Marketers of the Year No. 5: Etsy
In one of Etsy’s holiday spots this year, a young Asian girl experiences constant mispronunciations of her name as she searches in vain for personalized merchandise. Among all the Shannons, Saras and Sheilas, there is never a Shiori—until her mother gives her a customized necklace she bought on Etsy. As an ad, the spot works well for 2020—Shiori wears a mask and takes online classes and, as someone of Asian descent, she’s a minority searching for more representation.
As a company, Etsy also works well for 2020. The 15-year-old online craft marketplace has tapped into several consumer trends strengthened by the pandemic, including the rise in digital commerce and the growing interest in DIY and customizable goods as well as merchandise from minority-owned businesses. As a result, the retailer is flexing its marketing wings—teaming up with 72andSunny for a narrative-driven holiday campaign—and growing its international reach.
“Strategically, this is the time we believe where we have to bring Etsy to the people—getting our word and our message and our story out,” says Ryan Scott, chief marketing officer of the Brooklyn, N.Y.-based company.
Stuck home under lockdown, many consumers turned to arts and crafts as a way to combat boredom and explore new hobbies. Their online searches for kits and materials led to a springtime boost in market share for Etsy, beating out older competitors that rely on brick-and-mortar traffic including Joann and Michael’s, according to 1010data, a provider of analytical intelligence to the financial, retail and consumer markets.
“All through COVID, we have seen the categories associated with the stay-at-home lifestyle doing exceptionally well,” says Inna Kuznetsova, CEO of 1010data. “Etsy plays right into the demand of arts and crafts—people are looking not only for materials, they’re looking for ideas.”
That demand has resulted in a massive sales uptick for Etsy. For the third quarter ended Sept. 30, Etsy reported a 128% rise in revenue to $451.5 million; net income, at $91.8 million, was more than six times that of the year-earlier period. Investors have noticed—the retailer’s stock is up well over 200% year-to-date, currently trading near $141.
As its sales have risen, Etsy has invested more in its marketing. For the third quarter, the retailer spent $126.8 million, or a quarter of revenue, on the discipline—$23 million of which was budgeted for TV and digital video. Scott’s team of 130 includes Etsy’s internal creative studio, which produces most of the brand’s marketing excluding TV work, as well as the martech and product experience teams.
Nimble supply chain
Scott credits some of Etsy’s recent rise with the nimble supply chain of its 3.5 million sellers. Early in the pandemic, when the Centers for Disease Control and Prevention first recommended facial protection, the marketplace was one of the few retailers selling masks, as mass market brands including Old Navy and J. Crew struggled to produce and meet demand. In contrast, Etsy encouraged its sellers to sew masks at home, resulting in the product surging to the top of search lists. In April, Etsy sold 12 million face masks, generating $133 million in gross merchandise sales for some 60,000 sellers, according to a spokeswoman.
“We essentially activated a super agile supply chain,” says Scott, noting the limited supply of masks. “It was a really important thing to get our sellers to act quickly and innovate in a category as important as masks.”
Now, with the holidays approaching, Etsy is pushing itself as the shop of choice for thoughtful giving—an alternative to companies like Amazon, for example. It’s an identity the company has adopted for years, but it feels especially relevant this year when consumers find new ways to communicate with loved ones they might not be with physically. Such gifting care is evident in another of Etsy’s holiday spots, in which two grandparents lament not being with family for Christmas due to the pandemic, while a handmade present cheers them up.
“Etsy as a platform through the years gained credibility as a destination to find thoughtful presents and objects and things you want to hold on to—the opposite of disposable,” says Carlo Cavallone, executive creative director at 72andSunny, which is in talks with Etsy about work in 2021. “This year, they did really well with the situation we’re in—people are looking for more meaning and more ways to connect, and they want to attach value to things.”
As it explores new storytelling, Etsy is also experimenting with new channels including TikTok as it explores overseas growth in Germany and the U.K.
“Until recently, many buyers only thought of Etsy for special occasions, but over the last year, we’ve proven we’re the destination for so much more,” says Scott. “In a world that’s increasingly commoditized, we fill a gap.”