This document summarizes a study on the changing roles and business models of art and antique dealers. It finds that traditional retail galleries are in decline due to high costs and low foot traffic. Successful galleries now are international brands, small niche shops, or multi-service stores. Fairs remain important for sales and marketing but commercial fairs are undersubscribed. Online channels are now critical for many aspects of the business. Competition from auctions and other dealers has increased, requiring differentiation of services. Associations play key roles in lobbying, events, and accreditation but need stricter requirements and more collaboration.

2. • 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

3. A.BACKGROUND
B.BUSINESS MODELS
C.The MARKET and COMPETITION
D.BUYERS
E. ETHICS
F. ROLE of the ASSOCIATIONS

4. • 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

6. Time

7. Case by
Case Mix
Case by
Case Mix

8. 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

9. • 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

10. • Nearly all dealers have website and “conduct
business” online
• Online channel has been critical in:
 Searching for stock
Allowing buyer access
Communication and marketing
Low cost imaging and distribution
Sales to existing clients or trade
 Increased transparency (good and bad)

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

13. • 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

14. • 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

15. • 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

16. 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

18. 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

19. 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

20. Key roles are:
1. Lobbying government
2. 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

21. 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

22. www.artseconomics.com