by Sylvia Tiersten

Martin Lawrence Galleries’ home page of its web-site at www.martinlawrence.com, features a newly published image.

Online sales of consumer products and services will top $6 billion this year, according to the Gartner Group, a market research firm. Books, computers, and airline tickets are already a hit with Internet shoppers, but the jury is still out when it comes to artwork.

Amazon.com, the website that bills itself as “Earth's biggest bookstore,” is projecting $350 million in sales for 1998. Dell Computers sells $5 million worth of computers a day from its website. Many consumers prefer buying airline tickets with a mouse click to waiting on the phone line for “the next available operator.”

But art, which engages the visual and tactile senses in a way that paperback novels don’t, poses a different sort of challenge for online merchants.

“There is a dimension to art—even flat art—that typically is not captured in a low-resolution graphic,” says Randy Slavin, a principal at Masterpiece Publishing Inc., Laguna Beach, CA.

“The only way people will buy a $100,000 work of art based on a 72-bpi image is if they’re already familiar with that work.”

Emerald City Fine Art, a Seattle retailer, has sold an original Alexandra Nechita painting for $118,000 via its website. In similar fashion, Addi Galleries Inc., with retail galleries in Reno, NV; Las Vegas, Lake Tahoe, CA; San Francisco and Maui, sold a Bob Byerley original painting for over $100,000.

Meanwhile, most art dealers remain firmly planted on terra firma and have yet to establish an online presence for their business.

Electronic commerce, some dealers fear, will trigger a dangerous price war that threatens the existence of many reputable retailers.

When Masterpiece Publishing offered to create and host websites for retailers in its Premiere Gallery Program, the response from dealers was lukewarm at best. Only a few signed up for the value-added service, and some of them were downright resistant to the idea.

“Even in terms of point-of-sale and inventory, the art gallery market tends to be unsophisticated when it comes to technology, “ says Mr. Slavin. He reckons that most gallery owners “are not that familiar with the Web as a sales medium, either don’t use the Internet themselves or use it on a strictly limited basis, and don’t really understand how to make it a part of their business.”

As sellers of multiple works, some Masterpiece dealers worry about customers who might walk into a gallery, see a work that pleases them, and then search the Internet for a seller who’s offering the same piece for $40 less.

Mr. Slavin is not about to swear that their fears are unjustified. With interactive selling still in its infancy, it’s hard to say exactly what problems might arise.

“We do provide an exclusive territory for each of our Premiere customers,” Mr. Slavin explains. “We have the expectation that our galleries will continue to respect each other’s exclusive territories.”

But if Internet selling takes on the trappings of a Wild West free-for-all and erodes the concept of exclusivity, companies like Masterpiece will be forced to take a second look at their online strategies.

The scenario of a buyer who lives in Reno, vacations in New York, walks into a New York gallery that’s carrying the same product as a Reno gallery, and opts to buy in New York, is an old story in the art world.

So why does the Internet seem so threatening?

It’s the level of competition and potential for cutthroat price cutting that troubles Jacob Perkins, a salesperson at Vail Fine Art Gallery in Colorado. The gallery, which has its own website, views Internet selling as an experiment that may or may not work.

Selling multiples on the Net is “horrible,” says Mr. Perkins, because “if there are 250 in an edition, and people are shopping the Internet for a print, it’s hard to keep your prices where they should be.”

As if “dirt-cheap” sales weren’t bad enough, he worries about fraudulent dealings that will reflect badly on the art retailing sector. What is there to prevent the Internet trade in fake Dalis to unsuspecting customers, he wonders.

Online Auctions

Online auction sites are proliferating on the web, and some investment gurus envision auctions as “the next big thing on the Net.” Sotheby’s recently held its first online auction, which consisted of rare books and manuscripts. A first edition of Edgar Rice Burroughs’ Tarzan of the Apes fetched $80,000.

Several popular auction websites are up and running on a continuous basis and offer all manner of product—from computers to collectibles. Auction Universe, a network of online auction sites, enables subscribers to sign up for free and bid on original and limited edition artwork. Among its recent offerings was a commissioned gouache on canvas framed work by James Bachelor for a 1980 box cover of Lionel Trains, with an estimated value of $10,000.

Auction Universe recently hired Tim Luke as a collectibles and memorabilia specialist. He formerly served as the director of collectibles at Christie’s East in New York City.

The consumer auction forum eBay is one of the Internet’s top ten shopping spots. The site, which includes collectibles as a category, recently listed original paintings by Willem de Kooning with a starting price of $3,890.

Building Your Online Brand Name

Gone are the days when you could merely “build a website and they will come.” In 1994, when the World Wide Web was just getting started, Yahoo cofounder Jerry Yang could visit every site on the Web within a few hours. But that was before Web traffic exploded, and household names like Proctor & Gamble (P&G) began hawking their wares in cyberspace.

