Etsy, originally a niche platform for handmade and vintage items, is seeking to broaden its appeal beyond its specialized offerings. The company is now focused on expanding its customer base and positioning itself as an all-around shopping platform for everyday consumers.
The platform’s growth has been fueled by factors such as pandemic-related sales, strategic acquisitions, and a focus on popular categories. In 2020, Etsy saw a surge in demand for face masks, contributing to a 250% increase in share price that year. However, the platform’s success goes beyond masks. In fact, Etsy’s top six categories represented over 80% of its gross merchandise sales (GMS) in 2020, with homewares leading the way with $3.2 billion in sales and 118% growth.
Since then, Etsy has struggled to report growth, but during their Q1 2023 earnings call held Wednesday (May 3), the company announced a positive development. They reported a 1% year-over-year increase in the number of active buyers, reaching a total of 89.9 million, marking the first growth in this metric since the fourth quarter of 2021.
According to the company, it gained 7 million new buyers and reengaged with 21% more buyers compared to the same period last year. Additionally, revenue from the marketplace increased by 9.3% year over year, while revenue from services increased by 14.4% year over year.
“We are pleased that Etsy has once again delivered solid top- and bottom-line performance in the first quarter, maintaining the vast majority of our pandemic gains in the face of stiff macroeconomic headwinds,” Etsy CEO Josh Silverman said on the call.
With its newfound momentum, the online marketplace is looking to solidify its positioning with consumers as the go-to marketplace instead of a once-in-a-while shopping experience for niche purchases.
“Buyers too often think of us only for very specific needs are at the end of their shopping journey when they can’t find the item somewhere else,” Silverman said.
Silverman also noted that with the company’s vast selection of over 100 million items, it can be time-consuming and challenging for buyers to navigate, leading to difficulties in finding the best products. Additionally, buyers may have concerns about the post-purchase experience due to the extensive range of merchandise offered by the platform. As a result, Silverman acknowledges that there is a need to enhance Etsy’s relevance and accessibility to millions of buyers globally.
“We’ve kicked off an exciting pipeline of product development and marketing initiatives to drive improved customers experiences and engagement in 2023,” Silverman said. “We believe that Etsy can be more relevant, more often, to many more millions of buyers around the world.”
One of those initiatives includes its ‘Make an Offer’ feature for vintage items which went into testing.
According to an email from Etsy to PYMNTS on April 5, the feature is being piloted for a limited time and is only available for items that sellers have opted into the test.
The company revealed that vintage sellers have opted in more than 1 million items for the test within two weeks since its announcement to sellers.
“We know that every Etsy seller has their own unique approach to pricing their items,” the online marketplace said at the time of the announcement. “Some of you have also told us you need more flexible pricing options. That’s why, for a limited time, we’re testing out a new tool that will give shop owners the option to receive price offers from buyers.”
Sellers can specify a minimum price and decide whether to receive all offers or only those above that threshold. If needed, negotiations can continue through the platform’s messaging tool.
Etsy is also planning to launch television advertisements to reinforce its association with specific purchasing occasions, starting with home and living styles and gifting.
Through these initiatives, according to Silverman, Etsy’s focus will be on attracting new buyers to the platform and becoming the top choice for sellers by providing them with effective and efficient growth opportunities.
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