In this 5-part series, I review the art market as outlined in the Online Art Trade Report by Hilcox. First, I look at the art market and buyer journey, then the online art galleries and how technology plays a role. Next, I look at how traditional galleries are utilizing technology followed by the artist’s journey selling online. Lastly, I look at the future of the online art space. My goal is to look at each segment of the market as outlined in the report and provide insights based on my experience at Vango, and pose questions I believe remain unanswered. While I don’t think the Hilcox report is very scientific, I do use it as a reference point to provide context and structure.
This post will first look at the size of the original online art market, then the buyer’s journey. The buyer’s journey is important because it provides clues on how to grow the market by improving their experience. I believe the online art industry will continue to flourish for three reasons: First, the US is becoming more design-centric, which is evident given the growth of interior design startups such as Havenly, Modsy, and Hutch. Second, people are becoming more focused on experiences and craft. Lastly, once a population moves from 6% of people to 20% we will hit a tipping point where art will shift from something only some people own, to something everyone owns and talks about. Let’s take a look at the size of the market today.
THE ONLINE ART MARKET
In every meeting I have with investors the most common question they have is, “How big is this market?” They understand the problem with the art market, the solution proposed, and have even said they would use the solution themselves, but it is always the market they cannot grasp, and for good reason. The art market is very opaque. Let’s dive into 3 markets: the fine art market, the wall decor market, and the potential market.
This year the online art market was reported at $3.75B. While this number is slightly skewed (21% = $5000+ pieces), I believe it’s larger as this report does not take into account artwork being sold directly by artists (on say Instagram) or by online platforms such as Vango, Art Finder, Rise Art.
Although that number is not insignificant, I believe it is important to consider the wall decor market (posters, prints, photography) which is $30B. While the average price point here is below $100, I believe by addressing buyer hesitation (next section) original art can quickly eat into this number. When we look at marketing on Vango, this is the market and audience we want to target; Vango is, “giving people a better alternative to IKEA prints,” rather than, “turning the world into art collectors.” I’m confident that once you get original artwork into someone’s home they won’t want to go back to prints or posters; instead they will search for more originals and want to learn more about their preferred artists and creators.
Furthermore, a 2013 wall decor report stated that 80% of people had little to nothing on their walls. I believe the reason is a psychological one. People have a tendency to look at their walls as permanent and personal fixtures in their home. This is likely because the past few generations grew up with family photos on their walls; so, they are used to seeing things familiar to them. There is also the belief that art must be a prolonged commitment, something to be in their possession forever or to may one day sell at their parent’s estate sale. These conservative views create a paradox: people prefer to find something original and meaningful to them but at the same time are reluctant to make a huge investment. Cue: online art platforms must make discovery easy and art affordable.
Let’s extrapolate and say the average wall decor piece is $100 and the average original art piece sold online is $400. If people upgraded from posters to original art that would make the online art market a $120B industry (30b*(400/100)). Then, if we were to persuade the 80% of ‘empty wallers’ to buy some art, this would boost the art market to $600B (5x$120B). Now, I know not everyone is going to upgrade, nor are they going to fill their walls, but if say even half upgrade from prints to originals that is a $60B market. The same with our empty walled friends, if even half of them buy it would result in a $150B market. This art market is much larger than the estimated $3B standing it currently holds. The plan outlined above is similar to the much talked about ride-sharing market and how Lyft/Uber didn’t cannibalize the taxi industry but grew it (here is one such report).
Now let’s take a look at how we walk buyers through that journey and get them over the hump of buying art.
THE BUYER’S JOURNEY
The Hilcox report breaks down the buyer’s journey into six steps (AirBNB wrote a fascinating article on their user journey). However, I feel the report raised more questions than answers (or suggestions) on how to address it. Here I make two suggestions on how to improve each step of the journey and convert browsers into buyers.
