This week, Phillips debuted a new business model that has the auction house, which was founded in 1796, reinventing itself for the 21st century. Most auction business concerns the resale of art that has been purchased by collectors at galleries. Phillip’s new offering Dropshop will sell editions direct from artists every month, each one positioned as a “drop” (familiar to collectors of streetwear), with the house collecting a fee. The first of these by CJ Hendry went on sale earlier this week and has already sold out.
Observer recently had a chance to catch up with Phillips’ Global Managing Director of 20th Century & Contemporary Art Amanda Lo Iacono to talk about Dropshop and the thinking that went into it.
Dropshop’s business model is pretty unique. How did it come about?
There has been a structural shift taking place in the market over the last decade that came into focus in the aftermath of the pandemic, around how we consume, engage with and ultimately acquire art. At the same time, the art world was experiencing both a generational shift and the emergence of various themes relating to identity, ownership and autonomy. Dropshop was conceived in recognition of these shifting market dynamics coupled with Phillips’ long-held tenet that collectors’ interests are not confined to category, genre or medium.
After having been a central player in the international auction market for two centuries, we looked to the future. In doing so, it became clear to us that in expanding our remit, we could play a meaningful role in facilitating a more direct connection between artist or maker and a global collector audience through collaborative partnerships. The Dropshop platform fosters a partnership between an auction house and an artist to bring brand new, limited edition works of art to collectors around the world—an industry first.
Who do you envisage as the target collector for these offerings? How old are they? Do they collect other art?
What’s so innovative about Dropshop is that each month will be dedicated to our partner-artist or collaborator, and the offering will span the breadth of Phillips category expertise including 20th-century and contemporary art, design and luxury. It’s this diversity, curated with the knowledge of what is driving collectors across these sectors, that we believe will appeal to the broadest swathe of the global collector community, from the seasoned to the curious.
At the same time, the collector landscape is shifting as we see increased engagement from the Millennial and Gen Z generations. In fact, this spring, these two generations made up 30 percent of Phillips’ bidders and buyers. We are looking closely at how they engage with and consume art and culture and are evolving in step with market demands. We see Dropshop as a key response to understanding this collector demographic, while also serving seasoned collectors. The accessibility of Dropshop through an eCommerce type “buy now” model, price point and curation makes it both a great place to find the cornerstones of a burgeoning collection and the coveted objects that compel a seasoned collector to remain devoted to the hunt.
There are many artists creating today who have communities of fans who aren’t in a position to spend a great deal on a unique work of art. Dropshop can remove that barrier to entry, and, in turn, is a place for all types of clients.
The objects sold on Dropshop straddle the worlds of art and design editions. How are you planning on determining their prices?
Every Drop is a true partnership between Phillips and our collaborator, and the pricing of works is a part of that process. From fabrication to sale, we will be working together to ensure that the Drop is responsive to collector interest along with that of the collaborator’s established community of fans. The goal is for the Dropshop price to be between $5,000 and $50,000, as we are really trying to keep the works here accessible and open to all.
It feels a little like you’re making physical NFTs. Is Dropbox informed by the boom times of that market?
NFTs were certainly a byproduct of that structural shift mentioned earlier. As with any disruptive market event, there were some key innovations that have kept a foothold. As an auction house whose core DNA can be found in the contemporary art market, what resonated with us was to find a way to institutionalize the artist resale royalty component that the NFT technology touted. With Dropshop we were thrilled to be the first auction house to bring a solution into the mainstream conversation. Our partnership with our collaborators does not end after the Drop. Any work sold on Dropshop that is subsequently reoffered in a Phillips auction will earn the artist a commission which enables them to participate in their secondary market success—which is incredibly exciting.
What made you want to work with Cj Hendry for your first drop?
Cj Hendry is a key example of that same generational shift whereby artists are compelling the art market to break down barriers to access. Cj has established herself as an artist celebrated by a loyal global fan base – and she has achieved this outside the confines of the traditional market construct. Dropshop is a platform to amplify the artist’s voice and broaden their accessibility to an ever-expanding collector base that continues to be driven by contemporary art and culture.
What are you looking for in future collaborators?
We’re open to a range of possibilities! We will be working with artists, from the established to the self-represented, with estates, as well as galleries, curators, culture-leaders, brands—the success of the concept will determine its evolution. Market demand will underpin every partnership, along with the recognition that Drops will appeal to an active collector base that is bigger than what either of us could achieve on our own or in another format.
James Tarmy at Bloomberg noted that Daniel Arsham and KAWS are already doing this through their own websites. Why should artists work with Phillips rather than go at it alone?
We see Dropshop as complementary to the other ways and means of accessing these creators and their works. We have a robust and vibrant community of collectors around the globe who will be engaging with the platform. And with so many in our network embracing cross-category collecting, it’s very likely that our Drops will yield new discoveries to someone who might have previously been less familiar with a specific artist or work. The discovery is much of the fun. The other compelling element of Dropshop is the resale royalty offering, which is an important step forward in the market.