At Christie’s in Rockefeller Plaza, an 18 karat gold Hermès umbrella is up for auction. One bidder is seated in the audience with a paddle, another is phoning in from an undisclosed location, and a series of bidders identified by their state (Florida, California and Michigan in this case) are in competition to name the best price for the umbrella, upping each other’s bids at $200 increments.
After a few rounds, the Hermès piece, part of a “Living in Art” collection of collectibles including watches, clocks and jewelry, is sold. The hammer comes down at $2,200 and the umbrella goes to an online bidder in Florida, whose bid appeared in real time on a screen in front of the auctioneer in the room.
Online bids have become a source of growth for the company, which dates back to 1766 and has had a live online video channel for auctions since 2006. Between June 2015 and 2016, Christie’s e-commerce sales increased by 96 percent, with live and online sales reaching $100 million this year. The clients who bought through online sales increased by 60 percent in the same period.
It’s not just Christie’s: The centuries-old auction industry is seeing a worldwide democratization, as the formerly walled-off world, visible only to a privileged few, is transformed by accessibility and transparency online. The iPad has joined the paddle in auctions for items that can sell anywhere up to $180 million, according to Rob Weisberg, CEO of online auction platform Invaluable (formerly named Artifact) that works with auction houses to bring their auctions to live streams.
“When you think about how the industry has been, it was a pay-to-play marketplace, with everything behind a velvet rope,” said Weisberg, who was the CMO of Zipcar before joining Invaluable in 2013. “You had to be of a certain society, with certain connections and relationships, otherwise, you’d never get in. Now, people are being exposed like never before.”
“It’s the eBay mentality”
As consumer behavior changes, more bidders are comfortable competing for pricier pieces. Digital auctions open up the bidder pool to include those who are accessing the auction online and by phone. (Forty percent of Invaluable’s traffic comes from mobile.)
“As a New York-based auction house, we’re now serving international clientele,” said Alexandra Nelson, communications director at Swann Galleries. “We’ve had to respond to this shift. People are becoming more comfortable with the idea of bidding for something online. It’s the eBay mentality: People realize as they get more comfortable buying a $5,000 print online, that it’s addicting.”
A Christie’s Live auction.
Auction houses like Christie’s and Swann Galleries see eBay as an entry point for new bidders get their first taste of the auctions online, and then become more involved in the industry. For those who aren’t ready to bid yet, auctions can be “observed” online through the live stream.
“The democratization of information around this industry has made subcultures visible, and created value for things that previously didn’t have it,” said Jeremiah Rosen, partner and managing director at creative agency Reason2Be. “That leads to more people getting in on the auctions. You can easily see how transparency through technology has applied to auctions more than almost any other vertical.”
How online platforms help auction houses
Part of Invaluable’s appeal to its auction house partners is its online catalog business, which takes auction house catalogs — books that list all items available in upcoming auctions with photos, estimated value, background information and context — and makes them digital and searchable. It also sends out email alerts to its registered members when items relevant to their listed collections become available.
Invaluable charges auction houses a $550 fee to list its catalogue, as well as a commission fee of 5 percent in order to stream their auctions through Invaluable’s own video server. While the company doesn’t disclose current sales figures, Weisberg said that the company revenue is 10 times more than it was in 2012, when it brought in $48 million.
“We’re bringing in significant demand,” said Weisberg. “It’s in the auction house’s interest to drive up the bid price, and we have access to interested bidders.”
Other online auction companies work with curators to build independent collections and run digital auctions separate from auction houses’. Paddle8, whose goal is to help charities auction off items, recently merged with Auctionata to provide access to timed and live auctions outside of the charity circuit. Unlike Invaluable, Paddle8 and Auctionata don’t work directly with auction houses to drive in bidders.
“We coexist,” said Luisa Elster, Auctionata’s director of communications. “We serve a middle market, so we don’t see ourselves in direct competition with these centuries-old auction houses. Still, we’re an entry-point for new bidders.”
Nelson at Swann Galleries said that her team sees online as a gateway into the world of auctions. As younger bidders get involved in the industry and begin collecting, they’ll eventually build up a relationship with certain auction houses and continue business with them.
Not all auction house traditionalists are on board with the digitizing of the industry.
“People know they can bid online, but that doesn’t mean we push it,” said Nelson. “We do push our specialists to become more technologically savvy, but there’s some skepticism.”
Nelson said that face-to-face relationships with clients is valued above all, so when customers make bids without consulting the auction house, it feels disconnected. Still, she said that preference comes down to the individual level, and that the people resisting digital are in the minority.
“Online is where we see the next major boom of population coming into the industry,” said Rosen. “Millennials discover art online, and through social media, and they want to buy via that channel. A digital and mobile strategy is going to become imperative for that purchasing power.”