The report states that word of mouth accounted for the way most people found art in 2016 (51%), social media was a close second (45%). The challenge here is that art is still something that not a lot of people talk about. If we depend only on word of mouth, in my opinion, that leads more buyers to IKEA and Crate & Barrel than it does to original art marketplaces.
Art to be part of everyday discussion. We need it to be fun and edgy. We need celebriti
Before the gramophone (in the 1880s) music was only heard by wealthy people, it wasn’t until the gramophone that music was brought into the average household, this was followed by the radio, and later MTV made music part of pop culture. We need art to become part of pop culture, but it has to start from the bottom up. Art needs to be made accessible both in awareness (advertising) as well as price. I realize this is easier said than done but it starts with fresh ads and a variety of price points (The report talks about ‘high quality’, the problem there is ‘high quality’ means expensive. We need to offer the best art at every price tier).
Poor incumbents at the top of search – If you search for art on Google, you often get art.com (poster shop), Fine Art America (prints on demand) and ugallery.com (outdated website and one specific style of original art) at the top. Kudos to them for having great SEO; however, I don’t think they represent the best the online art world has to offer. As a result, new shoppers first experience buying art online may not be the best, and they will likely generalize. To address this, other players in the space need to step up their game and improve SEO; one way to do this is to get more user generated content (i.e. more art, categorizing searches).
Hilcox’s report states that the biggest hurdle in the ‘Education’ phase is encouraging buyers to buy art without seeing it in-person. To make up for this, 79% of buyers rely on the online information provided by the artist and art piece they’re considering; still, 52% would like more content (i.e. video). In my opinion, this is where most online art platforms have done a poor job. Artsy has incredible content that makes high-end art more accessible in understanding; however, the average buyer still can’t afford it. No one has done an admirable job addressing the need for more information. To me, though, these issues are solvable using technology.
Video Video Video – I believe the solution is video. Look at how much video’s presence has increased in social media (Snapchat, Instagram, and Facebook listed video as a major objective in their annual developer conference). This is great for art which is both visual, and for which the story is critical; video enhances both of these. Artists should be encouraged to create video bios, do video tours of their studio, make videos describing a piece and showing it up close, in a different light and zooming in on it. I understand it won’t be the same as real life, but it will be a lot closer, and in the future, we’ll have VR which will be even closer to reality–if not better.
Create digestible, relatable content – art is intimidating for people, talking about it even more so. If you explain to the average person what the genre, medium, and movement is, they will have little idea what you’re talking about. If you find a way to present it so that they can both absorb the information and easily share it with others, then you win. I make an NYT vs. Skimm comparison. The NYT is long, in-depth, and requires some expertise, but the Skimm is to the point, punchy and memorable.
Of all the steps this is the one I found to be the least obvious, I felt like it could fit under Justification (the next step). The report mentions the importance of customer reviews (65% of people find them important). This feels like more of a justification, as I don’t think the ratings have to do with the art. I could see having ratings for things like delivery time, the accuracy of the image online vs the art in person, or professionalism, then again it is up to the platform to ensure that. I would ask for ratings but not necessarily show them, similar to how Uber or Lyft have ratings but don’t make them public. And then if an artist doesn’t get high enough ratings you ask them to leave the platform. This data-gathering/sharing between platforms is the 21st century / online equivalent to the conversations that takes place in a gallery but with much greater reach and insight. So let’s view this as the ‘connection’ phase.
Make dynamic descriptions to build a connection – Technology makes it easier to understand the tastes of a user, but with art, we need to create a connection. What if we changed the description of the piece to highlight the parts that would be most relevant or interesting to the browser. Say the artist is from the same hometown as the browser, we could customize an artist statement so that it opens with this fact. Or maybe we know the browser likes green so we highlight the different green elements in the painting. Or we recommend a piece inspired by the artist’s trip to Venice because we know–from the buyer’s Facebook profile–that they visited Venice recently. These elements accessible to us from data gathering allows us to give the buyer both a personal connection to each piece and talking points.
