Etsy: Antidote to “commodified” e-commerce

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Peer-to-peer marketplace operator Etsy is investing heavily to make the shopper experience more personal as the holiday shopping season kicks off, positioning itself as the antithesis of other markets such as Amazon and Walmart.

CEO Josh Silverman told analysts in a conference call Thursday (November 3) that he saw consumers consolidate their buying behavior around fewer and fewer places, “and most of these places are playing the same play books. They will try to sell you commoditized products that are cheaper to buy and arrive faster.

“The more people consolidate their purchases, the more they will want an alternative,” he added. “And Etsy is the primary alternative to commoditized commerce. “

However, what Etsy seeks to improve is to set clearer expectations for when an item will arrive and to meet those expectations. As of January, almost 25% of listings did not tell buyers when an item would arrive; now almost all listings provide an estimated delivery date, in part because Etsy has encouraged sellers to meet certain standards through its Star Seller program.

Related news: Etsy customer service program could hamper new seller growth

Etsy has over 5 million sellers in its marketplace around the world. Most are one-person, home-based businesses, CFO Rachel Glaser said, and more than 90% of salespeople report sourcing materials locally and having limited overhead costs.

“We believe our peer-to-peer execution ecosystem is a critical part of building Etsy’s sustainable competitive advantage,” said Silverman. “We’ll probably never promise to deliver every item on Etsy in two days or less. This is not our reason for being.

Etsy reported that its consolidated gross merchandise sales (GMS) grew nearly 18% year-on-year to $ 3.1 billion, with Etsy’s market GMS increasing more than 12% to $ 2.7 billion. of dollars. Excluding masks, the Etsy GMS marketplace grew by almost 24%.

Silverman noted that the fourth quarter will likely be Etsy’s toughest year-over-year comparison due to a “punch” in November and December of last year that saw sales of the market to rise 111%, along with fears that e-commerce continues to slow. .

“Our main goal is to make sure that our customers, our buyers and our sellers, have a very good experience this quarter,” said the CEO. “This is what is in our control, and this is what we are focusing on.”

PYMNTS data shows that 87% of consumers plan to do at least some of their vacation shopping online, up 10 percentage points from 2020.

See: NEW DATA: Almost 90% of U.S. Consumers Expect Online Vacation Shopping in 2021, 13% More Than in 2020

Invest in experience

The Etsy marketplace has acquired approximately 11.1 million new and “reactivated” buyers who have not purchased for at least a year, including 7 million new buyers. Growth of new buyers is slowing, as expected due to increased consumer mobility, executives noted. In the third quarter, the number of active buyers increased 30% year-on-year to 89 million, roughly the same level as in the previous three months.

“People move around and shop wherever they want,” Silverman said. “They keep choosing to come back to Etsy over and over again.”

The key, however, is to keep those customers, which can sometimes be easier said than done. Silverman said that Etsy is currently investing heavily in “several areas focused on buyer inspiration,” including the custom onboarding for new buyers, an Updates tab to improve the Etsy purchase flow and provide better recommendations to customers.

“In the past, Etsy recommendations often looked like a rearview mirror, based on things you recently bought or searched for,” Silverman said. “Today we are investing heavily in machine learning tools, trying to understand your tastes and preferences in order to anticipate and inspire your next purchase. “

The CEO also noted that Etsy saw a 36% increase in app downloads since the start of the year, and for the first time, the app has overtaken the mobile web GMS, although the latter has always the most visitors.

Subsidiaries

Glaser said the integration of the new acquisitions Depop, a second-hand market, and elo7, a Brazilian version of Etsy, is going well and that teams are starting to develop new products and operating plans to drive growth. . She noted, however, that Depop faces headwinds due to increased consumer mobility.

Silverman said the priorities of Etsy’s subsidiaries, which also include the Reverb musical instrument market, are also focused on improving the customer experience, especially with regard to search technology and costs. ‘shipping.

“We’re working closely with them… to streamline the buying journey so people can go from sight to buying even faster and easier,” he said.

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NEW PYMNTS DATA: 2021 HOLIDAY SHOPPING OUTLOOK

On: It’s almost time for the holiday shopping season, and nearly 90% of American consumers plan to do at least some of their purchases online, up 13% from 2020. The 2021 Holiday Shopping Outlook, PYMNTS surveyed over 3,600 consumers to find out more about what drives online sales this holiday season and the impact of product availability and personalized rewards on merchant preferences.


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