While art and antique dealers have been affected by lower prices, they are not the only ones who feel the pain. Price compression has affected everyone in the supply chain, from estate liquidators on down, but the local auctioneer is one of the more interesting cases. While it seems more correlation than causation that prices in the secondary art market plunged at the dawn of the information age, it does underline a key tension: what has happened to the estate auction?
Most auctions today tend to serve a function, which is to offer estate items and sell them to the highest bidder. Some of the well-situated auctioneers in wealthier areas still have the luxury of creating thematic, high-quality sales with the items they can source in their vicinity; for many, they must liquidate entire estates to either break even or fulfill their contractual requirements.
Between listing fees, overhead, and increasingly slim margins, it is becoming hard to actually profit from the auction method. With the increased competition of internet listings it has become harder to source good property, and even with access to a worldwide buyer base, the general trend for many categories of previously valuable items seems to plummet in inverse correlation to their page views. Emerging business models have found success replacing the expectation of high returns with something more akin to a liquidation service, starting every lot at $1 and focusing on their speed to market rather than price realized.
In the digital era, the glamour of the auction has faded. Yet, it seems the desire to purchase heritage pieces has not: even with falling prices, most decorative pieces have found homes through interior designers and other secondhand retailers. So what has shifted in the interim?
The local auction used to be a community affair, and was self-sustaining as such. Local auction houses used to have entire weeks based around auctions. The public would come to preview, items would be inspected, the aisles of auction items would be packed with perusers, usually locals, having the opportunity to convene around the items. Competitive bidding was visible on the floor, and items were often paid for and carted off immediately after the hammer fell.
Today, many of those things still happen: items are still cataloged, photographed, grouped and bound into an auction; showrooms are cleaned, vacuumed and rearranged with items in an appealing way; and auction previews and dates are set up and sent to the local public. However, the people have stayed home: unless you have a high-profile auction, the ease of bidding online outweighs the necessity of physically attending.
It could be argued that once auctions were posted online, the incentive for most buyers to physically attend was lost forever. So over time, as buyers became more accustomed to purchasing online and grew comfortable with inspecting an item only through pictures and descriptions rather than first-hand experience, the concept of attending an auction changed from a necessity to a novelty. Most auction-goers today are either nostalgic, or there for to professionally purchase for resale; perhaps it was simply physical proximity that made for a real and sustainable auction environment.
There is a case to be made for a return to a local auction, simply for the fact that they solve the biggest problem of the online auction era. Shipping and fulfillment are often the final nail in the coffin for posting a profit on an estate liquidation. The inclusion of a global buyer base may ultimately drive prices up, but unless you can get paid and ship those items with reasonable success, the effect is illusory.
Even if local auctioneers take their sales offline, it will take more than marketing and exposure to bring the crowds back. We need a new way of including and energizing the people who purchase from auctions, and a reason for them to coalesce. Nevertheless, the current method is not working. It seems time for a paradigm shift.