Why Gen Z and Millennials are Leading the Art Market

Why Gen Z and Millennials are Leading the Art Market

Source: Medium.

With the advent of the Internet, the online sales market — which isn’t restricted to time and space — became the core component for the growth of the market.

Although offline sales have declined since the pandemic, the online sales market overall has visibly gained traction.

The online art market world saw rapid growth in 2020 with approximately 7.9 billion dollars in value and this has increased to 13.6 billion dollars in 2021.

Estimated value of the online art market worldwide 2013–2021, Published by Statista Research Department

According to a case study that focused on the online art market consumers’ behaviors, the percentage of those who have purchased artwork online has dramatically increased. In a survey from January 2022, 85 percent of the artwork consumers answered that they purchased online in the past 12 months, compared to 44 percent in 2019.

Another focal point is that those who are leading the market trends are comprised of Gen Z and millennials. Rather than investing in a risky housing market, these demographics are focusing on “art micro investment” by investing a small amount of money at a time and have expressed interest in participating in online art markets where they can quickly and conveniently purchase, sell, and find comparisons.

© Arts Economics (2022)

The percentage of those who are purchasing directly through a gallery has decreased from 57 percent in 2020, 44 percent in 2021, to 42 percent in 2022, while the percentage of those who answered they prefer online sales is at 37 percent, which is an increase of 8 percent from 2020 and 2 percent from 2021.

Especially Gen Z and millennial collectors preferred online purchases (average of 41 percent) compared to offline purchases (average of 33 percent) displaying further departures from earlier generations.

© Arts Economics (2022)

The art consumer purchasing trends differed by generation as well, but the majority invested less than 50K USD. This can be interpreted as consumers being willing to purchase an up-and-coming artist’s work at a lower price to consider it an investment asset. The purchasing intent has changed from that of previous generations. Those who are in their 20s and 30s and consider themselves to be collectors chose ‘emotional benefits’ above all other reasons for purchasing artwork. Instead of seeking out old masters’ art pieces for the namesake, they are more likely looking for artwork that resonates with their identity and values.

In conclusion, the emergence of easily accessible social media channels such as Instagram, and Online Viewing Rooms have been closely tied to Gen Z and Millennials’ tendencies and behaviors. In 2023, the online art market will provide opportunities for emerging artists and become part of the growing trend in investments.

The number of consumers who opt for offline purchases has increased towards the pandemic’s end. They have expressed that they prefer to purchase offline due to the price, trust in the seller, and the media. How can we transition those advantages to the online space?

If utilizing blockchain technology, an advanced database mechanism, that transparently shares all information within the business network, the consumers will no longer need to worry about trust during the transaction. The transaction itself will serve as a verification document for the artwork!

Art de Finance and its related institutions must continuously seek and accept digital innovations and infuse the advantages of both online and offline markets to attract various demographics of consumers.