Resources of galleries

Galleries that succeed in making these four points available to customers in the future will be able to serve the value proposition well and successfully differentiate themselves from their competitors.

In general, a brand can serve two tasks. The first function is the outside-in perspective: the perception of customers in relation to a gallery (Frazen & Moriarty, 2009). When a customer becomes part of a brand, it can be a form of self-expression or represent social status. Furthermore, a brand offers the customer a shortening of information processing when deciding for or against consumption. A strong brand has an influence on the choice of clients in favor for or against a gallery, as well as on the perception of the work of art presented (Colbert, 2003). Individual perception of a work of art depends on the environment in which it is exhibited (Pepperell, 2011).

The second function is the inside-out perspective. In this perspective, the owner can generate benefits out of its own brand (Riezebos & van der Grinten, 2011), as this helps the communication of galleries with their target audience. Indeed, a well-established brand positioning helps to promote a product or service to customers and thus convince people to buy it (Wood, 2000).

Different communication instruments can help a gallery to establish a strong brand (Meffert & Bruhn, 2006). As discussed in Chapter 3, the value of art is not clearly tangible. Therefore, communication tools for the product must be aimed at making value visible.

For most galleries, social and digital media have become standard practice, replacing in most cases any form of analogue communication and advertising. In particular, a visual medium like Instagram is well suited for showcasing visual art. The strong visual character of the medium makes it a perfect fit for the arts.

Digital and social media allow for enhanced engagement with consumers (Mangold &

Faulds, 2009), enabling a look into what is beyond physical gallery space and the interactions that take place there. It also goes beyond the simple sharing of information and promotions, as it allows a look behind the scenes of the world of art.

The same can be considered for the video platform YouTube.

This shows that the strategies of galleries in terms of advertising and communication have already changed. Technology is the tool that enables institutions to improve their communication and create new opportunities for their practices (Peterson &

Anand, 2004). In this respect, the distribution system of the market has changed in terms of communication, advertising and information availability under the influence of digital technology. The art market has shifted quite easily from analogue to digital forms of advertising and from personal interaction to more digital communication and interaction. However, it is very important for the galleries to send not only generic marketing material. Instead, they have to tailor the marketing messages and thus address the right customer with the corresponding value proposition (Resch, 2011).

Galleries should develop functional technologies for the management of customer relationship with a focus around obtaining the rewards of long-term profitability and consumer loyalty (Chen & Popovich, 2003). A personalized approach to each customer and a specific response to specific customer needs and desires is particularly important when it comes to highly priced art (i.e. over €5,000) (ibid.).

(2) Expansion of the customer group

Galleries compete strongly for existing customers (Resch, 2011). However, in order to be successful, a gallery should additionally address new customers along with existing customer groups and approach them with a respective value proposition.

Therefore, the gallery should concentrate on additional relevant customer groups that it wants to address in the digital space, along with its established consumers. This new customer group must be addressed with an individualized value proposition (Tomczak, 2007). Especially in the digital space, customers who do not have a close connection to art but have sufficient resources can be addressed in a broad spectrum. This is the largest group in terms of numbers and has the greatest potential (Colbert, 2003). Galleries should therefore focus on attracting these people from outside the market in order to win them as new customer segment (ibid.)

Younger customers in particular (between 25 and 35 years of age) can be easily addressed via digital networks. They are used to engaging online and are an essential part of the development of e-commerce (Lissitsa & Kol, 2016). This is an interesting group of customers, and although many of them have not yet reached full purchasing power, they have great potential in the future. This customer group forms an ideal target for businesses to be viewed, sell and promote goods and services through networks. Digital marketing is a tool that promotes the involvement of young people in consumption and personalization. This age group frequently consumes

behavior by adapting the value proposition (chapter 6.4.1). To build customer relations with a young potential customer group, it is, therefore, useful for galleries to introduce a more affordable line (chapter 6.4.4).

(3) Cooperation

Generally, collaboration plays an essential role in every business model. Hausmann (2009) identified a number of advantages that cooperation can generate in the art market: The realization of projects by bundling resources; synergies and reducing overlapping operations; an expansion of the value proposition and improvement of quality; the acquisition of new customers, brand and image transfer through cooperation between different sectors; and the expertise and exchange of know-how.

Overall, cooperation seems also to be an important element in the digitalization of business models. Galleries that invest their own resources in the digitalization of their business model consider cooperation with other galleries and service providers to be important for the future. The concept of a platform seems to become more and more important, particularly as networks can be expanded in this way. Gallery 2 intends to expand its own platform by adding new galleries and artists as partners. With these partnerships, the customer network is to be expanded. Gallery 3 has a partnership with an online gallery for sales of artworks in digital space. Gallery 4 is already represented on one of the major art platforms to expand its presence and network.

Furthermore, the gallery focuses on close cooperation with international artists.

Thereby, cooperation can exist in different sizes and formats:

1) The licensing of a suitable database for managing a gallery. This enables the management of contacts, inventory, sales and marketing, website integration, private views apps, and the management of online shops.

2) The distribution of a gallery’s artworks by an other gallery via its online platform.

3) The distribution of other galleries’ artworks by an online gallery via its platform.

4) The bundled presentation of galleries, artists, and events and information, and the sale of art via a platform. Examples of this collaboration are the Artsy and Arnet platforms.

4) The use of external experts who are familiar with digital tools such as Adobe Photoshop, programming or website design.

5) Shared social media accounts for galleries that have common denominators, such as a similar local presence or a specific art genre.