Is D2C coming to the art market?

Preface

D2C - or direct to customer - is a development that is familiar from classic manufacturers.

Prominent are micro-brands such as manufacturers of travel bags or fashion, for example, who, bypassing a dealer network, build up a direct customer relationship and market it directly to these customers.

Classic manufacturers have also taken up this development and are trying different approaches to learn and benefit from it.

For traditional retail, this of course means that noticeable sales bypass retail - and that retail may also have to adapt profoundly to a world in which manufacturers can use digital means to reach their customers themselves.

So far so good…

What does that have to do with art now?

During our discussions at the INCorporating Art Fair Hamburg, we noticed some parallels to the art market that both artists and gelerists should keep an eye on.

Now, of course, you can say that the art market is a completely separate market for which its own laws also apply.

On the other hand, the path to digitization is lined with corpses from the market and companies who thought this way ...

What does a gallery do?

While I was strolling through the exhibition and talking to different artists, I kept asking the question: "What does a gallery actually do for an artist?"

The key message - with modifications - was always:

"The gallery has the network and the contacts to sell my art - if I had the contacts myself, I wouldn't need a gallery"

For the collector, a gallery is a kind of filter:

When I come into “my” gallery as a collector, then I know what to expect.

The gallery owner makes a selection based on their experience, taste and expectations.

These are the two core functions of many galleries today:

For the collector they are filters, for the artist they are reach.

What is the artist doing?

In one word:

Art.

And it was clear from our conversations that many artists would like it to stay that way.

For many artists, topics such as digital presence, social media, marketing and sales are much further away than brushes, saws or chisels.

But of course there are also established artists with a digital affinity, there are digital natives among the artists and there are even those whose children help with digital issues.

Yes and?

We can look a little into the future here - because we already know the developments in the manufacturer and microbrands market, as described above, and developments in the art market are now similar to those that became relevant for manufacturers a few years ago.

For the gallery owners, this seems to be a danger and a need for action, for the artists an opportunity.

For the artist

I don't want to go into the advantages of direct customer relationships, which have been discussed in detail in every d2c article in recent years.

Nevertheless, after Corona - with the closed galleries and the canceled trade fairs - the artists understood that a direct customer relationship is an advantage. And that digital topics can help here.

Corona was just as harrowing an experience for the artist as it was for those manufacturers whose business model was largely based on selling their products in shops and department stores.

This business model came to an abrupt stop in 2020 and those who could have oriented themselves digitally.

In addition, a direct customer connection would offer advantages in terms of communication and pricing and enable direct feedback.

The exciting thing is, of course, that there are tried and tested tools for all of this.

Microbrands have shown the way and there is nothing to prevent such tools and best practices from helping artists to achieve a successful direct-2-customer strategy.

In addition to all of this, the subject of NFTs gives the artist the chance to “extend” his art into the digital space, so to speak. Why all market participants should think about NFT.

For the gallery

For the gallery, of course, all of this is dangerous at first glance.

If a similar direct-2-customer development takes place in the art market, as in many other industries, the two above-mentioned added values that the gallery creates - filter for the customer and network for the artist - have become obsolete.

If a completely digital art market develops with NFTs in which hundreds of millions of euros are moved, then the gallery has to react to it.

So there are 3 options for the gallery:

  • "It won't happen like that"
  • "That may happen somehow, but does not affect me"
  • "I think of something to use this development for myself, my artists and my customers"

What now?

Now each gallery can decide which of the 3 possibilities it tends to.

From other industries, the company that chooses the 3rd variant is known to die less often than companies that favor one of the first two variants.

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