Love them or hate them, non-fungible tokens (NFTs) have now carved their place in the art world sky and, with it, grabbed the headlines. But art in its traditional forms remains strong in the picture, as both digital and traditional art forms are now merging to reach wider audiences in digital marketplaces.
Sales of all types of NFT totaled $24.9 billion in 2021, up from $94.9 million in 2020, thanks to a massive surge in demand for collectibles such as limited edition sneakers, vintage whiskey , music and film memorabilia, music itself and so forth of it has been a boon to auctioneers. But last year, traditional art sales also hit a record $17.1 billion, up 60% from 2020 when the market was in its Covid-related doldrums.
For many, NFTs symbolize the digital revolution that is affecting the art market and is as staggering in nature as the technological changes of the Renaissance when printing presses came along. Yet as remarkable as NFTs are, the real digital revolution lies in how the asset has transformed the sale and reach of the art market to a truly global and connected audience.
NovaFori has experience in developing the traditional art market, having built a large scale online auction platform for Christie’s and subsequently supporting the sale of NFTs on the marketplace. The platform was developed with the vision of ensuring that online auctions mirror the behavior of physical auctions while enhancing the reputation for exceptional art, unparalleled service and expertise.
Ten years ago, NFTs had not yet been conceived, let alone born. It was traditional fine arts, antiques, photography, jewelry and so on that dominated the auctions. Back then, the new online auction platform offered well-designed, easy-to-use tools capable of handling large volumes of sales and end-users. The auction software could be integrated into the existing infrastructure and laid the foundation for future growth.
User-friendly functionality in digital auctions for mobile fuels
Over the past decade, technology has evolved along with the art and products auctioned on the platform. Traditional art remains central to auction houses in all its forms, while NFTs have created an additional line of business – one ideally suited to the digital auction format.
The role of digital marketplaces, including online auctions, has increased dramatically in recent years – especially during the pandemic – as companies increasingly recognize their benefits, particularly in the B2B space. Clear pricing, transparent inventory and seamless functionality on mobile devices with customer-friendly interfaces in multiple languages and taking into account geographic restrictions are all features that make such marketplaces a compelling proposition.
A milestone in the world of NFTs came in early 2021 when digital artist Beeple sold an NFT through Christie’s for $69 million, the third-highest sum ever paid for a living artist. Since then there have been many more such notable events – albeit not quite as expensive. Sales like this have opened the industry’s eyes to a new, growing demographic – younger people, for example, who may be more inclined to participate via mobile.
Auction houses rely on digitization
Indeed, the quest to attract a younger demographic has fueled the development of more sophisticated online solutions. According to Thierry Ehrmann, President of Artprice, 87% of the 6,300 auction houses that Artprice follows conduct online sales.
Their effect is already visible. Phillips achieved record sales of US$1.2 billion in 2021, of which 36% came from the Asian market. Elsewhere, Sotheby’s credits an “influx of younger, more tech-savvy collectors” for the highest sales figure in its 277-year history in 2021. Almost half of all bidders were newcomers. In fact, Millennials and Gen-Z are more likely to engage with the art market long-term if it meets their unwavering demand for high-quality digital experiences.
Digital marketplaces offer a level of transparency around the item for sale – provenance, characteristics, price, parties involved and more – to a degree that was not possible a decade ago. This has helped auction houses attract new demographics, increasing the number of lots sold worldwide in 2021 and bringing the unsold rate down to just 31%, down 9% from 2020 and 19% from 2019. All of this is part of a trend that’s good for all industry – artists, collectors and auction houses alike.
Photo above: © Artlyst 2022
Brittany Boles, Senior Sales & Business Development Executive, NovaFori