Etsy CEO Reveals How They're Keeping Up with Demand

Table of Contents

• Introduction
• Trends from Black Friday to Cyber Monday
• Meeting with President Biden
• Impact of Supply Chain Issues on Etsy Sellers
• Etsy's Approach to Supply Chain Management
• The Stock Performance of Etsy and the Omicron Variant
• Competition from Sellers Going Direct-to-Consumer
• The Role of Etsy in Building a Brand
• Popular Holiday Gifts on Etsy
• Top Purchasing Countries on Etsy
• Most Searched Item on Etsy

Article

Etsy: Navigating Trends, Supply Chain Challenges, and Competition

Introduction

Etsy, the online marketplace known for its unique and handmade products, has had a busy few days during the Black Friday to Cyber Monday period. In this article, we will discuss the trends observed during this period, Etsy's recent meeting with President Biden to address supply chain challenges, the impact of these challenges on Etsy sellers, the performance of Etsy's stock amidst the emergence of the Omicron variant, competition from sellers going direct-to-consumer, the role of Etsy in brand building, and the most popular holiday gifts and searched items on Etsy.

Trends from Black Friday to Cyber Monday

The Black Friday to Cyber Monday period is crucial for Etsy, and the team spends all year preparing for it. This year, Etsy was pleased to report that there has been no rise in out-of-stock items, stores going on vacation, or postal delays. This is a significant accomplishment considering the surge in demand and the ongoing supply chain challenges faced by many businesses. Additionally, it was revealed that 50% of search queries on Etsy yield a thousand or more relevant search results, showing the diverse range of products available to buyers.

Meeting with President Biden

Josh, the representative of Etsy's five million sellers, recently had the opportunity to meet with President Biden at the White House. The meeting aimed to address supply chain issues and emphasize the importance of infrastructure for small businesses. Josh highlighted the critical role of the US Postal Service (USPS) infrastructure, particularly for sellers in rural areas. Unlike for-profit players, the USPS is mandated to serve every postal address in America, ensuring a level playing field for small businesses. The meeting also discussed the need for broadband internet access, as one out of every four Etsy sellers lives in a rural area. Josh expressed gratitude for the support shown by the administration in these matters.

Impact of Supply Chain Issues on Etsy Sellers

While supply chain issues have been a concern globally, Etsy sellers have expressed less worry compared to the previous year. Many sellers reported buying 95% of their products within their own countries. In the United States, 47% of sellers source all their raw materials from within their own states. This localized supply chain provides reassurance and stability, minimizing the risk of disruptions. Additionally, Etsy sellers were encouraged to stock up early, leading to a greater sense of preparedness for the holiday season.

Etsy's Approach to Supply Chain Management

Etsy's focus on local sourcing and encouraging sellers to stock up in advance has proven effective in mitigating supply chain challenges. By promoting the purchase of raw materials and products within a seller's own country or state, Etsy creates a more localized and efficient supply chain network. This approach enables sellers to maintain a steady inventory and ensures timely deliveries. In the event that a seller sells out, the vast number of sellers on Etsy provides sufficient alternatives for buyers, minimizing the impact of individual supply shortages.

The Stock Performance of Etsy and the Omicron Variant

Etsy has been regarded as a pandemic winner due to its success during the COVID-19 lockdowns. However, recent news about the emergence of the Omicron variant has led to fluctuations in the stock market, including a drop in Etsy's stock value. Josh acknowledges that it is challenging to predict the impact of new variants and emphasizes that he is not a public health expert. However, he points out that during the holiday season of the previous year, Etsy experienced tremendous growth as many physical stores were closed and consumers had limited options. This year, with the majority of stores open and people freely moving about, Etsy still projected a strong fourth quarter. This indicates that millions of people have come to appreciate what Etsy offers and continue to choose it as their preferred shopping platform.

Competition from Sellers Going Direct-to-Consumer

Etsy takes a different view on competition from sellers who choose to sell directly to consumers through their own websites, using platforms like Shopify. Instead of seeing it as a zero-sum game, Etsy recognizes that many sellers opt to sell on both Etsy and their personal websites. Sellers often realize the challenges of attracting traffic and building trust when they try to establish their own independent online presence. This realization strengthens Etsy's position as a trusted and established brand that attracts tens of millions of buyers specifically seeking artisanal and handmade products. Etsy's role is to provide a platform where buyers can connect with sellers and have a unique shopping experience.

The Role of Etsy in Building a Brand

Etsy's success lies in its ability to build a brand that resonates with buyers looking for personalized and handmade items. Etsy aims to attract millions of buyers who trust the platform and the sellers on it. While individual sellers may face challenges in gaining visibility and trust, the collective strength of Etsy's brand enhances the visibility of all sellers. Etsy offers a marketplace where buyers can find products that are artisanally crafted and tailored to their preferences, fostering a deeper connection between buyers and sellers.

Popular Holiday Gifts on Etsy

The current trend on Etsy reveals a desire for people to come together in person, reflected in the popularity of items such as barware, family pajama sets, and tablescapes. Items that promote family gatherings and shared experiences are in high demand this holiday season. For instance, personalized place settings have seen a 72% increase in sales compared to the previous year. This highlights the importance of personalization and uniqueness in the gift-buying experience on Etsy.

Top Purchasing Countries on Etsy

The United States remains the leading country in terms of purchases on Etsy. However, the United Kingdom has emerged as a significant market for Etsy since the beginning of 2020, becoming a household name. Germany is also showing promising growth potential, and Etsy aims to establish a strong presence in this market as well. The ability to attract buyers from diverse countries highlights the global appeal of Etsy's products and the reputation it has built worldwide.

Most Searched Item on Etsy

During the recent Cyber Five (Black Friday to Cyber Monday) period, Etsy experienced a staggering rate of searches, with 200 searches per second. The most common searches were for gifts and personalized gifts. This indicates that buyers prioritize finding unique and customized items on Etsy. The platform's ability to provide personalized and made-to-order products sets it apart and adds value to the shopping experience.

In conclusion, Etsy has successfully navigated the trends observed during the Black Friday to Cyber Monday period and continues to cater to buyers' preferences for unique and personalized items. Despite supply chain challenges, Etsy sellers are adopting localized sourcing strategies, and the platform remains a reliable choice for holiday shopping. While competition exists from sellers going direct-to-consumer, Etsy's strong brand and established marketplace provide advantages for both sellers and buyers. As Etsy expands its global reach and appeals to buyers from various countries, it solidifies its position as a leading online marketplace for artisanal and handmade products.