Online Sales and Business Model Innovation in Art Markets: A Case Study

Alexandra Fernandes and Luís U. Afonso
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Alexandra Fernandes: Instituto Universitário de Lisboa (ISCTE-IUL), Business Research Unit (BRU-IUL), Avenida das Forças Armadas, 1649-026 Lisboa, Portugal
Luís U. Afonso: Faculdade de Letras da Universidade de Lisboa, Alameda da Universidade, 1600-214 Lisboa, Portugal

Social Sciences, 2020, vol. 9, issue 2, 1-15

Abstract: Every year online sales represent a higher percentage of the sales total in nearly all sectors of the economy, and the art markets are no exception. However, there are few empirical studies showing how online sales and digital technologies are transforming the art markets at a micro-level. This study is based on the detailed examination of the financial performance of one of the two largest Portuguese auction houses, Cabral Moncada Leilões (CML), over a period of twelve years (2007–2018), complemented with interviews with its top-managers. It analyses a set of financial indicators (e.g., EBIT, ROA, EQUITY, sales volume, net results, etc.), along with some markers that are specific to the auction sector (e.g., average lot value, number of auctions per year, etc.). From this analysis it is possible to conclude that the deterioration of this company’s financial performance was the driving force that led it to explore the potential of digital economy. In the process, its business model changed dramatically, leading the company to a different market position and to the enlargement of its national and international customer base.

Keywords: online sales; online auctions; art markets; digital economy; financial performance; business model (search for similar items in EconPapers)
JEL-codes: A B N P Y80 Z00 (search for similar items in EconPapers)
Date: 2020
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