Etsy Provides Some Clues On March Retail Numbers

The first of what is expected to be a series of informal retail reports on March results was delivered Thursday afternoon (April 2), this one from Etsy. As expected, the volume swings from January through the end of March were dramatic for the online seller marketplace. But what was not expected was an uptick as the month wore on.

According to a webcast conducted by CEO Josh Silverman, Etsy was off to a blistering pace in terms of growth. Consolidated GMS growth between the months of January and February was up 41 percent year over year, and then the COVID crisis became what he called a major “mindshare” event. That’s the company’s term for a major effect – whether it’s a major news event or a hurricane – that takes the focus off Etsy’s largely home craft businesses.

That drop happened suddenly on March 8. In the third week of March, the company’s consolidated GMS for the week was negative 2 percent. However, in the fourth week of March, recovery kicked in: Consolidated GMS in the fourth week of March was up 27 percent year-over-year. Within that fourth week, the swings returned with a negative 4 percent day and, just a few days later, a positive 23 percent day.

All in: For the first quarter of 2020, consolidated GMS for Etsy, Inc. was approximately $1.4 billion, up about 32 percent year over year from 2019.

“We are experiencing right now an unprecedented healthcare crisis, which has also triggered an economic crisis,” Silverman said. “While the healthcare crisis is unprecedented and the specifics of the economic crisis are unique, the idea that we experience economic crises from time to time is actually part of the order of an economy – and I’ve experienced this in my 25 years as an executive, through the dot.com crisis and the financial crisis, and many of the people in our leadership team have been through two or three recessions in the past. And it’s in moments like that, that we’re particularly grateful that our mission is so powerful and so relevant now more than ever. Etsy is about ‘keeping commerce human.’ And the world needs that now more than it has ever needed it.”

What did consumers buy when they were so inclined? Traditionally, in the month of March, the weddings category would be hot, but it was negatively impacted. Another category that would traditionally be strong at this time of year is jewelry, but that was also down significantly. Categories like self-care, puzzles, and bath and beauty were stable, as Etsy was often the only outlet available. Also, the company’s musical instrument site, Reverb, saw a spike from first-time musicians thinking about taking up playing.

“So we certainly see some headwinds today from some of the very specific and time-driven events that are happening right now,” noted Silverman. “But we also think that there’s going to be some shifts in habits … as people who are more comfortable buying offline really learn to embrace and shop online. As supporting small independent businesses becomes really front of mind for people as well, we think Etsy can be the real beneficiary of those over time, and we’re working hard to make sure we position ourselves to benefit from that.”

The company also announced measures to support the 2.7 million Etsy sellers, starting with a $5 million investment in offsite ads. It is also providing all sellers with a one-month grace period in paying fees, and has introduced 24/7 member support to address delivery times and shipping issues.