A new generation is flooding into auction houses, via their online portals and changing the way these companies operate. This information is carried in an authoritative report from Barnebys
, the worlds largest and fastest growing art and auction search engine that offers its service free to buyers and sellers.
Most Art Market reports look at the size of the global art market and prices achieved. Barnebys decided to focus on behavioral trends in online traffic why buyers and sellers are doing what they are doing and how auctioneers and dealers can harness that information.
The Report is based on a mix of survey material and measurable data direct from Barnebys own database with its 1.5m visits a month. This makes it unique, even against such publications as the highly respected TEFAF Report, because that is largely dependent on third party survey material.
Summary of Reports principal findings
Half of those who have bought at auction have only done so online.
Online auction buyers are more frequent buyers than those who buy at traditional auctions.
More than half of Barnebys traffic is from millennials (18-34 year olds) comes via mobile, yet many auctioneers websites are not mobile responsive.
Auctions are no longer the exclusive domain of the very rich. Massive growth expected at lower and middle section. The industry capitalizes on increased access & supply.
Consumers list the following reasons for buying at auction - better prices (value for money), unique items, quality, sustainability, excitement (of bidding at auction) and investment value.
The three most important factors to online bidders are ease of bidding, transparency of information and reliable fulfillment (transport and delivery). Navigation on site must be effortless and intuitive, as consumers are looking for convenience above everything.
Growing Eco-awareness among consumers. Sustainability trumps investment when it comes to the reason why consumers buy at auction, especially for younger buyers.
MILLENIAL PROFILE CHANGING THE NATURE OF THE AUCTION INDUSTRY
Millennial customers (18 to 34) are clearly an enormous commercial force to be reckoned with, commanding both trendsetting power and tremendous spending power as well. It is estimated theyll be spending $200 billion annually by 2017 and $10 trillion over their lifetimes as consumers, in the U.S. alone. (Forbes, 2015)
Theres no confusion in the market about the significance of Millennials. After all, they account for 24% of the U.S. population (77 million people), which is now a larger percentage than the historically dominant Baby Boomer generation, and command significant long-term spending prowess. (Nielsen, 2016)
Millennials stand to inherit $30 trillion worth of assets, transferring from the generation of Baby Boomers in the upcoming years. (Accenture)
There are roughly 80 million Millennials in the United States alone, and each year they spend approximately $600 billion. (Accenture)
While Millennials are already a potent force, they will truly come into their own by 2020, when we project their spending in the United States will grow to $1.4 trillion annually and represent 30 percent of total retail sales. (Accenture)
"It's (all about) the incredible spending they have, if you look at the U.S. they are the most important group in terms of the workforce and by 2018 they're going to overtake the boomers and by 2025 we're looking at over $8 trillion worth of annual net income. (Sarbjit Nahal, head of Thematic Investing at Bank of America Merrill Lynch, 2015)
"Success in marketing to U.S. Millennialsthe generation of people now 18 to 34 years oldwill be critical to companies across product and service categories. One reason, of course, is that Millennials represent the consumer market of the future. U.S. Millennials already account for an estimated $1.3 trillion in direct annual spending. This sum will grow dramatically, for only now are the first Millennials reaching peak buying power. In the U.S., by 2030, Millennials will likely outnumber baby boomers 78 million to 56 millionand they are forming lifelong shopping preferences and habits now. (BCG)
There are 80 million Millennials in the US, outnumbering 78 million Boomers, 65 million Gen X (Source US Bureau of Statistics 2014)
Millennials consumers are worth $1 trillion annually in the US and $10 trillion globally in 2015 (Total Youth Re search)
There are eighty million millennials in America alone and they represent about a fourth of the entire population, with $200 billion in annual buying power. They have a lot of influence over older generations and are trendsetters across all industries. (Forbes, 2015)
Their purchasing power will become increasingly important. Three-quarters of UK Millennials (75 per cent) earn under £50,000 per year; 78 per cent of older consumers do so as well. The important distinction here is that UK Millennial purchasing power will continue to increase in importance: The Research and Markets report stated that Millennials already accounted for nearly 10 per cent of disposable income for adults by 2007, when most Millennials were still teenagers. As Baby Boomers slow their spending, Millennials will become the primary engine of the UK consumer economy. (Aimia Institute)
In 2015 Millennials are making up a quarter of the UK population and they are predicted to hit the 17 million mark by 2019. [Inkling Millennial Report 2015]
While knowing what drives the current Grey Pound is useful in the short term, in the long term this generation will be replaced. Therefore, understanding Millennials with their digital lifestyles and new attitudes to spending will provide the key to retail spending over the longer term. (KPMG)
In the UK, 91% of Millennials own a smartphone, there is a stark contrast in the 65+ age group, where only 18% own a smartphone (Pew Research).
So the winners in the auction world are going to be those auction houses both online and with a physical presence who get their act together by building a trusted brand, delivering a great online experience, making access and transparency of pricing and procedures a priority and offer ease of delivery and payment.