A Mid-Year Review 2021

Resilience in the Dealer Sector

A Mid-Year Review 2021

The art market has gone through a challenging and transformative period since early 2020, as the COVID-19 pandemic created new and unexpected demands for dealers. Along with the difficulties it presented, the crisis also created a window of opportunity for restructuring and innovation in the sector, as organizations were forced to look at new ways of operating, with procedures of the past becoming untenable and new methods and technologies required in order to survive.

Employment

The effects of the pandemic on employment was a major concern for businesses over the last year. However, there were promising signs that some of the job losses incurred during 2020 have been recouped in 2021, with the average number of those employed in the sector (seven) returning to 2019 levels after a dip in 2020.

23% of businesses downsized their workforce in 2020 as galleries were forced to lay off staff in response to the crisis, however, in the first half of 2021, the share of dealers hiring (25%) exceeded those losing staff (13%).

Change in Dealer Employment in 2019–2020 and 2020–H1 2021

Despite the crisis, the sector continued to support a majority of gender-balanced, knowledge-based, and highly skilled jobs in 2021. In the primary market, 52% of the businesses surveyed had a female founder, and women made up the majority of employees at partner level (61%) and 76% of sales and commercial directors. Almost 80% of those working in the sector have a university degree, with just over one third holding a postgraduate qualification.

Share of Employees with Third-Level Degrees in the Dealer Sector in H1 2021

In 2021, 52% of dealers reported having some employees working remotely, with 27% doing so occasionally and 25% more regularly. 54% of those businesses with remote work had introduced it in response to the COVID-19 pandemic.

Share of Businesses with Employees Engaged in Remote Work in the Dealer Sector in H1 2021

Sales

Just over half (51%) of dealers surveyed reported an increase in sales in 2021 versus the same period in 2020, 45% reported a decline, and the remaining 4% were stable.

The largest dealers, who had the greatest average decline in sales in 2020, saw the most improvement over 12 months, with a rise in sales averaging 21%. Those remaining under the most pressure were the smallest dealers (with sales of less than $250,000), where values were marginally below H1 2020, as well as mid-sized dealers in the $500,000 to $1 million segment where values were down 3%.

Average Change in Sales by Dealer Turnover Segment H1 2020 to H1 2021

In the first half of 2021, the artworld’s events calendar remained disrupted, with many art fairs still suspended. The share of sales made at fairs by dealers fell to just 7% at live events, or 11% including art fair online viewing rooms (OVRs).

Share of Dealer Sales by Value by Sales Channel H1 2021

The shift to online sales continued, with this channel accounting for 33% of sales (or 37% including art fair OVRs), with the largest share made via dealers’ own internal online channels (their websites and OVRs, social media channels, or via email).

Although still a minority share in the first half of 2021, online sales to new buyers expanded, accounting for 38% of all online sales by value. A further 25% were to existing clients that were buying online for the first time in 2021.

Share of Dealers’ Online Sales by Buyer Category in H1 2021

Collectors

High net worth (HNW) collectors have been critically important in helping the market endure a less severe contraction: despite the crisis in 2020, the median expenditure by collectors rose 10% year-on-year from 2019, and the first half of 2021 has seen a substantial further increase of 42% on average (to $242,000). The advance was driven by millennial collectors, who had the highest spending overall - more than three times the level of their older peers.

Median Value of HNW Collector Expenditure on Art and Antiques ($ Thousand)

Digital art was highlighted in 2021 with the growth of sales via non-fungible token (NFT) platforms. It remained a relatively small proportion of HNW individuaIs’ collections compared to traditional art forms, however, overall, 16% of the works they owned were digital, film, and video art, showing the growing significance of these mediums.

Collection Content: Share of Works Purchased by Medium

Paintings, sculptures, and works on paper accounted for 31% of the aggregate median expenditure by collectors in the first half of 2021, although digital art accounted for a significant 12%. Millennials had the highest level of spending in all categories, including an average of $20,000 so far this year on digital art. 48% of HNW collectors were also interested in buying digital artworks over the next 12 months.

HNW Collector Expenditure on Art by Medium in H1 2021

Female HNW collectors spent more than their male counterparts, with expenditure up one third on 2020 levels to $410,000, more than double the level of their male counterparts.

Median Expenditure 2019 to H1 2021 by Male vs. Female HNW Collectors ($ Thousands)

Dealers' Roles in Artist's Careers

Exhibition data from Wondeur AI on the careers of 2,700 top-tier contemporary artists showed the importance of commercial galleries in developing their careers. In the earliest emerging stage, commercial galleries accounted for an equal share of the number of exhibitions as nonprofit centers (at 36%). As their careers developed, museums played a larger role, however, even when artists reached the top 2% status, galleries still accounted for 26% of all exhibitions.

Share of the Number of Exhibitions by Institutions at Artists’ Career Stages

Dealers' Priorities

In the first half of 2021, the health and stability of their existing collector relationships remained a key priority for dealers, with the rapidly evolving area of online sales in second place. Although the market has not returned to its pre-pandemic schedule of events, art fairs have shifted back up into the top three priorities of collectors both in 2021 and for the next one to two years.

Dealers’ Top Priorities for their Businesses

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