Value proposition for customers

the conclusion that the disruption of digitalization is beginning at the low end of the online art market (Christensen et al., 2015).

conversation. Gallery 2, which is a gallery operating exclusively online, has highlighted this as precisely its biggest problem: the lack of brick-and-mortar space makes it difficult for them to establish personal contact with their customers. To overcome this problem, the gallery tries to facilitate personal contact to customers through events such as art fairs. The other four galleries argued that they do not see a future in purely digital spaces, where personal contact with and between clients are not enabled.

However, the digital space also enables an extended value proposition for customers, as four of the interview partners stated. Digitalization allows both an expansion of the customer group and extended communication with customers through digital tools.

For the purpose of a growing customer group, it is necessary to precisely define the customer groups to be addressed. For example, gallery 4 has a customer base that is between 25 and 75 years old. However, there are very few young buyers. The older collectors visit the gallery more often and also buy significantly more works of art. In order to offer younger customers a more suitable art segment, the gallery is therefore planning an online shop with artworks at a lower price range (under

€5,000). By shifting the sale into the digital space, the gallery opens up new ways of approaching its customers and can expand its target customer group. In this way, gallery 4 explicitly responds to the different purchasing behaviors of the different customer groups in order to offer an increased value proposition. Furthermore, the gallery focuses on serving younger potential collectors. Although this step is initially expensive, the gallery plans to acquire new, profitable customers in the long term.

Regarding the value proposition through the most targeted approach in addressing customers, none of the five galleries questioned the use of digital facilities. They each have a gallery website and at least one social media account and generally believe that customers browse their website or social media before getting in touch with them or visiting the physical gallery.

However, gallery 5 is not very active in their social media channels. It also publishes only a small amount of information, such as the names of staff and artists, dates of

exhibitions and contact information, on its website. The gallery argues that social media is above all a medium of information and the important interaction with the customer takes place at a personal level. Thus, it is expanding its value proposition for clients primarily through various additional events throughout Germany.

In contrast, the website of gallery 2 serves also as the entire gallery. Since the gallery is not a brick-and-mortar business, it only has digital means to provide almost the entire value proposition to clients. Therefore, the website of gallery 2 is very extensive. It offers information about each painting, detailed biographies about artists, and information about the gallery itself. At the same time, it shows prices and price ranges over time of the artworks and artists. The gallery manager of gallery 2 is sure that this transparency is desired and appreciated by clients. In this way, they are also expanding their client base to include less sophisticated collectors who see art not only as a luxury or cultural asset, but also as an investment. Furthermore, it is the gallery's goal to offer as much service as possible to the customer. Thus, the gallery website offers tools for the customer such as "augmented reality", which is the computer-supported extension of the perception of reality. Furthermore, the gallery is very active on their social media accounts and posts new content at least once a day.

Gallery 2 employees regularly analyze which customers follow and are active on the gallery’s social media accounts. They feel that social media is an important medium to attract new customers and communicate with customers. The gallery makes paid media advertising in social networks to address targeted customer groups digitally.

Gallery 3 also offers the option for its clients to visit its physical rooms. The presence of the gallery on the Internet is not very extensive. Individual works of art are not displayed on the website. However, the gallery partners with an online gallery. Thus, it indirectly offers its customers the possibility to enjoy all digital advantages via the partner's website.

Gallery 1’s value proposition is divided into two parts. The gallery has a physical branch with exhibition spaces, but at the same time, it also has a highly developed digital presence. The digital presence takes place via the social media channels YouTube, Facebook, and Instagram, as well as via the gallery website. This website presents all the artworks that are shown in the gallery, both through photos and

through a virtual exhibition space that allows a closer look at the impact of the artwork. The manager also stressed the importance of having a website as a way of showcasing the artists the gallery represents and stated that the gallery’s website functions as an archive for his gallery.

The manager closely evaluates the use of the social media accounts. It has been noticed that artists in particular make their first contact with the gallery via the social networks. Customers who follow the gallery accounts have usually been to the gallery at least once before. The personal contact between buyer and gallery owner is perceived by the manager as the most important value proposition for customers.

Even when requests for artwork come in via online media such as social media accounts, buyers have usually been to the gallery in person. The gallery owner explains this as stemming from the character of artworks. Furthermore, customers who are not yet familiar with the art market need support and advice when buying art.

Therefore, they need close personal contact with the gallery employees through the digital sphere. Since the gallery also considers younger people who own few or no artworks as a target group, it is very important that younger people are supported in their purchases.

Gallery 4 serves the value proposition of customers, like gallery 1, through a physical position in addition to a strong digital presence. The gallery uses accounts at different social media platforms to target different customers.

“With the medium Facebook we noticed that especially older people follow and interact with us. Compared to that, our Instagram channel is mainly followed by younger people (25-35 years). For us, the goal with the Instagram account, is to build a younger customer group to introduce young potential customers to the art medium.” (Gallery 4).

In addition, gallery 4 would like to offer customers an additional service by having partner galleries internationally. In this way, customers can be served worldwide, without the gallery itself having branches in different locations.

One of the five galleries displays price information on its website. The online-based gallery 2 considered it absolutely necessary to display and communicate prices. This would be the only way to ensure transparency and trust in the digital space. Here the owner focuses on the reputation of the artist, in a commercial sense of what price the works of the artists were sold for, but also in an artistic sense in having their own artistic language.

Gallery 3, although not displaying any price information on the gallery’s website, does use the digital platform of its partner, where price information about works is displayed. Arguments for not showing price information were largely related to face-to-face contact and informal relations. Gallery 4 plans to publish the prices for the

“cheaper” line on their website.

The value proposition for the customers offered by the galleries interviewed is twofold. All the galleries consider it essential to have personal contact with the clients, which is made possible by a physical presence. Hence, four of the galleries have physical showrooms to provide this service to their clients on a permanent basis. Secondly, all gallery managers recognize the importance of a presence in the digital space. Accordingly, three of the galleries have a highly developed presence, offering a variety of online services to their clients. Furthermore, three of the galleries use new technological opportunities to reach existing and new clients via newsletter, social media, or paid content marketing. The galleries have thus adapted the value proposition for their clients to the digitalization of the art market.