How Millennials and Gen Z Are Reshaping the Art Market

One of the big challenges for the art market is generational wealth shift. Depending on who you ask, anywhere from 83 to $165 trillion is going to shift from the generation who are now in their mid-50s to 70s, to the younger generation, to the millennials. They tend to see objects not as assets but as burdens, which is very difficult for an industry which is built around people not only buying enough work to fill their walls, but also to fill warehouses.

Historically, people whose grandparents collected old masters would also collect old masters. You know, perhaps more recently, people whose parents collected old masters would sell the old masters. And then buy contemporary art. Now you have a generation of people who simply don’t see the need to buy art, and that’s a problem.

It’s not just that they’re going to have the money, it’s also that they think differently about the world. They are the people who drive the experience economy. They are the people who are willing to invest a lot of money in experiences such as wellness, such as fitness. And so this is a big challenge for the art world now. How do you sell art to a generation of people who don’t necessarily want to own many objects? The gallery world right now is in a state of fairly existential crisis. Even very, very successful galleries are closing or struggling right now. Historically, you always had, let’s say, a dozen collectors that kept your gallery going, but they would change over time. And so this is absolutely something that every gallerist is thinking about. How do I bring in a new group of people to be patrons of my artists?

Historically, when people talk about the art market, they were basically talking about NATO, meaning Western Europe and North America. And in the last two decades, we’ve really seen a resurgent interest and activity from Latin America, from Asia, from the Middle East, from Africa, from Eastern Europe. Of course, it’s still centered in places like New York and London and Hong Kong.

But we do have great collectors, great artists, great galleries all over the world. You know, the art world is not immune from the influence of the digital. But as William Gibson once wrote, the future is here. It’s just unevenly distributed. And that’s very true for technology. Depending on where you look in the art world, you get a very different kind of impact of technology. The good side of it is, of course, that people are finding support for their practices all over the world. It used to be that a Latin American artist would sell to Latin American collectors, and if they happen to make something that Latin American collectors were not interested in, they couldn’t have a career. Now, you don’t even have to have a gallery in your home country.

Artists are using social media, especially Instagram, as a way to promote themselves before, they had to be mediated by galleries and PR people and journalists and so on and so forth. The bad side, perhaps, is this kind of trend towards a kind of internationalized, uniform taste. You go to the collections of young patrons anywhere in the world, and you see the same ten artists. At the other end, when it comes to the selling of artwork, the more unique the artwork is, the less technology has an impact. If an artwork is unique, people tend to want to see it, especially if it’s expensive. When they first sell the work of an artist to a collector, they want to meet them. On the one hand, you want to sell to people who you trust. On the other hand, you want to buy from people who you trust.

Almost exactly at the start of the century. People started thinking about art as an asset class, in the same way that stocks or bonds or real estate are asset classes. And they started pushing this asset class as something that people could invest in, and they pointed to a lot of data that showed that art had outperformed the stock market. That data is highly questionable if you look at it closely. But it was convincing enough that you at one point had dozens of art funds where people would invest. And there are two huge problems with this. One is that art is a bad investment. Art has a lot of carrying costs. Art is an unregulated market, so if you’re not an insider, you’re trading with asymmetric information. Art is a highly illiquid asset in the sense that there are moments when an artist’s market turns where you cannot sell the work. My fear is that over that quarter century, a lot of great potential patrons got scared off and decided that if they were going to be philanthropists, if they were going to support something, it wasn’t going to be this speculative game. It was going to be something like the environment or racial reparations or education. I can totally understand why someone who doesn’t know anything about culture and feels like if they’re trying to do something good for society, they should go and support the environment or go and support education.

How do you convince people to fill their lives with objects that need to be stored and restored? Part of that would be to transform the experience of buying and owning art, to make it a richer experience. Some galleries at the highest level have built a whole lifestyle around themselves. Hauser & Wirth, the originally Swiss gallery, has not only galleries all over the world, but also a hotel in Scotland. And soon in Saint Moritz. There’s a farmhouse in Somerset and they have an organic grocery store and a restaurant and a pub. And so, in essence, when you become part of their ecosystem, either as an artist or as a collector, it’s much more than a sales platform. It’s actually access to a whole series of elite experiences. The problem right now is not that you don’t have interesting artists.

Actually, there are more interesting artists than ever. Actually, there are more people interested in art than ever. And the question is just how do we build up the structures which allow these artists to continue creating? No one has really figured out how to replace person to person interaction. And even further down the chain, there still isn’t an Amazon or Net-A-Porter for art. You know you can do it with additions. You can do it with lower level artworks, but we’re still talking about a fair amount of money, even at the quote unquote, middle of the pyramid. I don’t believe in the notion of great art and bad art. I believe in art I think is great, and art, I think is bad.

And so the more voices are out there, the more possibilities there are for people to find art that they find great. My fear is that what we see right now, which is a consolidation in terms of what kinds of paintings are sold, how many galleries thrive, how many artists thrive, would continue. And so the market might stay the same, but it would benefit a much smaller number of people. And what happens then is that we get a much more boring art world, because the voices that are so exciting would be fewer.