The world of high-end real estate sales, led by auction houses like Sotheby’s and Christie’s, has a long tradition of tactile components: the thick and shiny auction catalogs mailed to collectors around the world; the meticulously designed immersive exhibits that welcome thousands of visitors; paddles used to bid at live auctions.
But when Covid-19 surfaced in early 2020, some basic aspects of the business were forced to take a back seat. Closed auction rooms in all major cities. Travel restrictions have limited commercial flights, with specialist ground auction houses who can spend more than 150 days a year traveling to meet clients, inspect estates and conduct in-person assessments. Collectors crouched, fearing market volatility. Even popular sales catalogs were put on hold because employees were not in the office to physically mail them.
Could the industry survive its important spring season as a global health crisis rages on? The answer hinged on whether auction houses and collectors could switch to virtual rather than physical locations.
Video call ratings
Capturing a collector’s ethics and lifestyle and then translating it into a compelling story is the key to successfully marketing a high-end real estate sale. The process traditionally involves auction house specialists visiting properties and meeting with relatives or other estate representatives.
To prepare to sell the collection of the late Mario Buatta, for example, experts at Sotheby’s immersed themselves in the larger-than-life tastes of the famous interior designer while taking inventory in his Upper East apartment. Side and his Connecticut country house, Dennis Harrington, head of the New York auction house’s English and European furniture department, which oversaw the sale, said in an interview in April 2020. The properties included lacquered Gothic Revival furniture, English and Chinese export porcelain, and an extensive collection of ornate dog paintings.
A few months after the Buatta collection sold in January 2020, for $ 7.58 million, these in-person rituals were supplanted by video calls. FaceTime and Zoom do the job, but they can be frustrating to use because the sense of privacy is lost, experts say.
âWhen we engage with lawyers, surviving spouse, children, this time is so precious because that’s what we use to create a bespoke exhibit,â says Mari-Claudia JimÃ©nez, President, CEO and Global Head business development. , world fine art at Sotheby’s, which oversees real estate sales. “When those in-person visits aren’t happening … it gets a little more clinical, and it’s harder to really grasp the ethics of who the collector was.”
Interactive virtual exhibitions
Once the items are sorted, valued and labeled, they are normally displayed in museum-quality exhibits to attract potential buyers to visiting events before the auction begins.
Ahead of the record-breaking $ 835 million US sale of Peggy and David Rockefeller’s estate in 2018, employees designed and built a mock aviary to house the Rockefellers’ collection of porcelain bird and mouse figurines, with cries of ‘integrated birds specific to the actual species represented in the figurines, according to Liz Seigel, vice president and specialist in private and iconic collections. Nearby, a huge wicker picnic basket held a set of ornate silver cutlery and dishes, staged as if the Rockefellers could sit down for a meal al fresco at any time. The basket, a gift from the King of Morocco, sold for US $ 212,500. The New York exhibition attracted 30,000 visitors for 10 days.
Marketing strategies focused on what is tangible and ambitious typically get big budgets from auction houses, but over the past year employees have been rushing to translate these strategies – and move resources – into places. immersive digital formats that go beyond photo galleries. Multimedia elements once considered enjoyable, such as virtual tours of showrooms, interactive educational webinars, and video interviews with collectors, have become essential in capturing the imaginations of potential buyers sitting in their homes glued to their screens.
As part of a list of new digital offerings released last summer, Sotheby’s introduced an augmented reality feature in its app so people can see a piece of art on their wall before placing a bid. It also added a âBuy Nowâ Marketplace with artwork and items that can be purchased on demand.
Bidding from the sofa
As pandemic closures reverberated across continents, auction houses quickly moved to offer online sales only of small luxury items like watches, handbags, shoes and other luxury items. lifestyle, postponing many scheduled real estate sales linked to live events. The estate of oil heiress, rancher and Texas philanthropist Anne Marion, for example, has chosen to postpone the sale of her collection from 2020 until May 2021 due to market uncertainty from the pandemic, JimÃ©nez says. Christie’s has also postponed an auction of the estate of former Univision CEO and philanthropist A. Jerrold Perenchio, who died in 2017.
The rapid pivot helped auction houses stabilize the decline in sales in the second half of 2020. Live streaming has also become a more important tool, allowing auctioneers to conduct sales from showrooms. physical in real time as bidders call or place bids online.
And it’s not just the cheapest items that are generating interest. âWe have been amazed at the incredible adoption of our customers in this virtual world,â JimÃ©nez said. “They were quite comfortable buying paintings for $ 100 million over the phone, virtually, without having seen them.”
A growing number of people under the age of 40 have participated in all of Sotheby’s online sales over the past year; and in the majority of these sales, 40% of the participants are new customers, according to JimÃ©nez.
Christie’s launched its digital auction platform with the Elizabeth Taylor estate in 2011 and has offered numerous digital auctions since, but usually in tandem with a live auction. But the pandemic kicked off a curved ball that prompted the institution to “recalibrate” to meet customer needs when it couldn’t rely on its showrooms and print catalogs to market properties as it has. done in the past, says Gemma Sudlow, senior vice president, responsible for private and iconic collections and decorative arts.
A key turning point for Christie’s was in September 2020, when it offered a virtual-only version of the Perenchio collection, a traditional sole proprietorship. The multi-day auction was the first of a handful of real estate sales Christie’s has put online due to Covid-19, without a catalog or full-scale display. The result of $ 6.5 million was as expected if the Perenchio collection had been auctioned in the traditional way, Sudlow said.
As more people get vaccinated and some showrooms begin to reopen, Sudlow expects the industry to move towards an analog-to-digital hybrid, with online sales giving customers the opportunity to ” achieve comparable financial returns.
Of course, she says, “there will always be sales that we definitely recommend selling as a live auction, with physical exhibits, that’s not going to go away.”
This article appeared in the June 2021 issue of Penta magazine.