While the coronavirus lockdown removed live auction bidding, many of the Australia and New Zealand auction houses have continued sales with online-only auctions, while others have closed their doors until the crisis passes.
Prior to the lockdown, there were three possible auction formats: live only, both live and online and online-only, with the latter being the only option available in Australia and New Zealand at the present time.
Online auction site invaluable.com has been the source of most of the growth in the popularity of the online method of auctioneering over the last 5 or so years. But conventional wisdom was that online-only auctions were a cost saving method of moving less expensive lots, or as an adjunct to a live auction, as another method of bidding for those unable or unwilling to attend, and desiring total control of their bidding.
After all, who would spend thousands of dollars without being able to physically inspect what they were intending to bid on.
Online-only auctions also eliminate telephone bidding to the rooms, the telephone being the source of a large proportion of the bids at a live auction, especially at the upper end of the market because of the anonymity it offers the bidder.
The Covid-19 lockdown has elevated the status of the online-only auction, as this is the only method by which an auction house can do business apart from private sales.
The last major art sale in Australia was the Deutscher & Hackett Important Australian Aboriginal Art, held on 18 March, on the cusp of the introduction of the restriction on live auctions. This sale was conducted with both live and online bidding, as with all of Deutscher & Hackett’s recent sales. The sense of foreboding within the population at the time resulted in lower room attendance, but the sale still raised a creditable $2.4 million (IBP).
The ban on live auctions has caused major disruption at all levels of the art and antique auction industry.
Three of the leading Australian art auction houses, Smith & Singer, Deutscher & Hackett and Menzies have postponed their next scheduled major sales, while the fourth, Bonhams has not yet announced a date for its first major art auction for 2020.
Some of Sydney and Melbourne’s auction houses, such as Lawsons, Theodore Bruce, Raffan Kelaher & Thomas and Leonard Joel have switched seamlessly across to online-only sales, not noticeably changing their regular weekly, special and on-location auction schedules. These businesses have been combining both formats for several years over all sales, so have sales histories to estimate likely results from online-only sales.
In Sydney, Shapiro Auctions had scheduled the live sale of The Contents of the Historic Homestead ‘Wollogorang’, Goulburn on 6 April, many weeks in advance of the lockdown, and for the auction to proceed had to make a quick decision as to what direction to take. The decision to move to the online-only format would not have disappointed the vendor or the auction house. From a low estimate total of $264,000 (which does not include buyer’s premium), the sale achieved $478,000 (IBP) with 81% of the lots sold by number.
In Melbourne, Leonard Joel had three auctions scheduled on April 6, 7 and 8 for their initial Design Icons Week series, again catalogued and advertised prior to the lockdown coming into effect, for both live bidding and online bidding. Again the three sales: Modern Design; Luxury and Prints and Multiples quickly became online-only sales with little notice.
Leonard Joel reported that the three sales sold 74% by number and “smashed all sales expectations” and that “online-only auctions, in this important period of social-distancing, are absolutely no barrier to the collecting community.”
Other mid-tier auction houses such as Philips Auctions and Aingers Auctions in Melbourne, and Vickers & Hoad in Sydney have closed for the duration of the ban on live auctions.
In New Zealand, Dunbar Sloane, Cordy’s and Art + Object have postponed all their sales while Webb’s, has been conducting auctions online-only and postponed their important Works of Art sale.
Auckland’s oldest auction house, International Art Centre is demonstrating that necessity is indeed the mother of invention. When New Zealand’s Prime Minister declared a level four lockdown on 26 March, “business as usual” abruptly ceased. They postponed their April Important & Rare auction, then began working with collectors with the aim of gathering a healthy offering of works, both contemporary and historical to be sold online-only.
Director Richard Thomson said they were careful to choose works that are in good condition with no surprises. ‘Condition was paramount’ Thomson said. The sale of 65 lots features familiar names and carefully curated works by artists such as Colin McCahon, Charles Blomfield, Michael Smither, Sydney Thompson, all stalwarts of the New Zealand art scene.
