The Valuer’s View: The Psychology of Possession with Alessandro Borruso, Deputy Director of Sotheby’s Diamonds
Alessandro Borruso is a leading expert on the world’s rarest jewels. His expertise as a gemologist has connected him to many world-famous creations, including grading all the diamonds used in Damien Hirst’s famous diamond-encrusted skull artwork, ‘For the Love of God’. Sotheby’s created a luxury and lifestyle division in 2017 and had been investing in online in the years leading up to the crisis. In an article written in January of this year, presciently titled “The Big Year of Change for Auction Houses”, Sotheby’s CEO Charles Stewart talked about the importance of luxury to Sotheby’s as a major opportunity “to further develop new sales channels, including marketplaces, e-commerce and even retail – putting us on a path for future growth.”*
It seems that you were already geared up to work online before this crisis hit. How has this played out in reality?
In Hong Kong, we are offering one of the largest diamonds ever sold. A flawless diamond, one of the rarest in the world – and it’s online without a reserve. That’s a sign of what’s changed. If there’s one thing that really struck me, with our clients, it’s trust. Our clients are not only buyers, they are also consignors. The trust from a consignor to give us their property to be sold online is a real vote of confidence. As a brand established in 1744, that’s almost 300 years of trust, and their trust has been rewarded time and time again.
“We discovered a lot more about ourselves, during this time – that we have a culture that adapts easily, and enjoys being more adventurous. We already had a big focus on online in the years before the crisis, and so it was a question of investing and innovating more in what we were doing already. Our global network has been one of our strengths – we never stopped. And we kept things moving even when countries were in lockdown, as we were able to shift assets across locations having eighty offices in forty countries around the world.
How are jewellery and watches standing up to other categories of investment?
The luxury division was created because there is such huge demand. Jewellery and watches are often an entry category for us. As you said, ‘luxury is not a category’, and one of our strengths is that we have so many categories, where new clients who might come to us first, to bid on one very specific product, become curious about other categories. We have seen a 30% increase in new bidders, and a quarter of those are under 40. Watches and some relatively new categories, such as sneakers and thematic Hip Hop sales tend to attract up to 70% of new participants, with an average age of 39. We’re speaking a language that also appeals to younger generations.
Have you seen any surprises over the past 6 months?
Collectors are increasingly confident in buying high-value lots online. We broke the world record for a watch sold in an online auction three times in three months. In July, a Rolex Daytona, John Player Special sold for $1.5 million. A Cartier Tutti Frutti bracelet sold for over $1.3 million – the highest price for any jewel sold in a Sotheby’s online sale. It’s the idea of buying something with a unique story, an emotional connection to a creation that’s incomparable.
As new forms of virtual luxury emerge, how do you see the future of what Sotheby’s will be valuing? As we saw $9,500 spent on a digital dress that only exists on Instagram, Gucci CMO Robert Triefus said: “Virtual items have value because of their own scarcity, and because they can be sold and shared.
In the future, we may well see digital jewellery, especially if the main human stage is social media. We concentrate right now on tangible things that represent beauty, rarity, emotion. Pieces that will never be recreated or seen again. A research study was conducted on the psychology of possession, on the moment the bid is with you – you feel a moment of possession, and then an immediate sense of loss when the bid is elsewhere. It’s the anticipation of that moment of possessing your object, of putting your hands on it.
Have the last 12 months reaffirmed or changed your view on how brands need to exist and operate, now and in the future?
Technology is a key part of our strategy, which allows more people than ever to participate in our sales and engage with us. This is a time of digital transformation for the business, and collectors are keen to embrace new, fast and dynamic ways to transact with us.
What’s next for you – where you will be focusing in the near future to ensure growth and success?
The next steps are around live auction, online auction, immediate purchase and continuing our experimentation with new physical spaces. We want to expand our offering to clients, so they can buy with us whenever they want, in whichever way is most convenient for them and not be restricted by the confines of the auction calendar. We already have Sotheby’s Diamonds salons in London and Hong Kong where we offer unique contemporary jewellery masterpieces. We also have two wine shops and we aim to increase our physical retail spaces offering our clients a larger spectrum of works available for immediate purchase in the future. Live sales will continue as an important part in years to come, but we will hold a growing proportion of online sales going forwards.