Say Hello To The Online Art Rental Market; Can It Make A Dent In A €50bn Industry?

A new generation of art lovers and buyers is emerging as having faced down economic meltdown, political insecurity,  a super competitive jobs market, and the hardship of getting onto the housing ladder, the offspring of the baby boomer generation are finally settling down, and thinking about what to hang on the walls of their homes and offices.

According to research from the Hiscox group about a quarter of all 20-30 year olds bought their first serious piece of artwork online. Around half of those who had bought said that they had spent more than 10k, and a quarter had spent in excess of £50k.

There is one problem, however; around 82% of respondents labelled not being able to physically inspect the art beforehand as the biggest obstacle to making a purchase. Could the solution be to rent it first?

This is what Scott Phillips and Marcos Steverlynck, the founders of Rise Art, believe. "We launched the Rental model to help customers feel comfortable about buying statement pieces for their home online" notes Phillips. "Art is a considered purchase. Seeing it in the flesh and in your home makes it easy to know if it’s something you really want to live with everyday".

Rise Art is a professionally curated ecommerce website where you can rent or buy works of art. The pieces for sale are chosen by experts (there is an approximately 3% acceptance rate), and the site itself has a range of special features: you can create your own art personality by completing an online survey, (I got “sophisticate”), browse through an impressive collection of over 3,000 works from 350 emerging and established artists, make outright purchases, or “try before you buy”, and have a piece delivered to your home and pay a monthly rental fee. Should you eventually choose to buy, 50% (plus 100% of the first month) of the rent you’ve already paid is deducted from the final asking price.

Rise Art is expanding its offering to include Corporate Services, renting out works of art from famous names such as David Hockney to offices, from top city law firms to bootstrapping start-ups. Rental can be anything from double figures to four figures per month depending on the work or works requested and the length of contract agreed.

There has been a lot of research into the difference an inspiring workplace can have on employee productivity; a recent study by the Cass Business School in London showed 80% of those questioned felt that art in the workplace improved their sense of well-being, whilst 64% agreed that it made them feel more motivated.

Google are fans; “We really needed something to inspire creativity in our room for video creators. The selection from Rise Art was the perfect choice for us, and the reaction has been great from our creator community”, says Marc Joynes at YouTube. The corporate art market in the UK has been estimated to be around £204m, which struck me as smaller than you might think; the UK has recently finished building 6.6m sq. ft. of new office space, and the refurbishment and fit-out market in the UK, where Rise Art expect to be active, was estimated to be worth £7.1bn in 2013, expecting 2-3% annual growth. a gap in the market perhaps?

Rise Art is supported by a network of art insiders who personally curate the art which is featured on the site. Noted art collector Chris Ingram and media consultant Anthony Fawcett are both insiders, as are publisher Kathryn Roberts, anthropologist Julie Taylor and Annalien Bruins, COO and Senior Art Advisor at Tang International Investments.

I spoke with Meelimari Arro, who joined Rise Art last September from Rocket Internet Group as Marketing Manager. Meelimari pointed out that currently furniture giant IKEA sells more art globally than anybody else, which, and no disrespect to IKEA, here, suggests that RiseArt can gain access to a sizeable market. Aspirational 25-35 year olds interested in furnishing their homes with objects of beauty but preferring to “try before they buy”, with slightly more emphasis on female buyers than male, represent the target market, as well as corporates looking to wow clients and get the best out of their employees.

“Given that artwork can increase productivity, it makes financial sense too”, Meelimari explains. Managers are increasingly looking for ways to keep their star performers happy in order to gain an emotional, financial and competitive advantage over their rivals. Aracelli Camargo, a renowned cognitive neuroscientist, suggests this is the role that office art can play:

An enriched environment improves performance in hippocampus-dependent learning tasks such as problem solving, idea generation, cognitive flexibility and therefore our innovation potential. In the context of working spaces, we should apply this knowledge to create environments that are stimulating and neurologically nourishing. A constantly changing gallery creates a more visually interesting space, making it more neurologically stimulating. The key is to use art to keep constant change in the space, so people feel that a space is alive and evolving. Any space without change can become un-stimulating with time.

It's certainly easy to buy or rent the works; the website is expertly laid out, similar to an Amazon or EBay, but, as you might expect from a site which sells good quality, limited edition artwork, more aesthetically pleasing, and a lot more personalised. You can chat online to a specialist art advisor or arrange for a consultant to visit your offices, and there is also a Facebook style newsfeed where artists can interact with one another or with potential buyers. Nothing has been left to chance.

It's not hard to see Rise Art’s model catching on; the company takes a 15-40% cut of sales which compares favourably with buying direct from a gallery, and there is also an option to have the works framed which, when bundled up with the work itself, seems like a no brainer and represents a useful additional revenue stream.

There is competition in the online space. Amazon art, for example, Auctionata, or Artsy, but few, somewhat surprisingly, offer the option to rent works first and see if you like them. New Art Online is the only other example I could find. Meelimari told me that 80% of those who rent end up purchasing the works, which adds further credence to the business model. Kudos to RiseArt for apparently securing a significant first mover advantage, rubber stamped by dominance of search engine results.

In the final reckoning it's likely that the company that wins the greatest share of the market will be the one that is most responsive to client’s needs, most prominently advertised and, of course, sources the best works of art and matches them to customers as quickly and accurately as possible. Rise Art partners with more than 20 galleries and currently their corporate brochure contains intriguing works from modern artists such as Gina Parr, Victoria Horkan and Eelco Maan; prints, photographs, and even sculptures and canvases for exhibition spaces are available. Overall the emphasis seems to be on modern and emerging artists.

The Company does not need to pay out excessively for storage either as artists are allowed to keep hold of their works until they are rented or purchased; it also helps that Rise Art’s staff are art lovers themselves, meaning they maintain good relationships and a mutually beneficial working relationship with their stable of artists, although founder Scott Phillips reveals that his interest in art stems from being “dragged” around galleries by his wife, an artist herself. Like Phillips, co-founder Marcos Steverlynck, who previously worked for Google as Head of European partnerships for the Android operating system, is a tech enthusiast turned aspiring art collector.

The online art business is unlike any other market in the process of being disrupted, digitalised and curated online because of its history, tradition, personalities and unpredictability. Who knows what price a work might fetch this time next year? Rise Art brings much needed liquidity to the market. The online market share will surely grow as predicted, but will it be enough to secure the margins Rise Art needs to keep its artists and its customers satisfied?

The idea is a strong one, there is product market fit and a new generation of interested customers. Don’t expect the art world to be turned on its head, however; this is a people industry and the success of a company such as Rise Art is ultimately likely to come down to the strength of interpersonal relationships the marketing team can build with key personnel. This product won’t necessarily sell itself, and to date there is not a great deal of sales data to go on.

Rise Art will need to be on their game to make their “suck it and see” model work. Don’t bet against them pulling it off. They have completed one small fundraising and another, larger round appears likely. The more backers, particularly those, like their network of “insiders”, with strong connections in the art world, should tip the balance firmly in their favour.