Prior to lockdown, the mooted live Important & Rare sale, with many key offerings was generating considerable interest in the New Zealand art market. When asked why they didn’t just proceed with that sale online, Richard Thomson, the company’s auctioneer said ‘it was not contractually viable for us to expect our vendors to accept that we would not hold a viewing or offer their works for sale in such an uncertain environment’.
Like some of the Australian auction houses using the Invaluable bidding platform, International Art Centre have agreed to absorb the usually additional 5% premium charged by Invaluable to make the change more palatable to buyers, and in addition is offering purchasers free door-to-door delivery when lockdown restrictions are lifted.
The title of International Art Centre’s forthcoming auction Art at Home could be applied to all forthcoming online-only sales as collectors and first time buyers make the most of their home space, with time to appreciate their surroundings.
Clearly, the changed conditions for auction houses are challenging, but can offer opportunities as well, even though traditional viewing in person is severely restricted, and bidding in the auction room is not possible for the time being.
It is those auction houses who already have a large percentage of online bidders on their books that are in the box seat, with buyers still ready and willing to spend, as is evident from the experiences of Leonard Joel and Davidson Auctions for example, as reported in AASD.
Olivia Fuller, head of art at Leonard Joel, told AASD that they will be using digital viewing options such as Facetime and Whatsapp to facilitate and enhance the viewing and buying for their clients now not able to look at artworks in person.
As we know, the main reasons for sales of art and collectables at auction are death, divorce, debt and possibly down-sizing, and none of these reasons are likely to abate, which means auctions are very much here to stay.
Therefore sellers and buyers will have to adapt to the changed circumstances. The auction house simply acts as a conduit between seller and buyer, much like it has since James Christie opened his eponymous auction house in December 1766 in London, and today, bidding online at auctions is an additional way of doing so.
Of course we have seen online bidding ventures come and go, like Auctionata for example. The auction platform Invaluable.com has managed to dominate the scene, now partnering with more than 4,000 premier auction houses worldwide, including Sotheby’s.
It had started out in 1989 as supplier of auction price data, and it wasn’t until 2009 that Invaluable launched its online bidding platform. The platform now boasts 58 million auction records with over US$204 billion in value.
Today however, all eyes are on the big end of town, and Invaluable surely want to capture the biggest prizes of all: the most valuable art sold at auction. To date, there has been some reticence from collectors, as Invaluable.com charge a flat 5% on all hammer prices achieved, (apart from the auctioneer’s buyer’s premium), which can lead up to a total of 30% on top of the hammer price.
On a $5,000 artwork, Invaluable adds a bearable $250 to the total, but on $500,000, a fee of $25,000 would be added by bidding through Invaluable. The services of art consultants and the auction house phone bidding services work out much more favourable for the buyers.
A tiered system of bidding fees from Invaluable would seem like the obvious solution to capture the big ticket art items. Whether this will eventuate, remains to be seen, as Invaluable may well hold out. Buyers may succumb in larger numbers in an environment where they cannot attend an auction in person.
One problem may be the slower pace of bidding, as experienced by auctioneer Andrew Shapiro in their last sale. He said: “With 716 online bidders, the sale ran smoothly, though at a much slower pace than if it were in the rooms. Instead of 80 to 100 lots an hour, we were at 30 to 50 lots an hour, as the internet was having to keep up with the incredible number of bidders.”
If Invaluable are able to capture the buyers at the highest levels, they will become an even more powerful player in the art world, as they will gain direct access to the world’s biggest art collectors – the holy grail of the artworld.
However, in the hope of live auctions again possible in the not too distant future, Deutscher + Hackett have moved their autumn sale to mid-June, and Menzies have postponed their end of May sale to a later date. Meanwhile perhaps as way to cut down the longer than usual wait for an auction proper, in recent weeks, we have seen the leading auction houses offering more paintings for private sale.
Article originally published in Australian Art Sales Digest on 11 April 2020