Art as an investment asset is a still relatively new concept. It seems to be a concept that wealthy Gen X and Millennials are willing to embrace. It’s hard to miss the media fed buzz about auction records or hear about art funds in the investment community. A recent article by Evan Beard and Ramsay H. Slugg published on wealthmanagement.com talks about a 2016 US Trust Study that found some interesting generational differences concerning the perception of art as an asset. Reading the article made me think that there could be some valuable lessons for art gallery businesses that are working with collectors of these generations.
The study by the US Trust surveyed wealthy individuals. It noted that motivation to acquire art has changed in the recent generations. Traditional collectors, from the Renaissance through to around the baby boomers were motivated by aspects such as prestige, aesthetic pleasure and elevated social status. This is of course still true today along with many other motivations to collect art. NextGen collectors are more likely to also be motivated by the expectations of financial benefits.
The article sites six cultural characteristics about these collectors. While the study focused on wealthy individuals, it’s worthwhile to keep in mind that young collectors without millions in assets may still be motivated by rising art values in the future.
Below I want to highlight a few of these characteristics that may be helpful to art dealers who have worked with or are trying to attract these young art collectors.
- An eye on investment: NextGen art collectors are significantly more financially driven to collect art. They are also more comfortable seeing it as part of their investment portfolio.
This is something to keep in mind when working with them. Find out if this is part of their motivation as you build a working relationship with them. You can share with them your gallery’s plans for advancing the artist’s and how values could increase with the artist’s achievements.
- Heightened expectations: Art is less of a risky investment to younger collectors because they have not been exposed to as many economic downturns as older generations.
This characteristic is an opportunity to educate less experienced collectors about how to identify and monitor artist’s with investment potential. Share with them the potential your gallery saw in this artist and how their work fits in with art market trends that are yielding high returns.
- More socially engaged: NextGen collectors are more socially engaged with the art world. They take advantage of all the new technologies that enable collecting art globally. In some respects they view collecting art as an expression of social and political advocacy.
Consider what technologies, i.e. social media, aggregate art sites and gallery ecommerce options you are offering these collectors. When talking about the artists in your gallery, explain which artists might share the collector’s social and political views and values. This will help the collector form a strong connection the work and the intentions of the artist. They can more easily become emotionally invested, thereby increasing their motivation to make a financial investment.
Historically art has not been viewed as an investment asset, but the NextGen collector’s perspective on building an art collection is more likely to include an investment aspect when making decisions on what to buy. Even if your art gallery does not represent blue chip artists, nurturing their education on how to identify artists with the great growth potential will go a long way in creating loyal gallery clients.