While March 2020 will most likely be remembered as the month when Covid-19 started to seriously impact the auction business, it should also be remembered as the first month when combined Online sales at Christie's, Sotheby's and Phillips represented the majority of auctions arranged by the auction houses.
For years Christie's and Sotheby's had tried to introduce online auctions as an alternative to Live auctions. Despite their efforts though online auctions remained a marginal way to buy art especially when compared to the Live evening or day sales. Then the pandemic started...
1. Online auctions in March 2020 represented more than half of the total number of auctions arranged that month:
While this definitely was not the original plan, by the end of the month, 60% of auctions arranged by Christie's, Sotheby's and Phillips in March 2020 ended up being online.
For the past 2 years, the number of online auctions had grown significantly but what really allowed online auctions to become the main channel for sales in March 2020 was the closing of all auction houses' offices after March 19th, 2020 due to the Covid-19 pandemic.
As online became to only way to continue business, Sotheby's made the decision to convert most of its March live auctions into online auctions. While Christie's and Phillips made the decisions to postpone their Live sales, the move from Live to Online sales allowed Sotheby's to auction most of the lots it had catalogued for the month of March 2020.
2. Revenue from Online sales is however not yet to the scale of revenue generated by Day and Evening Live sales:
Despite representing the largest number of auctions arranged in March 2020, Online auctions did not provide the auction houses with the level of revenue Day and Evening Live auctions generate.
While there are additional reasons why the total revenue in March 2020 was dramatically less than the revenue generated in the previous years in March (see Pi-eX analysis of auctions' calendar), one of the key challenges for auction houses is that the average revenue generated by an Online auction is dramatically less than revenue generated by Live formats. In 2019, the average revenue generated by an online auction was 800K while a Live Day and a Live Evening auction generated respectively average revenues of $9 milion and $50 million.
This may change in the future but so far it is difficult to imagine a world where all auctions turn to online and generate enough revenue to sustain the auction business.
Learn more about March results at Christie's, Sotheby's and Phillips in Pi-eX Monthly Report: March 2020