Art of the Pivot: How a Gallery Found Suburban Success With Multi-channel Sales

Nathaniel Hughson Gallery | Shopify Retail blog

When Daniel Banko purchased a building on a bustling street in Hamilton, Canada, 10 years ago, he had no idea that the neighborhood would be at the center of what has been described as a “cultural renaissance.”

Located 38 miles outside of Toronto, Canada’s most populous city and economic centre, Hamilton has experienced an awakening both in terms of a major influx of people moving to the city and in its artistic blossoming.

“No one wanted to be here,” says Banko, who purchased the building to house two of his businesses: a photography studio and an advertising agency. Banko opened his third business, the Nathaniel Hughson Art Gallery, at the start of the so-called renaissance.

“Hamilton has always been a strong cultural city mostly with music, but it has never really been celebrated in the way that it is now. There have always been a lot of talented artists who lived here but they just didn’t get the same media attention that they are receiving now,” said Banko, adding that Hamilton’s thriving food scene and numerous cafes have contributed to the recent spotlight.

Banko points to Hamilton’s regional theatre, Theatre Aquarius, along with the Hamilton Philharmonic Orchestra, and the Art Gallery of Hamilton as three cultural institutions that existed long before the renaissance. These icons have acted as pillars to support the city’s artistic development, encouraging its citizens to weave the arts into their daily lives.

Adding to the cultural movement is the influx of city-dwellers heading west from Toronto, the country’s second-hottest real estate market after Vancouver, as housing prices continue to rise and push residents outside of the core. But for many people leaving Toronto, the choice is not purely economical. The arts scene has drawn many to Hamilton, including large numbers of young adults who don’t want to have to sacrifice the feeling of living in a bustling city rich in culture.

“We’re in the very early stages of this renaissance and there are more and more people discovering all the wonderful hidden or ignored cultural treats the city has to offer as people move west. Right now, food is the big cultural phenomenon in town. Because the population is so diverse, there is a lot of authentic cultural flavor and a great fusion food movement.”

Ahead of the Curve: The Beginnings of a Gallery

Nathaniel Hughson Galley | Shopify Retail blog

Image Credit: Nathaniel Hughson Gallery

Four years ago, Banko opened the Nathaniel Hughson Gallery just before this cultural renaissance was in full swing. Galleries had begun popping up in the neighborhood, especially on John Street North, where his other businesses are located within the same building.

At the same time, Banko noticed momentum building in the number of people looking to purchase Canadian-made art in Hamilton. As a graduate of McMaster University’s art program, Banko is well connected in the arts industry and has built a strong network of contacts. These contacts, some of them friends from university, proved to be a secondary reason why Banko wanted to open the gallery.

I was surrounded by a lot of talented people who didn’t have the time or the knowledge to properly market themselves. Having worked in commercial photography and advertising for 20 years, I felt it was time to give my artist friends a hand.

Early Success With Multi-channel Art Sales

With the ideal gallery space and the intel that there was a demand for Canadian art, Banko opened the Nathaniel Hughson Gallery and went on to experience rapid success in the first two years. The gallery welcomed a consistent stream of customers both in store and online through the use of its ecommerce website.

“There were instances where people would remember an artist they saw in Toronto, Ryan Price for example, and they would find his work on our Shopify site and order it online, saving themselves a trip to Hamilton.”

With traffic coming from both angles, the Nathaniel Hughson Gallery received an overwhelming amount of success upon its launch.

“Our measure of success comes from selling the work of our artist, increasing their name recognition and building our brands together. We don’t expect a lot of quick win/sales victories, our price points don’t always allow for that. Instead we are nurturing our artists and our customers at the same time. Having an online version of our gallery allows people to keep coming back to look at their favourite work until they are ready to commit to it.”

But it quickly became apparent that the gallery would become much more than a side project. Balancing all his businesses became difficult for Banko and he made the tough decision to close the physical space after two years.

“The gallery was always meant to be a side project and a source of inspiration for Banko Media until I was ready to retire. It got to be pretty all consuming to the point where we actually closed the physical gallery for a year. Our Shopify site let us keep an online gallery going year round and we began showing art by appointment only for 2016,” he said.

We didn’t think it would be as successful out of the gate as it was.

Rather than entirely shutting down the art gallery during growing pains, Banko continued to house the art within the building while operating his other businesses. This created the added flexibility of storing the art while available online and provided artistic inspiration as many of the pieces hung on the walls of Banko Media. This model worked well for Banko, who was able to upkeep a brand presence without dealing with the demands of the physical space.

“We operated on a different business model than all of the [galleries] and so rather than shutting down we were able to regroup, deal with internal issues, and launch again this year.”

In fact, many people didn’t realize the Nathaniel Hughson Gallery had shut its doors because Banko maintained the gallery’s online presence and also sold art using his site. “We would run into people who were supporters of the business who didn’t know we had shut down. Having the ecommerce element and Shopify absolutely helped the business.”

Weathering the Economic Storm

Nathaniel Hughson Gallery | Shopify Retail blog

Image Credit: Nathaniel Hughson Gallery

During this period, other businesses who found a home on John Street North experienced different threats to their success. The gentrification of the neighborhood pushed a number of galleries out as a result of rising rent prices. All of the media attention surrounding Hamilton establishing itself as a major player in the Canadian arts scene actually ended up having a major downside for many arts businesses.

“We went from being in an area with a ton of other art galleries and then overnight the area gentrified and many of the galleries were shutting down,” he said.

Many of the galleries haven’t returned and Banko says there is often high turnover in the neighborhood, but the Nathaniel Hughson Gallery has been able to ride out the uneasy waves as a result of its unique business model.

