Going once, going twice… SOLD! Art auctions are synonymous with red velvet ropes, infamous auctioneer podiums, and gilded posh auction rooms full of beautiful artwork. Can this truly be a thing of the past? In recent years, technology has disrupted, and ultimately been incorporated into, the art auction business at Sotheby’s.
Painting a picture of Sotheby’s operations
Sotheby’s is one of the two largest premier auction houses in the world, rivaled only by Christie’s. Founded in London in 1744, it served as the hallmark of art auctions catered to the privileged class for the better part of three decades. To give a sense for how intertwined “tradition” is with Sotheby’s, just consider that Sotheby’s is the oldest company traded on the NYSE. Auctions are typically held twice a year, exclusively in New York, but buyers can be geographically located anywhere so long as an in-person representative is present in the room .
An example of traditional operations is:
- Send out personal invitations to “pre-screen” art pieces in-person prior to bidding (art gallery style)
- Hire an auctioneer to “perform” for the clients. Ultimately, the auctioneer plays a large part in the auction experience, functioning almost as a theatrical persuader to excite the audience and encourage competition
- Holding an in-person bidding lasting 1.5 hours in a Sotheby’s auction room where either the buyer or a buyer’s representative bids
Notably, this is how auctions have been held (with minor tweaks) for decades.
The Landscape: Bold Strokes on a White Canvas
With the advent of technology and the dominating presence of e-commerce, it was only a matter of time before online art auctions would catch on. Companies such as Paddle8, Artsy, and Auctionata have opened up the once cliquish art world to the masses and provided additional transparency on pricing. Just last year, online art auctions made up 6% of all art sales, which was a 32% increase from the previous year . No wonder it was only a matter of time before Sotheby’s jumped on the bandwagon. New initiatives by Sotheby’s in response to technology have risen rapidly since 2004 .
- MySotheby’s: This platform launched in 2004 and for the first time, offered buyers the opportunity to peruse the Sotheby’s website for new paintings prior to auction. No longer were in-person visits needed to get a real-time look at paintings up for grabs. The system allowed buyers to track lots and create “wishlists” for pieces. These lists were automatically updated as new works became available .
- BidNOW: In 2005, BidNOW was launched to allow bidders to bid in real-time while watching broadcast auctions (available through streaming). The BidNOW tool was essentially a way to connect the buyer to what was happening in the room via video. Thus, they could bid as they saw pieces they liked .
- Partnering with eBay: It was not until 2015 that a full digital platform for bidding, where both the auction and bidding took place online, was launched. Sotheby’s sought a partnership with eBay to develop the interface which allowed pieces to appear virtually on-screen and take bids. This movement to purely online was attractive to Sotheby’s since it required very little upfront costs; there was no production cost, no catalog cost, and no auctioneer to pay. Instead, the platform contained photographs, video / audio components. At first, only five auctions were held, but since then, the online auctions have become more frequent .Source:http://www.privateartinvestor.com/wp-content/uploads/sites/4/2015/03/Sothebys-and-ebay-.jpg
- Mobile App: Sotheby’s most recent technology is its mobile application. Not only does it offer the same things as what’s on MySotheby’s, but it also has a mechanism for people to leave absentee bids, view auction results in real-time, and search upcoming lots .
Framing the Future
As Sotheby’s continues to push forward, there remains a couple things that could be implemented:
- Virtual Reality headsets: This would be an innovative way to bring the traditional auction experience into the home of the online bidder. Instead of looking at pictures online, the bidder could use a Virtual Reality headset to observe pieces, walk around the room, and feel the space of the room. Thus, the buyer still gets the emotional and competitive experience of bidding without having to physically attend; such an experience usually leads to higher selling prices for artwork.
- Artificial Intelligence: Like IBM’s Watson, an artificial intelligence auctioneer could also disrupt the auction experience. Sotheby’s Watson could spew out painting facts and survey the room for probabilities for bids. It would know when to stop letting people bid. The publicity alone generated from it would be worthwhile.
Overall, while the traditional art auction will probably never go away completely, the world of art is slowly being digitalized. For such a historically unaltered operation, the last few years of technological advancement has jolted big change. Get onboard before it’s gone!
- Lauchlan, S. (2016, August 11). Sotheby’s bids on digital transformation. Retrieved November 18, 2016, from Digital enterprise in the real world, http://diginomica.com/2016/08/11/southebys-bids-on-digital-transformation/
- Economist, T. (2016, January 30). Going once, going twice, going online. Retrieved November 18, 2016, from http://www.economist.com/news/business/21689621-online-auctions-are-changing-art-market-not-yet-upending-it-going-once-going-twice
- Tully, K. (2013, August 28). Can Sotheby’s keep its edge? Forbes. Retrieved from http://www.forbes.com/sites/kathryntully/2013/08/28/can-sothebys-keep-its-edge/#37d082e14095
- (2016). How Sotheby’s and Christie’s rely on digital technology to meet market needs and attract new customers. Retrieved November 18, 2016, from http://www.widewalls.ch/sothebys-christies-digital-technology/
- Auction glossary of terms. (2016). Retrieved November 18, 2016, from http://www.sothebys.com/en/Glossary.html
- Reaney, P. (2015, March 17). EBay, Sotheby’s launch new online auctions platform. Retrieved November 18, 2016, from http://www.reuters.com/article/us-auctions-internet-idUSKBN0MD0BK20150317
- Villarreal, I. (1996). Sotheby’s launches App for iPhone and iPad. Retrieved November 18, 2016, from http://artdaily.com/news/41732/Sotheby-s-Launches-App-for-iPhone-and-iPad#.WC9OA_krJEYIn-line Citation:(Villarreal, 1996)