4. Instagram is buyer’s preferred go-to social media platform (57% :: 90%*)
Now the math here isn’t perfectly comparable between our findings and that in the Hiscox Report. Hiscox’s approach to data-gathering here was to ask people what their favorite social platform is, at Vango we looked at all our platforms and calculated the % each contributes to our total social following. On Instagram we have 250k followers (90% of our following) between our @art and @vango accounts. When Vango was founded we decided to focus on Instagram and acquired the @art account which has been a great complimentary tool for artist discovery. While the report says Facebook is second with 58% of users reporting their preference for it, followed by Twitter and Linkedin (not sure why they don’t include Pinterest), however in looking at our source of sales, Instagram leads to 5x more organic sales than the others combined.
5. Collectors getting more confident buying higher prices (61% :: 100%)
The data comparison doesn’t directly translate (again), but we do see this trend as our average price of artwork sold has increased 250% over the past year. We should say that our average price of pieces for sale has grown 80%. We also see repeat buyers spending 67% more on each subsequent purchase, which also has to do with our increase. We see this continuing to grow as we get more new collectors into the market and they continue to buy multiple pieces.
The Immobile Art World
The one area we see a huge difference is mobile! The report shows only 20% buy on mobile and 85% on desktop. Ours is the exact opposite! We believe this is twofold:
First, not many online art companies have a great mobile web experience nor a native iOS or Android app. Second, we have put more energy toward our iOS app . We believe this number would probably be closer to 60/40 if everyone had a good mobile experience. One of our core theses was that mobile-enabled us to do three things:
- Visualize the art on the wall
- Create a better user experience
- Increase browsing to increase buying, and that has proven true for us.
We are curious to see how this changes in years to come as hopefully more online galleries focus on their mobile experience.
Hesitation Purchasing Online
If you look at what we could have improved it is very similar to what the report identifies as reasons users are hesitant about buying. Albeit biased, we would say we at least tried on most of these:
- More Information about Art/Artist – we provide multiple images per piece, artist bio videos.
- Art Education is Key – this was by far our weakest point
- Pricing Transparency – we started with all artwork at $250, then evolved to ‘tiers,’ now we are more open but looking at ways to create a value/Klout score.
- Human Interaction – we introduced conversational commerce within the app so you could chat live to someone and even video chat.
- Customer Feedback – we do include this publicly.
- Return Policy – we have a 7-day return policy; we think it may be worth experimenting with 14 and 30 days.
Waking up the Sleeping Art World
The authors of the report said, “For those who say the online art market has had its day – it has not even had its morning yet, it’s still waking up.” We AGREE, but believe there are obvious reasons why there’s this misconception (hint: few people are truly innovating the space, and the big players certainly are not). The good news is there are also simple actions we can take to improve the online art market.
Over the next five weeks, we will share my views on why the online art world is still ‘waking up’ and how online galleries can give it the jolt it needs to rise to its full potential. We will also talk about selling online from the artist’s perspective, which surprisingly (or not) this report does not cover. Lastly, we will look at the future of the online art market and we’ll give you a hint as to how Vango sees itself as part of it. Please leave questions or comments below or on Twitter @vangoart.
Reviewing the Online Art Market Series 2017