Why it’s time for auction houses to start talking to each other

Rob Weisberg is the CEO of Invaluable, the online marketplace for auctions and galleries. Ahead of the first Global Auction House Summit, presented by Invaluable in Boston (6–8 September), he tells Apollo why it’s time auction houses started talking to one another.

Why is it so important to bring together auction house representatives now?

The art market, like the financial markets, is cyclical. It demonstrates very clear patterns, with two- to three-year cycles when the market’s up, as well as years when it’s down. You don’t need a PhD in art advising to understand that a soft art market represents a buying opportunity for collectors, as collections would be expected to appreciate in value alongside a market recovery.

As widely reported, the art market’s been in a down cycle since the summer of 2015 – but we’re beginning to see the signs of the next upswing. While this represents an ideal buying opportunity for collectors, it’s also a massive opportunity for those auction houses that are actively encouraging their consigners to fish while the fish are biting. We felt it was imperative to have our inaugural auction house summit now, to discuss the key opportunities and threats facing our industry, in light of this next upswing – and to maximise the opportunity for the industry.

Do auction houses need to talk to each other more than they have done in the past?

They absolutely need to talk to each other more. Auction houses have shared interests – I think that’s undeniable. Every auction house is looking to gain the best consignments, to extend its reach, to attract new prospective bidders and buyers, and to remain relevant to a changing consumer demographic.

With all that change, there’s certainly opportunity. There are also threats. Many auction houses have been successful in years past – swimming in their own pond, so to speak, in one geographic region. They spoke to a handful of key dealers in those regions, who were their primary buyers, and they communicated via paper catalogues. Now the world is really changing. Auction houses need to discuss their shared interests and challenges – not just to further their own businesses, but to further the collective interests of the industry.

What are the most pressing challenges facing the auction sector today?

Globalisation and digitisation. The auction buyers and collectors of tomorrow look absolutely nothing like their parents. The days of mailing paper catalogues to a small handful of dealers who are in the club are over. The days of personalised digital catalogues arriving at the speed of light on mobile devices in the hands of prospective buyers in 180 countries, written in their native language, supporting their local currency… those days are here today.

What do you see as the next key steps in the integration of digital technologies into auction houses?

I think auction houses first need a philosophical change. They need to look at the world as being different today than it was yesterday. Digital technology has already had an impact on virtually every other industry on the planet – and if anything, the auction market has been slow to adopt it. That philosophical change needs to be about prioritising technology not as an add-on, but as central to the core mission of the auction business.

That mission is relevancy, it’s access and it’s globalisation. If you have a consumer today who’s part of what I would call the on-demand generation – not 20-somethings, but 40- to 50-year-olds who have real disposable income – these folks grew up at a time where they were given the opportunity to transact on their own terms, buying things that they aspire to have in their collections, without having to meet somebody face to face. They can buy from the convenience of their home or office, or using their mobile device while sitting on the sideline of their kid’s soccer game.

The expectations and hurdles that the auction industry puts in front of prospective buyers are significant. It’s a very friction-filled process. [If] I want to bid at an auction, I generally have to submit a request for approval to bid in that auction, which I will first have learned of through a printed catalogue. I’m expected to peruse that catalogue, submit that RFA, sometime later get approved to bid, and then show up on auction day to raise the paddle. I’m sorry, but this generation of buyers is just not accustomed to or comfortable buying that way: if I can’t get the on-demand aspects, the immediate gratification of buying something that I want to acquire when I have the financial wherewithal to do so and the ability to do so on my terms and at my convenience, then I’m lost to that auction house.

Do you foresee major structural changes in the market, following Sotheby’s decision to scrap the buyer’s premium for online auctions?

Absolutely. I think that announcement is the single largest acknowledgment to date, at the pinnacle of our industry, that the world has changed. The quote that I saw from David Goodman at Sotheby’s, when he was pressed on the decision, was that the online channel represented a massive and cost-efficient means of customer acquisition, with new prospective buyers who had never done business with Sotheby’s before, but who were very likely not just to transact online but to maintain a relationship with Sotheby’s for the long term.

I think that the industry as a whole is going to have to move to pricing parity. Today, many auction houses charge online buyers an additional fee for the convenience of transacting online. There’s really no other industry that does that, and if anything, it restricts the auction industry’s growth, because you’re taking your core future demographic and disincentivising them from doing business with you.

What does this market need to become truly global?

I think we have to cater to the needs of global consumers in terms of languages and currencies. We have to meet them on their terms, not expect them to conform to ours.

Would you welcome any further regulation of auction businesses?

I don’t believe that auction houses require further regulation from the regulators. What I do believe is that auction houses need to self-regulate. If we fail to do that, I think the regulators will very understandably step into that vacuum of leadership. We’ve seen them do so recently with ivory, and we will see it again if we fail to take action.

As an industry group we need to raise issues that are potentially subject to regulation – from antique firearms to data protection – and we need to define our industry’s perspective on those issues clearly, to take a stand, and to act to further our interests and the interests of our buyers.