Selling in times of uncertainty: Address the elephant in the room
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Whether or not you’re based in the United Kingdom, everyone is watching the unfolding spectacle following the Brexit vote. It’s triggered a stunning amount of political fall-out, a deterioration of the value of the pound sterling and an eye-watering increase in racial attacks, all in a matter of days.
What impact does – and will – all of this have on the lower end of the art market*?
Personal testimonies confirm that referendum result is already making an impact, which stands to be felt around the globe if it continues. One British collector who was most likely to make an acquisition sent the following message to a London-based gallery: “Think I’m going to have to sadly pass as with the EU vote it is going to impact my work, so think I sadly need to hold tight on spending until things sort themselves out in the markets.”
This sentiment is reminiscent of July 2008, when collectors started to pull out of art purchases because of uncertainty over the property market. Needless to say, when banks started to tank a couple of months later, there was a greater plunge downwards in art sales, swiftly followed by recession, both in the art market and elsewhere. However, it wasn’t all bad news. Some art still sold, and like in any downturn, new opportunities appeared.
Uncertain times call for differing strategies. For readers either based in the UK or with buyers based there, it could be worth your while to mention the elephant in the room. Rather than make follow-up calls, emails and messages without any mention of Brexit, consider referencing it before transitioning into the sales offer. It also serves as an ice breaker.
Better yet, you can turn an environment of uncertainty – known for having larger economic implications** – into selling opportunities. Mention how art is providing what the doctor ordered, by uplifting one’s spirit and brightening the environment (bearing in mind the work of art, of course). And if you’re selling art from the UK to collectors based elsewhere, it can be an opportunity for them to save $$$, thanks to the shockingly low value of the pound sterling***.
One thing is without doubt: in times of uncertainty, whenever and wherever they might be, it’s important that people keep spending. Freezing purchases, waiting until “things sort themselves out in the markets,” often only leads to worse economic times, which is what happened back in 2008/9. Rather than stand back and let that happen, continue to pursue sales, agree to follow-up with prospective buyers who get cold feet, develop new income streams if necessary, and keep spending (within reason and your budget), making an effort to support other local enterprises.
* According to writer James Tarmy in his Bloomberg piece, How Is the Art Market Really Doing? the lower to middle market is art valued under $100,000 USD (29 February 2016).
** Read analysts’ takes on what Brexit stands to do in economic terms in this piece by Jim Edwards in Business Insider UK: ANALYSTS: Brexit will bring recession… and contagion (27th June 2016).
*** A quick currency conversion check has shown that for an art acquisition worth £1,000, USA buyers will save $231 USD today versus one year ago. That’s equivalent to a 15% discount!
Further reading on the unfolding UK Brexit fall-out: This Completely Batshit Week in British Politics, Explained for Americans, by Luke Bailey & Tom Phillips for Buzzfeed (2 July 2016).----------
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