Why offer financing? The art of supporting online buyers.

As the art and online worlds interweave ever more, new trends in collecting art are bubbling to the surface. In the Online Art Collector Report 2019, a survey responded to by nearly 4,000 collectors, clear themes emerged around the importance of affordability and a desire for payment plans among the globe’s newer buyers.

If you don’t currently offer a payment plan such as AfterPay and Laybuy, the chances are you may be restricting your sales more dramatically than you realise.

By understanding the current whys and wants of online collectors, you can offer the elements needed to encourage this fresh wave of purchasing to flow in your direction.

Why we love to collect art online

Of course it’s not difficult to understand why one would willingly forgo the quiet intensity of a gallery for a familiar couch, cup of coffee and ability to get the cyber low down on a new favourite artist.

Nearly two-thirds of all collectors surveyed (64%) reported that they had purchased art online in the past, a figure on par with broader estimates of the penetration of e-commerce among internet users.  

Some art collectors have been in the market for over 20 years and have migrated a portion of their annual acquisitions to online channels — but the majority are much newer to the market. The great net provides a new accessibility that means anyone can dip a toe in collecting, without needing to brave an art auction or fair, or risk an awkward interaction in a gallery.

Collectors have said loud and clear that they prefer to shop online thanks to greater convenience, access to exclusive inventories and artworks that they can’t get elsewhere, avoidance of an “intimidating” art scene, availability of info and ease of research due to an artist’s online presence, competitive pricing and affordability. That word, affordability: a key feature of the survey findings.

How are the dollars being spent?

The majority of online art buyers spend under $5,000 on one to two pieces of art each year. 13% spend between $5,000 – $50,000 and 5% spend over $50,000 – $250,000. 

Of their annual art budget, 21% of collectors reported that they spend 75% or more online, while 15.3% reported spending 50 – 74% of their budget online. 

Despite most collector’s annual budgets remaining pretty even over the past 3 years, over 30% said that in the last year they had increased the share of that budget for online spending. 

Fresh collectors who began buying art in the last year were significantly more likely to say that they intend to buy more art online in the future, with 57% of those newest to the art market indicating that’s where their plans lay. Individuals buying art for 1–2 years also reported they were intending to spend more online. 

Although once thought impossible to shift the collectors of the art world to online purchasing, it seems undeniable a sea-change has begun.

For the love of art

So what is it that first ignites a sale? It’s heartening to know that even in this time of wild capitalism, falling in love with a piece of art is the most important driver for most collectors. Quite simply, an artwork’s aesthetic qualities, the story behind it and a feeling of being inspired by the piece all significantly outrank investment and socially motivated factors, such as which gallery is selling the work. Online buyers overwhelmingly purchase art they are passionate about and want to display at home. Of course once fallen in love with, that old dog affordability comes in. Not everything can be in reach to everyone, but there are ways we can make it easier for artworks to find their ways to the walls that love them. 

How to meet the needs of online collectors

More than any other factor, survey respondents cited lack of pricing information as holding them back from purchasing artworks. In interviews, collectors mentioned feeling discomfort at the prospect of asking for the price of a work that they could not afford—regardless of whether the interaction was in-person or online—and said they often opted not to ask at all, in order to avoid the potential embarrassment. The lack of clarity around price was the most frequently mentioned roadblock for collectors when trying to buy art. By providing accurate estimates and price comparisons, we can allow buyers to get comfortable stretching to purchase a work that may be at the edge of their budget. 

Among newer buyers, finding ways to afford the works they fall in love with is a primary concern. Newer collectors were more than twice as likely to mention affordability and the possibility of financing a work than other buyers with similar budgets who are older and have been collecting for longer periods of time. By answering the call for financing art purchases there is an opportunity to offer greater ease of affordability without compromising your value, and encourage purchases from this growing and passionate section of online collectors.

What’s on offer for art financing

There are two online financing companies we at Tanker recommend for our ambitious creatives; Laybuy and AfterPay. Below we lay out the differences.

Laybuy

• Customer payments are split into 6 simple automated payments, every 2 weeks.
• Once customer purchases product Laybuy will pay retailer the full amount, minus fees.
• Transactional rate depends on each retailer, but is normally around 4.75%. Laybuy takes on the risk of the payment. No other fees.
• Customer gets item straight away. Doesn’t have to wait to pay off full amount.
• Easy to use on mobile.
• Provide full instructions for merchants to install.
• No cancellation fees for the service.
• User has to create a Laybuy account with email address. Quick and easy to do.
• As an overall rule they can exclude specific products that you are selling, but look at it on a case by case basis.
• Offers reporting

AfterPay

• Customer payments are split into 4 simple automated payments, every 2 weeks.
• Once customer purchases product AfterPay will pay retailer the full amount, minus fees.
• Charge a fee of 4.75% + 30c per transactions. More than credit cards, but AfterPay take on the risk of the payment. No other fees.
• Customer gets item straight away. Doesn’t have to wait to pay off full amount.
• Easy to use on mobile.
• AfterPay help us go live on Woocommerce and via Vend POS.
• No cancellation fees.
• User has to create an Afterpay account with email address. Quick and easy to do.
• Waiting to hear if you can exclude specific products.
• Part of their marketing package is adding your business to their directory. This page receives 400K reviews a month.