• Study commissioned by CINOA to investigate changing roles and business models of art and antique dealers: historical, current and future perspectives

• Context: void of dealer research

• Method: qualitative, largely interview and survey based

• Progress to date:

⇒ Dealer interviews complete ⇒ Collector survey launched (ATG, Brandt, Art Newspaper)⇒ For publication September/ October 2010

A.BACKGROUNDB.BUSINESS MODELSC. The MARKET and COMPETITIOND.BUYERSE. ETHICSF. ROLE of the ASSOCIATIONS

• Dealers are old• Family businesses are important but diminishing• Dealers are well-educated, but not always in art• Scholarship and academia are becoming more

important, especially with growth of dealer services• Small businesses and tight cost control

Time

Case by Case Mix Case by

Case Mix

The traditional, shop front retail gallery is in decline:• High fixed costs• Low foot traffic • Event-driven market place• Moving online• Shift to services and away from stock

Gallery survivors:• International brands• Small one man shops with low rates and/or high traffic• Multi-service, one-stop, general cost-effective stores

• Fairs are integral part of dealer businesses• High expense but important for sales, marketing,

new clients• Important for collaboration and competition• Bell curve growth in popularity and quality over

time• Commercial fairs - undersubscribed versus dealer-

run fairs - oversubscribed

• Nearly all dealers have website and “conduct business” online

• Online channel has been critical in: Searching for stockAllowing buyer accessCommunication and marketing Low cost imaging and distributionSales to existing clients or trade Increased transparency (good and bad)

• Poor business planning• Difficulty accessing financing and credit• Regulatory issues- Export and import regulation- Droit de suite- Paperwork- Taxes- Employment related costs

• Two main areas of competition- supply and auctions

• SUPPLY- Difficulties in sourcing have grown since 1970s and more competition in sourcing than selling

• Dealers do collaborate to source and purchase works

• Artists are also new competitive force

• Shift in market power in 1980s• Auctions moved into retail and actively wooed clients• Auction houses in the money business and dealers in

the art business• Head to head competition has intensified over last 20

years but symbiotic relationship remains• Need for dealers to show recognizable value added

and differentiation of services

• Recourse and guarantees

• Specialist knowledge and expertise

• Discretion• Access and sourcing• Higher quality stock• More choice

• Better value (lower prices)

• Better/more services• Longevity• Advice, education, taste• Less stressful PoP• Trustworthy/ ethics• Privacy for sellers

Art Buyers have changed over time:• Geographically broader base• More varied motives – including investment• Wealth has become polarized• Some sectors aging out, others getting younger• Tastes changing • Corporates have dropped out, trade still important• Recession and buyer caution - especially middle market

Why and how they buy has changed:• From class to fun, nostalgia, heritage, buying green• Personal contact and online channels are key• Paradox of more information but less knowledge• Increasingly strict on condition• Require greater consumer protection in Europe

Unregulated market + large sums of money exchanged = ethical issues

• Lack of knowledge and professionalism• Lack of standards, qualifications, ethical enforcement• Authentification and valuation is not an exact science• Public criticism of colleagues – is collegiality dead in fight

for profit?• Association watch dogs but “anything goes” online• Ethics of auction peers can be even more questionable

Key roles are:1. Lobbying government2. Running fairs 3. Industry accreditation/ prestige

PLUS - legal assistance, networking, websites, education, media coverage, making art more accessible...

NB. It is not all one way - dealers need to contribute to associations to make them relevant

Key problems are:

1. Inadequate policing

2. No real teeth

3. Need stricter requirements on entry

4. Meet too infrequently

5. Relevance outside association and market

6. Need to collaborate more on research

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