In 2020, there was a sizable shift in how art was viewed, exhibited, and purchased. Online exhibits and auctions increased by 255%, according to Art Tactic, a London-based research firm. Online-only sales reached $596.7 million USD in just the first eight months of 2020.
Today, the collectibles market online is still active and thriving. The move online has allowed buyers access to art and collectibles that fit their interests and budgets. Buyers are discovering new artists and collectibles via platforms like Instagram, TikTok, and other digital marketplaces.
Legacy institutions are also adapting to the demands of the art and collectibles consumers. Sotheby’s, Christie’s, Heritage Auctions and more are seeing plenty of business, and some are witnessing record-setting online sales, with Heritage Auctions alone grossing $1.9 billion in online sales in 2024.
There is another shift happening, as well. The buyer demographic is getting younger. At its first pop-up auction in Saudia Arabia, Sotheby’s reports that 30% of their bidders were under the age of 40. Christie’s has noticed and responded to the trend, as well: its “Gen One” auction of vintage computers, which appealed to the tech generation, drew $16 million in sales.
Trends in Collecting
The goods themselves are yet another change within the arts and collectibles market. The digitization of the discovery and sale of arts and collectibles means that buyers are driving an entirely new wave of collectibles – everything from designer handbags and comic books to Pokémon cards and sports memorabilia.
There is also a surge in demand for works costing less than $50,000, especially prints and editions. Likewise, there is an increase in the demand for alternative collectibles, and an interest in art that explores identity, justice, and transformation. Buyers are looking for meaningful items, not simply status pieces. Think Muhammad Ali’s boxing shorts at auction alongside a Louis XV cabinet.
More than ever, today’s collectors are driven by nostalgia, but also by how that piece reflects their identity, and the story behind it. For example, John Lennon’s sunglasses, which are expected to sell for an estimated $400,000, Pokémon master sets going for over $1 million USD, and items like Babe Ruth’s jersey coming in at $24 million USD are just some of the items that buyers are finding and purchasing online. The sports memorabilia market itself is forecast to reach $227 billion by 2032.
Buying online removes the ability to hold, inspect up close, and thoroughly evaluate pieces before a sale.
Technology Driven
Such activity signals a change in the mindset of today’s collector. There is a migration toward merging passions with investment. Fandom has driven a financialization of these passions.
Throughout it all, technology is driving this new ownership and investment strategy. Technology is enabling buyers in several ways:
- Fractional investing – enables a number of buyers to purchase a share of the same high-value item, such as a high-end designer bag or rare sneakers.
- NFT (non-fungible token) and blockchain – gives buyers verified, transparent proof of ownership and item provenance.
- Hybrid ownership – gives buyers both a NFT and an redeemable, physical item, such as a share in an Andy Warhol painting or a financial interest in a rare desk.
If there is a way to own, or partially own a collectible or art piece, there are buyers willing to invest.
Evolution of Protection
There are also new risks to consider. Buying online removes the ability to hold, inspect up close, and thoroughly evaluate pieces before a sale. As collections become more unique and varied, chasing provenance or authenticity can prove challenging. Items that look authentic may not be. For example, appraisers we talk with are seeing an influx of sports memorabilia forgeries on the market, such as signed T shirts from the 1970s that sell for $20,000 but do not bear the elements that would be present in an authentic shirt, such as the manufacturer, type of fabric, or even the marker ink. Likewise with handbags. There are small details, such as lettering on the bag, the brand of zipper used, or the bag measurements that are difficult to see even on close inspection.
For any collectible or artwork, conduct proper due diligence. While auction houses and their experts are diligent in verifying the authenticity of luxury bags and other collectibles, it is always wise for collectors to take the extra steps to make sure they are buying an authentic piece, particularly if the seller is not using an auction house. Research the provenance of the piece. Look online for how to authenticate the piece. Try to locate receipts, serial numbers, and other identifiers. For example, a sports jersey can be traced to the year of manufacture, the manufacturer, the materials used, and other identifiable information. Buyers can then match these details to the item that is for sale.
Along with one’s own due diligence, buyers should hire an advisor. Advisors are a worthwhile investment as they understand where to look to uncover the history of an item. For a small fee, buyers can get invaluable advice on their considered purchases. For items like designer bags, check with the manufacturer. Often, companies will have records of all the bags they have sold. Some bags come with a serial number that can make it simple to verify its authenticity.
Another way to protect investments is to review insurance options. AXA XL has specialized coverage for luxury collectibles. Our expert partners, like Winston Artory Group, can give an accurate valuation of hybrid assets with both digital and physical components. We can also review the various risks and coverage options available for those clients who are entering into fractional ownership or alternative asset markets.
Collections, like their buyers, have become part of a vast ecosystem that blends culture, technology, and capital. The future of collecting is digital, diverse, and deeply personal. Buyers are actively participating in the market, personalizing their collections and choices, and diversifying their portfolios in ways once unheard of.
For younger generations of collectors, art is not just something to own; it is something to experience, share, and invest in. As buyers expand their collections and the collectibles market, AXA XL will be there to help clients protect what matters most.
