The art market shrank by 22% in 2020, down from $64.4 billion in sales in 2019 to $50.1 billion last year.
That drop, reported in economist Clare McAndrew’s “The Art Market 2021” report (published today by Art Basel and UBS), puts a figure on the enormous impact of COVID-19, which forced much of the art world to shift online-only almost exactly one year ago. The report also quantifies the art market’s digital pivot.
Online sales value doubled, from $6 billion in 2019 to $12.4 billion in 2020; they also more than doubled as a share of all sales by value, going from accounting for 9% of the overall art market in 2019 to a full quarter of all sales by value in 2020.
“I know it sounds terrible, but it was a positive finding for me that things didn’t go worse than they did,” McAndrew said, recalling that her special mid-year report found that gallery sales had dropped 36% in the first six months of 2020 compared to the same period in 2019.
“Galleries really did turn it around in the second half of the year. People realized they were going to be living with some of these issues for a longer period, and that they had to ramp it up in terms of their digital marketing and digital sales.”
The report notes that despite significant losses in sales and jobs—the number of people employed by galleries dropped by 5% in 2020, while auction houses’ employment dropped 2%—dealers remained relatively optimistic.
Only 20% of gallerists surveyed felt their businesses had performed poorly in 2020; 58% of dealers expected their sales to increase in 2021, while just 15% expected them to decrease.
Dealers’ ramping up of digital efforts like online viewing rooms was reflected in galleries’ expenditures.
Spending on IT rose significantly in 2020, while spending on art fairs dropped from accounting for 26% of galleries’ overall costs in 2019 to 16% in 2020.
Cutting expenditures, doubling down on digital outreach, and seeking loans or government support helped many dealers survive an exceptionally challenging year.
In all, 68% of dealers surveyed for McAndrew’s report said they’d accessed some kind of government loan or credit, and 48% said they’d received business loans.“The fact they could pull back all those expenses—like travel and fairs—was obviously huge,” McAndrew said.
“But it’s not just when we’re away, it’s when we’re here—entertaining people and having big openings and dinners and all these things that go along with running a gallery.
For smaller galleries, those expenses are quite substantial on top of travel and everything, and by cutting them back, they managed to either stabilize their position, or in some cases—not the majority by a longshot—did a little bit better than the year before.”