But this wasn’t the first time that Banko had been thrown a curveball in his career. While at McMaster University, Banko spent three years studying sculpture and printmaking until his fourth year when legislation was passed preventing him from accessing the raw materials, such as scrap metal and salvaged materials, which were needed for his sculptures. Unable to source these materials, Banko had to switch his thesis to photography — which he initially practiced while finding materials for his sculptures.

“When I would be looking for metal I would have my camera with me and that would inform my sculptures. Rather than photography being a source of inspiration, it because my prime medium. I started a business in 1996 after graduating and it evolved into a publishing company. In 2004 the businesses merged and became an ad agency, then we got rid of publishing offering entirely,” says Banko.

Filling a Market Gap with a New Business Model

Nathaniel Hughson Gallery | Shopify Retail blog

Image Credit: Nathaniel Hughson Gallery

Banko’s natural ability to adapt has proven invaluable in his 20 years of doing business. It has also gotten him through three recessions, which often are the demise of creative businesses.

“The biggest thing I learned 20 years is that not every has the same risk tolerance. Any creative venture is a risky one as people’s tastes change, as recessions come and go. I’ve been through three of them at least. I used to think to myself, ‘why doesn’t everyone run their own business. This is so rewarding!’ Running a business is tough work and it definitely is not for everyone.”

Banko’s adaptability is not his only strength as a business owner. Offering a differentiated business model, the Nathaniel Hughson Gallery became in demand from both clients and consumers. Banko thought outside the box when building his business. Rather than open a traditional gallery model, he drew upon his experience in advertising to open a multidimensional offering which extended beyond the structure of a typical gallery.

“We act more as an art dealership. We pride ourselves on the fact that we are representing quality artists and handle the conversations with clients and artists before and after the artist shows rather than just selling art at openings. A big part of our plan is to raise the artist profile and we are coming in with more of a focus on a reputation management model for the artists,” said Banko.

This model provides artists with the full representation they need to make lasting impressions on potential buyers and connects them to Banko’s robust network. It is also a model that other art galleries do not seem to have caught onto just yet.

“Traditionally galleries make 80% of their sales through gallery shows, whereas we also do private tours and retain a portion of the artist’s work in storage. We always have access to unique pieces and do all the negotiating for the artist before and after the show. Galleries live and die by their next opening.”

Banko is also extremely selective in choosing which artists are shown in the Nathaniel Hughson Gallery. There is a level of exclusivity in this selection process as buyers know if Banko has an artist showing in his gallery, the expectation is that the artist is not showing their work anywhere else. Banko has agreements with the artists that the Nathaniel Hughson Gallery will be the only gallery to show their work, either in Hamilton or within the entire province.

Another criteria that Banko employs when selecting artists is that they are mid-career. He explains that as the art market is still relatively small in comparison to the United States, that buyers are more selective in the pieces they purchase. They need to truly love the piece and give consideration to its value down the road in order to feel they are making a solid investment, both as collectors and in contribution to culture and the local art market.

“The gallery chose to represent artist in their mid career because we wanted our customers to feel confident in the pedigree of the art they chose. We wanted to be able to help the artists promote themselves and focus on creating art while we handles their sales and marketing. We wanted to help our customers understand the story behind the individual or collective works they purchased so they could be comfortable with their selections and be confident in discussing the work with their friends,” he said.

One such artist is Judy Major-Girardin, who is known for her printmaking and painting. As a student at McMaster, Banko studied under Major-Girardin and now, 21 years later, her work is on display. Her exhibit actually relaunched the full-time opening of the gallery’s physical space on March 5. Banko considers the launch of this new exhibition as one of his proudest moments of his career thus far. The excitement surrounding a new opening is one of the reasons the physical gallery continues to exist.

People like a spectacle. That includes the artist and the audience.

"Putting shows on, programming a month’s worth of content in the form of complementary cultural programming is a ton of work but it keeps people coming in to see the artists and their work. While a website is great for broad exposure, there is still nothing like a seeing a painting or a sculpture in real life, on a wall, and imagining it in your home. Scale and environment can make a huge impact on the salability of a work of art. And the pressure of 50-100 other people in the room looking to buy the work you like helps a lot too.”

The Art of Marketing

For Banko, marketing his exhibits isn’t about what he knows — it’s all in who he knows, which is everyone in the city’s arts scene.

To promote openings, Banko draws upon his network, reaching them by enewsletters and through social media. With a long history of volunteering in the arts and culture sector in Hamilton, Banko’s name has become trusted and synonymous with unique, Canadian-made pieces.

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Additionally, the reputation of his other businesses, which he has run for 20 years, has helped Banko tremendously as he can draw on all of those experiences and contacts to continue to establish his following. Banko has grown this following over time, which is advice he passes on to anyone considering opening an art gallery or small business.

“Do it slowly. The biggest mistake I’ve seen is space envy or, on the photography side, equipment envy. Your space is just a tool in how you represent your artists. You may not necessarily need one right away. Explore all the options available to you and make rational decisions. Learn from other people’s mistakes. I make plenty but rarely do I repeat ones that I’ve seen others make.”

Applying His Learnings

While he has created a new business model for his gallery, Banko’s methods for building his business are timeless. He draws upon his network and reputation, uses word of mouth and e-marketing to spread the word about new shows, and supplies consumers with a tailored experience not readily available within the market. These steadfast tools, paired with Banko’s adaptability, have granted him longevity.

“We are definitely nimble!” he jokes. With three successful creative businesses spanning 20 years and three recessions, nimble would appear to be an understatement.