The Next Generation of Art Collectors
Picking up from our exploration into the Insta-art world, we wanted to capture the closely related phenomenon of the millennial collector-- an audience and art market participant that AWI is very interested in. And we know it’s not just us; everyone is talking about the next generation of collectors and their active participation in the art world and art market. Numerous articles claim to have the secrets on how to grab their attention, how to cater to their interests and help them “discover” their tastes. Some would say that this news cycle happens every time a new generation turns over, and while part of that may be true, this time around it is distinctly different. This tech-savvy fast paced generation is unlike any other that has come before.
Personally, I’ve found myself in a little bit of a limbo being born in 1991— literally the proclaimed cutoff between the Y’s and the Z’s in the Millennial timeline. For your mass culture reference, that means that I was too old for Bieber and Gomez, too young for Spice Girls (not like that stopped me anyway), and an avid early career Britney and Christina fan—don’t even get me started on the boy bands. I adopted Facebook as a high schooler, not in college like the Y’s and in elementary school like the Z’s. And I am also still working through a master’s degree while my older counterparts are already successful professionals, VPs, Startup Founders, and “techsperts” that are just starting to reap the benefits of their hard work. And not necessarily by starting a family or buying their first home (Money Under 30 on why renting is better). It’s by making investments— including in art.
When people say that we are “tech-savvy”, it’s usually followed by a statement on how we’ve never known a world without the internet, which in part is mostly true. I believe that our generation not only lives in the digital world, but also lives to enjoy, explore and protect the natural one. But in terms of our ease with UIs (User Interfaces) at every corner, here’s the translation. This means that since youth, we’ve been developing an acute level of highly adaptable self-learning skills through constantly using these tools to make new associations for every area of our lives. For fitness and health, in science and mathematics, and especially in culture. Whether the superstars of my generation are interested in business, science, medicine, law or fill-in-the-blank, we are specialists first and foremost in the learning curve. And as Josh Bernin writes, “The Learning Curve is the Earning Curve.”
Millennials aren’t turning to art solely as an investment, but it’s becoming undeniable that this generation is much more aware of art’s power of gain and return than the previous generation was. In a six-minute read by Wealth, titled Art Collectors: The Next Generation, Mac MacLellan, executive VP of Northern Trust’s Wealth Management division puts forward a few insights on the collecting habits of the come-ups. They report that millennial collectors are looking to purchase rising star artists who they can still afford and whose works will accrue in value over time. Also, their fluidity in tech makes research a breeze if you know what you are looking for.
Okay, let’s take a break and look at market influence, impact and purchasing power. How do millennials stand within the active art market at large? Highlights from the 2019 Art Market Report by UBS and Dr. Clare McAndrew of Arts Economics, show millennials emerging as active market participants as number two out of five. Other key insights from this summary showed continued growth in online sales (as we expected), auction figures rising, art fairs continuing to add to the market, and the United States accounting for the lion’s share of sales by value at 44%.
The report itself continues to show an increasingly diverse collector base, and reveals an interesting profile of the millennial collector. An astounding 46% of collectors in Singapore and 39% of collectors in Hong Kong are millennials. We are absolutely seeing the economic growth of the last ten years coming into effect, as we know that Singapore and Hong Kong’s wealth has doubled during the last decade. The Asian region, including Asia-Pacific, China and India, now contain 36% of the world’s wealth, with the United States accounting for 31% and Europe standing at 27%. But the question still remains, why art? Why not other alternative assets or liquid trading?
The millennial interest in art as an investment, as reported by the 2018 survey on wealth and worth by the U.S. Trust, is that they are “twice as likely” to incorporate art into their strategy for wealth accrual. They’re not only counting on supporting and building for passion, but for the purposes of seeing those investments pay out. And in this case, it’s pretty likely that they’ll look to see that return, with 61% of millennial collectors saying that they’re “Very Likely” to sell. (A side-note to my fellow millennials, let’s not become the art flipping generation. A quick resell on the auction floor is not the same as a smart investment.)
It makes sense that millennials are interested in the combination of financial investment and a passion for social good, because they know that there is both. In this same survey, it was revealed that 87% of millennials take into consideration a company’s environmental and social responsibility when investing. This consideration for impact investing severely drops off as the survey accounts for previous generations. For more, check out this Artsy article, it breaks down some key elements from the survey and posits a slightly more commercial outlook on what’s to come. Even so, this doesn’t fully explain the heart of the question, “Why Art?”.
I believe the answer to “Why Art?” is that our generation takes agency in the cultural landscape—and this is further exemplified by our willingness to thrust ourselves into the digital world, make a brand, and contribute to the conversation of ‘what is now’. Millennials are not just purchasing art for passion and investment, but as an extension of their own personal tastes and brand. They’re also seeing younger major collectors pave the way and do it in style. Remember when famed collector and e-commerce billionaire Yusaku Maezawa posed with his newly purchased $110 million Basquiat on Instagram? (No? Read this Sotheby’s one-on-one).
It’s not just that we seek out art, take selfies with art and support the messages and concepts of artists, companies are also using art to court us. The industry of art collaborations and the influence that art has on mainstream culture has started to creep further out into the open and these markets are only poised to become more entwined. There have always been fashion brands that collaborate with artists, going back for decades. However, now we see artists are really becoming more like spokespersons for the brand in question. Off the top of my head, I can think of Murakami’s historical affilation with Louis Vuitton, Tracy Emin’s work with Longchamp, and oh, so many more. And it’s not all fashion forward, creating a BMW artcar almost looks like a rite of passage.
This commercial melting pot is certainly causing a stir within the industry. In Samantha Culp’s telling article published last October in The Atlantic, she details the risk-benefit gain for artists, consumers and corporations. There is a lot of potential, but not without the sell-out backlash. I’m clearly a fan of Artnet’s Opinion column, The Gray Market, and this article digs in deep. However controversial the relationship between the art world and corporate America becomes, taste and real-time reflection are always in style. I’m thinking about my editor’s personal favourite corporate commentary: the Michael Elmgreen and Ingar Dragset duo’s Prada Marfa.
As the worlds of art, luxury spending, and finance start to brush up against each other, it’s not such a big deal for millennials. In fact we’re used to mixing things together and approaching old contexts from new directions. Artists are natural spokespeople. They have an incredible ability to connect with so many through their visual expression. It’s no wonder that millennials are captivated by the cultural influence that artists possess, and no wonder we’re seeing this activity in the market.
It’s not only this generation that prides itself on being the best at everything and people are very impressed when you are an art collector. It means that you know how to game the system. It’s a highly competitive and skilled economy to be a part of and profit from. It means that you are also an avid admirer of elevated thought, that you are moved when someone asks you to reflect on the world around you. To have an active role in supporting our society’s art and culture is now the kind of privilege that old money used to be. This is what defines true collectors; they’ve become so well regarded in this sphere if they always purchase the best work, the highest quality piece that comes on the market by a particular artist. They don’t just love the art and have the money, they’re good at the market too.
This is a big move as the art world really starts to play around with the current disruptive technologies that have been influencing industries and business sectors for years now. At Art World Insights, we’re jumping ahead with the next advances in data and applying it within the immediate primary and secondary art market. We’ll be looking forward to providing data-driven results in a language that provides this next generation with all the information to aid their decision making; helping them to invest their money where it matters.