Millennials are shacking the art market as they become the target demographic for auction houses and galleries
Posted on Aug - 07 - 2019
As the millennial market has gained greater purchasing power, art dealers and auctioneers are being forced to get creative to tap into this new demographic.
The results in auctions have shown the power of this new generation, did auction houses became hipper now, with half the buyers being under 40 years old? A recent article in Bloomberg marks the coming of age of a new generation of collectors, as millennials made headlines when they snagged $28 million work of art at a Sotheby's auction in Hong Kong.
courtesy: artnet news
As millennials are the largest generation in the world labor force, they offer a significant market potential for auction houses and art dealer. Not only that, as the Baby Boomers prepare to transfer their inheritance to their kids, this will be the most significant wealth transfers in history.
Therefore, there are a few strategies that art dealers and galleries have to consider when catering to the needs and wants of this burgeoning segment. One of them is finding the right price point. Although millennials are starting to make money, it is clear that the cost of living has gone up since the time of Baby Boomers. Some galleries and art dealers appear to agree that a good price point can be around $600, and sales are mostly found in three-digit sums.
Also, as millennials are 'high-spending and time-poor', major auction houses and even galleries have opted to concentrate their efforts on their online platforms. Sotheby's and Phillips both have expanded their online auctions, where most of the millennials are seen keen on buying their art, leading on the digital revolution that is influencing the art world.
However, as this new demographic becomes the norm and everyone is targeting it, it also presents some inconveniences for the smaller businesses. As the big auction houses are now targeting millennials and middle markets, offering lower-priced works in a digital environment, the smaller auction houses and galleries are being threatened and forced to remain competitive by other means. The results are that they end up merging with one another, as it is easier to compete when they become bigger.
As new business models and strategies are applied to address the rise of millennials that is changing the art market, it's up to auction houses and galleries to adapt to their needs or perish in the attempt.
By: Gabriela Martinez de la Hoz