Yahoo, a search engine that helps people locate information on the Web, currently has more traffic than any other website. A search engine is a computer program that searches the Web for specified keywords and returns a list of web pages where the keywords were found.

A well-engineered website contains several well-chosen, strategically placed keywords that will enable the site to be “read” by several search engines. But with millions of commercial sites vying for the consumer’s attention, keywords and search engines no longer differentiate one art-related site from the others.

Type in the keyword “Andy Warhol,” for instance, and the search engine is apt to return over 200,000 “hits,” or web pages containing the name of that artist.

Building your brand on the Net, in other words, is becoming more difficult and more expensive. Consider P&G. Currently the retailing giant spends a paltry four-tenths of 1% of its $3 billion annual advertising budget on interactive media, including the Web. But five years from now, according to P&G guesstimates, up to 80% of its ad budget could be earmarked for interactive media.

Web marketing on a shoestring just isn’t an option any more, reckons Steven D. Addi, president of Addi Galleries and Addi Fine Art Publishing in Reno, NV. “A lot of artists and art retailers marketing themselves on the Internet are failing. Unless they are aggressively advertising their sites, which can be cost-prohibitive, most consumers will never find them,” he says.

Emerald City Fine Art receives fewer hits to its website than it previously did. “It’s a constant chore to keep your site visible, because there are so many of them out there,” says owner Robin Callahan.

To compensate for the increase in websites, he plans to pay for listings and links to his home page from other sites.

In an effort to market the arts industry, Mr. Addi has created the galleryrow.com website and enlisted Art & Antiques magazine as a corporate partner or sponsor. The site provides a directory and links to art-related companies, including galleries, art magazines, trade shows, artists and museums. Companies will be able to obtain a directory listing free of charge.

To build up consumer traffic on the site, galleryrow.com will use print and online advertising and marketing campaigns. Gallery Row’s management will pay for ad banners on other popular sites such as Yahoo. By clicking on these banners, consumers will “arrive” at galleryrow.com.

Neither the Addi Gallery site nor galleryrow.com has an online ordering system. For now, at least, Mr. Addi finds it difficult to envision a consumer ordering a pricey artwork over the Net by submitting an electronic order form and entering a personal credit card number.

However, some sites selling low-end art do offer an online electronic payment system. Waterman Surf Art Gallery, which previously occupied a retail storefront in Oceanside, CA, now exists solely on the Net. Using the site’s electronic order form, you can enter your credit card number and purchase open and limited edition prints. “Pipeline,” a 21- by 21-inch giclée by artist Glenn Gravett, sells for $350.

Prior to launching their online gallery last year, retailers Scott Eder and Marcia Pomerantz of The Art of Comics, in New York City, sold their wares at U.S. and foreign trade shows. Today their website at www.comicbookart.com averages 30,000 hits a month.

Thanks to the website, Mr. Eder says, he has been able to cut back from seven to three trade shows a year and eliminate mail order advertising.

Buyers—typically 25-to-35-year-old males—log onto the site to view some 250 pieces by 40 comic book artists. The secure site enables buyers to order online and pay with a credit card or, if they prefer, fax or phone in their orders. Prices range from $20 for Japanese animation cels, to $2,500 for an acrylic on paper Playboy Magazine cover by Kent Williams.

The Internet as Promotion Vehicle

Eric Dannemann, president of Chalk & Vermilion Fine Arts, Greenwich, CT, which purchased Martin Lawrence Galleries a year ago, sees the Internet very much as a promotion vehicle.

“It is a good way to introduce the company and its art and start a dialogue—and we get many, many hits on the site—so it is obviously working on a certain level.”

As far as sales go, Mr. Dannemann says they comprise mostly less expensive products such as books and posters. “As you get into the more expensive echelons of art, it is not advisable to buy, sight unseen,” he says.

When someone visiting the Martin Lawrence site—a site that has won a number of awards—and they show a serious interest in a piece of art, “it is always taken up person to person” by a gallery representative.

For Robin Callahan, owner of Emerald City Fine Art, the Internet is a tool for generating repeat business. “It’s about turning a first-time client into a regular client,” he says. “Out-of-town clients “can always walk into my gallery—at least on my website,” says Mr. Callahan. After holding a Royo show last September, he scanned all the images from the show onto his website.

The gallery wound up selling two Royo paintings for $40,000 each—to people who visited the website and were already familiar with the artist’s work.

These cyber-buyers “knew what they were looking for and knew the price was fair,” says Mr. Callahan, who likens Internet sales to selling artwork over the phone.

Emerald spends $150 a month maintaining its site and inputting new images and text, and $300 a year to keep the web pages up and running on a remote computer. The initial cost for site design was $1,600. Mr. Callahan reckons that the total investment of $3,000 for the site paid for itself in the first month of use.

Nowadays, he muses, many seniors cruise the Net. Otherwise, Mr. Callahan says, “they get their children or grandchildren to pull up the information for them.”

Sylvia Tiersten is a business writer based in San Diego, CA.