When you think of Etsy, what comes to mind? Probably arts and crafts and unique finds, right? This is a perception that Etsy has been grappling with lately as it tries to transform into a more frequently visited shopping destination.
Although personalized gifts tend to a more confident purchasing decision, Etsy is grappling with the perception that personalized gifts are for isolated occasions rather than for any event.
In May, PYMNTS reported that Etsy, originally a niche platform for handmade and vintage items, was seeking to broaden its appeal. The company focused on expanding its customer base and positioning itself as an all-around shopping platform for everyday purchases.
The platform’s expansion was driven by sales linked to the pandemic, deliberate acquisitions, and an emphasis on sought-after product categories.
Throughout 2020, Etsy met the need for face masks, which led to a 250% surge in its share price that year. But the platform’s accomplishments extended beyond masks. The leading six categories on Etsy accounted for more than 80% of its gross merchandise sales (GMS) in 2020. Among these, homewares stood out, with $3.2 billion in sales and a 118% growth rate.
After the shutdowns, Etsy encountered challenges.
“Buyers too often think of us only for very specific needs at the end of their shopping journey, when they can’t find the item somewhere else,” CEO Josh Silverman said in May, saying Etsy intended to position itself as a go-to marketplace instead of a once-in-a-while shopping experience.
Silverman also said navigating the company’s assortment of over 100 million items can be time-consuming and challenging for buyers.
During a Q2 earnings call with analysts on Aug. 2, Etsy’s Chief Financial Officer Rachel Glaser emphasized the implications of the imminent resumption of student loan payments and the cessation of child tax credits. Glaser said these factors could introduce additional financial strain on consumers, which might affect sales in the third quarter.
However, even though it cannot do anything about student loan payments and child tax credits, it has the opportunity to provide additional incentives for shopping on the platform, especially as consumers prioritize essential purchases.
Etsy has entered the baby market with a baby registry feature. Etsy enables current and soon-to-be parents to compile a list of infant, children, and nursery items they want from the array of international artisans associated with the company.
This builds upon the wedding registry started in May and comes in response to a data insight. “With someone searching for a ‘baby item’ on Etsy every second, it’s clear that shoppers are seeking alternatives to mass-produced baby and kids items,” the company said in a statement.
Traditional brick-and-mortar competitors are also vying for parents’ spending.
Having closed its final store in 2018, infant products retailer Babies R Us reopened its inaugural U.S. store — a flagship location at the American Dream mall in New Jersey — on July 19.
The store is a precursor to a potential nationwide expansion of Babies R Us, as stated in January by Yehuda Shmidman, the chairman and CEO of WHP, owner of Babies R Us.
The store is embracing experiential features, including opportunities for taking photos, a stroller test track, and a wishing tree for friends and family to express their good wishes for the baby.
In addition, there is a dedicated baby registry lounge, a private event learning center, informative workshops for parents and caregivers, and a Comfort Zone for parents to feed or change their baby.
Meanwhile, on Monday (Aug. 21), Target announced that it has expanded its Good & Gather private-label food brand to include baby and toddler products.
“For generations, parents have turned to Target to help them care for their children — and I’m excited that we’re building on that legacy in food and beverage with the launch of Good & Gather Baby and Good & Gather Toddler,” said Rick Gomez, Target’s chief food and beverage officer, in an announcement.
The extended selection comprises yogurt bites, bars, and teething biscuits, all of which can now be added to the baby registries of parents registered with Target.
Amid the altered post-COVID business environment, the worldwide personalized gifts market, valued at about $30.3 billion in 2022, is anticipated to expand to around $47.6 billion by 2030.
However, despite the potential of personalized gifts and the increasing importance of personalization, a lingering question is whether Etsy’s customer experience is compelling enough to drive consumers to make purchases on their platform.