Value proposition for customers

The value proposition for customers distinguishes a company from its competitors (Johnson et al., 2008). Thus, a gallery’s value proposition must be established on the needs and requests of the clienteles.

The main value proposition presented by galleries remains the same in the digital and physical spaces. The core benefit of any gallery is the curation of art, representing a benefit for all customers.

Additionally, galleries can provide augmented products, which are a means of product differentiation (Levitt, 1981). Augmented product tools may increase a customer’s dependency on the gallery and offer additional unexpected services.

Additional products provided by a gallery that enrich the customers' value proposition should include:

(1) Curation of art

(2) Building networks and platforms (3) Improving transparency

(4) Establishment of trust

(1) Curation of art

The aesthetic presentation of art serves as a foundation for inspiration, joy, decoration, investment, and discussion. This focus should be maintained in the digital world in order for galleries to be perceived as such, as opposed to a regular online shop. Therefore, it is important to adapt the business model around this focus area.

However, an extension of the concept of the curator for online art galleries seems necessary (Graham & Cook, 2010).

Furthermore, a gallery connects different stakeholders in the art world with each other. This seems particularly necessary when galleries enable interactive functions considered curatorial. The meaning of the term "curator" changes depending on the structure of the gallery database used. Basically, a database can have a closed or open architecture (Koren, et al., 2013). The former is of an educational nature, with pre-arranged and pre-organized information for the user. This architecture provides information and does not collect it. In contrast, an open database structure is

characterized by an access to the database where the user can adapt the information at any time and as often as he wants (Manovich, 2007). Most online galleries do not represent either of these extremes, but rather something in between (Graham &

Cook, 2010). The choice of database structure is related to the degree of curatorial freedom (ibid.). This implies that contributions from users can be as valuable as those of an established curator. Thus, both the gallery's curator and the user of an open database have the opportunity to modify information and change the public's perception of an artwork. Therefore, a gallery in the digital sphere must be very conscious of how far it wants to open its database and thus leave users to participate in the curation. The basic product expected from a gallery is served by the selling of physical products, which in the case of a gallery is the artwork itself.

(2) Building networks and platforms

An important service a gallery may offer to the artists it represents is to surround them with a community of collectors, curators, critics and art consultants. To achieve this, it is important to stimulate social interaction physically since personal interaction is not possible in the digital space (Velthuis, 2013). Furthermore, a gallery location is one where face-to-face interaction with consumers plays a key role (Arora &

Vermeylen, 2013). This is particularly due to the importance of building solid relationships of trust between market participants, as further described in point (4).

Even though most gallery managers are positive about digital tools and media, several argued that such tools could never replace the experience of art in real life.

The physical experience and interaction with art is therefore always going to play a key role in the sales of art (Horowitz, 2012).

If galleries no longer have their own physical spaces, personal interaction should by no means be left out. Instead, alternatives should be considered, such as presence at trade fairs or other events, in order to be able to interact personally with a network.

In general, the importance of social events, openings of exhibitions, special occasions, and art fairs is in maintaining or expanding the network of the gallery. On the other hand, it seems difficult to get people in physical galleries on a regular basis.

Therefore, the digital space represents the ideal counterpart to this, where people can easily access a gallery from anywhere (Horowitz, 2012).

With the Internet as an open-access network available for anyone to use, galleries should use digital tools to build a network around them. This can be done through an individual website, social media accounts, or even creating podcasts. This builds a new platform to communicate with a wider group (Mangold & Faulds, 2009). Often this comes in the form of information supply, with galleries filling their digital accounts with news about exhibitions, artists, and social events, aiming for some form of interaction in the digital environment rather than in the gallery itself. Here, actors can interact with each other. However, the galleries should restrict exactly how much freedom they want to give the actors on their accounts. The possibilities of digital space, co-creation, networking, and user-generated content could possibly threaten the foundations of the art world (Peacock, 2008).

(3) Improving transparency

Additionally, galleries should provide transparency for their customers. The traditional gallery practice is based on information asymmetry (Velthuis, 2005; Horowitz, 2012).

An important point for transparency in the art market is price development and presentation. However, contemporary art galleries tend to show only practical information and artists’ profiles on their websites. Typically, they shy away from sharing delicate information, like exact prices, estimated value, or whether a work is in high demand (Khaire, 2015). Price information is rarely published by established galleries and is usually limited to a small number of inexpensive works. They display this information in the context of their sales efforts. This shows that the exchange of information is more related to the commercial attitude of the established galleries.

Their business is based on this privileged information because it gives them a competitive advantage (Horowitz, 2012). Regarding the information asymmetry in the art market, there is in general unwillingness from the actors to share too much information online (Velthuis, 2005; Horowitz, 2012). However, galleries should consider the benefits of sharing the information online and giving open access to certain privileged information, such as prices. The relationships of a gallery with collectors and buyers are based on communication and trust. Trust can be enhanced in the digital sphere via transparency (see point 4).

Furthermore, the presentation of price information is helpful for viewing art as an investment (Gallery 2). The notion of art as an investment certainly does not exclude

its cultural and artistic value. However, it opens the art market to a wider circle of customers. In particular, inexperienced customers on the art market can be reached more often through the publishing of comparable information. In order to provide customers with greater value, galleries should think about providing transparent information about prices on their websites.

(4) Establishing trust

The galleries’ relationships with customers, artists and other actors are often built on mutual trust or partnerships. Personal contact is considered to be the most efficient way to do this, especially for emerging dealers (Plattner, 1996; Velthuis, 2013). This implicit rule, which is often shared among customers in the art world, also applies to the consolidation of the kind of artist-dealer relationship that must be equally based on trust. Trust and face-to-face communication are the pillars of the relationships that galleries have with their collectors. This is further emphasized due to the potential high risk of sharing high prices and unfamiliarity with the artworks involved. The digital environment does not yet allow for these relations to be fully established and maintained online (Arora & Vermeylen, 2013).

Regarding these problems, established galleries may have an advantage in online promotion and sale of artworks. When selling online, the representation of well-known artists and an established reputation as a gallery could help. This is because people are familiar with the artists and their work, as well as the brand image of the gallery. Therefore, there could be a higher level of trust in what is offered online.

However, with a younger gallery, without an established brand image and representing unknown artists, this could prove to be more difficult. The consumer might not be able to assess the quality of the art offered. This is in connection with the perception of a gallery as a brand (Velthuis, 2014). Galleries in the digital space need to build a strong brand in order to be successful, as one of the most important factors for a gallery’s success is to create a basis of trust for its clients. This is particularly due to the importance of building solid relationships of trust between the actors. A possibility for this is to highlight the reputation of the artist in a commercial sense (i.e. what price the works of the artists were sold for) as well as in an artistic sense. Moreover, galleries could argue the importance of esthetic judgment as an expert opinion of museum curators (Raymonde & Vale, 1995).

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.