Create Social Proof – Social proof is 101 in selling. This could come across in a variety of ways: how many people are looking at certain pieces, where the artist ranks amongst other artists on the site (or in that style on the site), was a piece trending or added to a cart. Or, if possible, show buyers and browsers which of their friends like this artist, or style similar to the artist: “Your friend Dan bought an abstract piece similar to this one two months ago.” We can find simple ways to build social proof into the piece.
In this phase, the report says the top three hesitations are physical inspection, price transparency, human interaction. I believe this is the phase that as an industry we have done the poorest when it comes to being online. I think the report hits the nail on the head as to key reasons why people don’t buy art. However, there are no good suggestions and the industry hasn’t done much to experiment with potential solutions to address these concerns. I am biased, obviously, but I believe this is where Vango has at least experimented a lot to try to abate these issues (I’m not saying we have succeeded or nailed it, but we have tried and learned a lot).
Video, Augmented Reality (AR), Virgual Reality (VR) – Where video would help with awareness and discovery, it would also help with overcoming the hesitation of physical inspection. Another way to do this is by providing an AR feature that would enable buyers to see the art on their wall and from different angles. I think in the future, we will see VR come into play to help us overcome this. The challenge will be how do we get every piece of art from an emerging artist into VR.
Create a KLOUT score for artists – Pricing transparency is one of the key factors we have seriously looked into addressing at Vango. I believe it is the number one reason people do not buy art; they don’t know how much it ‘should’ be worth. By creating a score for an artist based on popularity, history, or the size of a piece, we could help ‘justify’ to the collector the value of the work based on objective factors (size, sales, purchases) and less so on subjective or intangible concepts like genre, medium, and movement. The challenge we’ve had at Vango is that this needs to be made bigger than just Vango; we need to take into account data from all of the artist’s channels.
Facts and returns, again the report comes up short here. I would suggest here you have a bot or phone number to talk to someone, creating FOMO as discussed in consideration phase and any other kind of social proof.
Price installments – It’s now easier than ever to have payment plans using companies like Affirm. Getting an interest payment plan for a year is as easy as putting in your credit card info. That makes purchasing a $500 art piece a lot more attainable for most people.
Try before you Buy – Vango always pitched the AR feature of seeing the art on your wall as a way to ‘try the painting on,’ albeit virtually, before you buy. Twyla took this a step further and lets buyers try an art piece for 30 days for $30. The genius of this concept is Twyla already has a 30-day free return plan. So, buyers pay up front but get their money back if they returned their purchase within the 30-day period. Now, Twyla is just making you pay for the purchase at the end of 30 days. And, as science tell us, once you have something you are less likely to return it; the longer you have it the less likely you are to return it.
Keep buyers updated on the artist they purchased from – “for example, it could include sending clients emails with regular updates about how the artist’s career develops (new exhibitions, critical reviews, prizes, and awards, etc.) or how the economic value of the artist has changed over time. This is a value-added service which would provide the buyer with potential cultural and economic gratification from the initial purchase.”
Offer Resale – Of course, we could all go onto eBay and resell something we don’t want, but by building it into your platform you strengthen the network effects, brand loyalty and the ease of doing it. It also makes it easier for the artist to track the movement of their piece, which they love, as well as for the buyer to see how the value of the piece has increased. Furthermore, I believe you could put resale under the justification/purchase stage as it decreases the feeling of permanence buyers feel (having to keep their art forever) which will increase their chance of selling in the short term. And it’s all about getting that first purchase!
While I may have been down on the reports suggestions and the pace of innovation within the space, I am hopeful that there are simple things we can do and experiment with to increase the likelihood of people purchasing art online. I hope this feedback provides actionable items to online platforms. And once you get someone to buy once, the data shows us that they will buy again.
Over the next four 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 Art Market Series 2017
- June 17 – Part II: Online Galleries need to wake up and innovate
- June 24 – Part III: Offline galleries began to move more online
- July 1 – Part IV: The (Forgotten) Artist Experience
- July 8 – Part V: The Future of Vango and the Online Art Space