On Tuesday evening Etsy announced the company’s first $1 billion quarter. In its fourth-quarter earnings call Etsy’s CEO, Josh Silverman, said sales grew 17.8% over the fourth quarter of 2016.
“In a sea of sameness Etsy stands for something special and we need that now more than ever,” Silverman said. “We believe we have a long runway of growth and we’re acting with urgency to move faster.” There are now 50 million items for sale on Etsy, 1.9 million active sellers, and 33 million active buyers.
In an email sent to all sellers on Wednesday afternoon, the company announced that later this year they would be shutting down Etsy Studio, the crafts supply marketplace that launched in May, and Etsy Manufacturing, a site that matched sellers with small batch manufacturers. Since Silverman took on the role of CEO in May Etsy has been laser-focused on sales growth in the core marketplace.
“We’ve accomplished a lot since last May,” Silverman said on the call, citing the launch of approximately 350 product enhancements. New features include multishop checkout, bestseller badges, tools that allow sellers to create shop-wide sales and offer free shipping and gift wrapping. He said the company plans to keep up the rapid pace of implementing new features. “The more we can ship product enhancements, the quicker we learn, and the quicker we get better,” he said. “Going quickly from idea to testing to market is really important.”
A focus in the fourth quarter was on fostering better holiday season sales. Silverman said that a new tool that allows buyers to filter items that are available to ship within 1-2 days, and items that offer free shipping, helped to extend the holiday shopping season on Etsy.
For the first time, Etsy ran site-wide sales events in 2017, one on Labor Day and another during Cyber week (the week after Thanksgiving). Results for those events were financially “incremental,” but according to Silverman, they were important for meeting consumer expectations. “Running a cyber sale puts us on equal footing with other e-commerce sites so that people coming to the site expecting to find deals do find deals,” he said.
Etsy may be planning an event like Amazon’s popular Prime Day for some time in 2018. “There might be things during the year that we could do that are unique to Etsy that nobody else is doing,” he stated. “You should keep your eye on that.”
Other plans for 2018 include:
- Continuing to develop machine learning and artificial intelligence to improve search
- Clarifying to buyers how each seller handles returns and exchanges
- Further clarifying shipping costs and timelines
- Sending more targeted emails and push notifications to buyers
“Marketplace models get better as they get bigger,” said Silverman.
The importance of the human connection between buyer and seller, once a focus at Etsy, wasn’t mentioned in either the earnings call or the email to sellers, nor was there any focus on the value of handmade goods.
When asked during the call to address seller complaints and resistance to the new features Silverman said, “We’re focused on growing the pie for everyone. As a platform, our job is to make the experience better for all buyers and sellers. On any individual day, there will be winners and losers. The main thing is how do we make the pie bigger.”
I’m very interested in the data as Etsy grows. I’m more likely to stay an enthusiastic Etsy seller if the data says the new customers they reach are returning again and again. I’ve learned through the sales events that my customers could care less about a sale because they aren’t on Etsy looking for a deal. I wonder if any other Etsy shops found this to be true? In catagories with lots of competition it may have helped? Regardless, I have respect for a CEO who is willing to take risks and try new things, but I really do hope he can do this while also maintaining the things that drew me to Etsy. I am bothered that handmade and personal connections had no place in his message.
When you use “sale events” in your marketing you start the competitive race to the bottom on your prices. Not a sustainable business plan for hand-makers/artist-makers to earn a living, let alone a “fair” income.
It was interesting to watch Josh Silverman talk about these sales events. He said that the actual sales generated were incremental, meaning that it wasn’t a huge number, but the idea was to satisfy customer expectations. In other words, customers expect there to be a deal during certain times of the year so when they come to a marketplace that’s what they’re looking for. He feels Etsy should satisfy them by offering sitewide deals. Once customers realize this will be the case they’ll think of Etsy more often. I’m not sure this is the case, or if it is that it’s healthy for a handmade marketplace, but that seems to be his thinking.
Hmm. I think that encouraging a culture where there’s an expectation of discounts would cheapen things over time. As a seller on Etsy, most of my Etsy customers contact me for custom work and are prepared to pay up for that. As a shopper on Etsy, I am generally on the hunt for the just-right, unique, handmade gift, and although I might have a budget, the thought of searching for a sale doesn’t enter my head. I’m sure there are ALL kinds of shoppers on Etsy though! I’d be curious to see some survey stats.
I agree with Abby I think there are certain times people expect to see a “sale” wether it’s a real sale or not-on our end.
While the don’t like it for handmade business I don’t mind out some stuff I want to move ov sale to join the event.
I’m all for doing something different during peak selling periods but our answer to this needs to be as unique as our product and certainly different from mainstream retail. How about a limited product or feature that is offered only during this time? something custom available for a short time? As said above, encouraging the expectation of a “sale” culture will diminish the uniqueness of our product. The answer isn’t simple, handmade isn’t simple.