Coming back for its second edition, the 2019 Art Market Day welcomed 300 participants in the Grand Palais on the 18th of November. Orchestrated as usual by "Le Quotidien de l'Art", it was a great opportunity to meet key actors in the art world and to discuss the future of the art market.
The discussion was organised around 5 panels, each tackling different elements of the art market’s globalisation and its digitalisation in terms of channels and operations. Moreover, Paris’ place as the leading cultural capital in the world was evoked many times; Fréderic Jousset (Director of Beaux art magazine) even referred to the city of light as the “Art Silicon Valley”. Indeed, Convelio’s disruptive value proposition encourages art dealers to consider operations and technology as strategic pillars to stay competitive in a global market. Since Convelio was a partner of the event, our team had the opportunity to attend the conferences and to engage actively with the speakers. Below is a quick summary of what we heard and saw!
The first panel discussed the "Big Data Revolution" and the breadth of tools it provides to the art market. Changes in consumption habits, and more generally, changes in people’s behavior have an impact on the art market as well, especially for millennials who start their (art) purchasing journey online. In this context, how should galleries react? If your audience is online, no matter what you do, you must be online as well. Although these changes affected the art market later relative to other industries, the shift is now fully completed. According to Catawiki’s founder, approximately 50% of art sales are executed online. Trade digitalization has been leading to a diversification in consumer segmentation, greater competition, more accessibility and especially market globalization. Massive amounts of data have been generated as art market players develop their online presence, leading to the market’s complexification. However, it also represents an opportunity to segment the audience more precisely, to follow price shifts more accurately and to promote investment in art like financial assets. For instance, Sophie Neuendorf, VP strategic at Artnet founder, announced the release of a new solution that will process a tremendous amount of data in order to generate financial views on artists. Thanks to big data, Artnet wants to help investors detect and trade promising talents. Researching specific pieces online is also facilitated, since buyers can set alerts online in order to find what they are looking for, a behavior which helps BI professionals to identify what type of art is researched most frequently.
The digitalization of artistic creations also raises the question of authorship and forgery. Indeed, there are more and more pieces of art realized with AI and software which might be easily and extensively reproduced, as well as hard to authenticate. For this reason, artists and organizations are using blockchains to sign and set the history of a piece.
In another panel, the Italian art dealer, Michele Casamonti (Tornabuoni Gallery) and Touria El Glaoui (founder of 1-54 art fair) were invited to discuss the relocation of art market hubs in the context of Brexit. Both stated that tax policy will be key to determine the location where art trades will occur. Casamonti who owns galleries in Paris, London, Crans Montana and Milan explained he had to cut several exhibitions short due to the uncertainty of the situation; indeed, in his case, a tax change happening during an exhibition could result in the loss of millions of dollars. Besides that, he expressed the importance of short term versus long term strategic thinking on trade. Changes are happening so quickly that it is absolutely impossible to predict the place of London versus other hubs (i.e New York, Hong Kong..) over the next 3 to 5 years.
The discussions that followed, led by Cécile Verdier (President of Christie's), Nanne Dekking (CEO and Founder of Artory) and Rob Weisberg (CEO of Invaluable) tackled the question of market relocation, its viability and its sustainability. Cecile Verdier expressed that, despite globalization, each market has different rules and cultures that dictate the way that they buy and do business. In order to target a global market, you must be geographically present in each major region. Regarding viability and sustainability, no one seems worried; indeed participants were ascertaining that nothing was more resource-consuming that global art trades, art exhibitions, and art fairs. At Convelio we are looking to reduce the carbon footprint of our shipments and soon, our clients will be able to compensate for their transports when they order.
The next discussion reviewed the 5th European anti-money laundering directive (implemented in 2020) and its challenges for the market. The speakers discussed the identity control of buyers and how important it is to flag suspicious details during a trade. For instance, if the buyer pays more for an artwork, and then asks the art dealer to reimburse the difference, it is probably a strategy to launder money. Also, bank accounts geographical locations might be very telling: an offshore island, for instance, has to be flagged.
Eventually, Georgina Adams animated the panel regarding how galleries can get financing in order to grow and respond to the globalisation of the art market. Stéphane Mathelin Moreau (Senior Advisor, Neuflize OBC) and Sébastien Saunier (Business Credit Manager at IFCIC) were explaining what did they consider before lending money. They explained that a gallery’s professionalism, solvability and ability to support good artists were much more important than a business plan! On the other hand, the two art dealers interviewed, Eric Dereumaux and Christophe Gaillard (both co-director of Galerie RX) testified on how did they managed to grow in this context. Eric Dereumaux explained the importance of investing in other sectors (such as real estate) and to have associates who can support the costs of a gallery, while Christophe Gaillard explained that the help he got from private banks enabled him to grow substantially.
In the meantime, we had the opportunity to meet several startups who are leveraging technology to innovate and help the art market players to maintain their competitive edge and manage risk. Art Recognition, for instance, a young Belgian entity, developed an AI able to identify fakes and reproductions. Monart, also a young company, proposes a blockchain-based interface to create a collective art collection. Convelio was obviously the only one to approach digitalization within operations and disruption in logistics, a very concrete value proposition that greatly interested art dealers!
To conclude, Georgina Adams highlighted the importance of technology as a tool with which to sustain a business within art. She also expressed the importance of trust and transparency in data in order to make the market sustainable - a point that Convelio chose as a core element of its mission. Indeed, we make the shipping process transparent whilst providing our customers access to digital tools that can help them to choose tailored shipment options and track their valuables. Our goal is in a context of globalisation to build the backbone of the Art Market and to create an ecosystem that enables Art exchange all around the world!