Etsy CEO Reveals Secrets to Holiday Season Success Amid Covid-19
Table of Contents
- Introduction
- Changes in Holiday Shopping
- Importance of Being Together
- Anticipated Shift in Shopping Season
- Etsy's Advantage
- Cyber Sale Extension
- Resurgence of Second-Time Buyers
- Expanding Multi-Channel Sales
- Maintaining the Ecosystem
- Success on Etsy vs. Other Platforms
- Retailers' Sales and Momentum
- Mask Sales Deceleration
- Growth of Non-Mask Sales
- Popular Non-Mask Products
- Conclusion
Changes in Holiday Shopping Trends
The holiday season is always a busy time for retailers, and this year is no exception. However, there are notable differences in how businesses are approaching the holiday season and how consumer behavior is changing. The flow of traffic on online marketplace Etsy, for example, has taken on a different pattern compared to previous years. In this article, we will explore these changes and delve into the ways in which consumers and retailers are adapting during this unique holiday season.
Importance of Being Together
The ongoing pandemic has created limitations on in-person gatherings, making it challenging for people to spend time with their loved ones during the holidays. This has increased the importance of finding alternative ways to foster a sense of togetherness and show care for others. One such way is through gifting and celebrations. With physical distance preventing physical presence, it becomes crucial to find meaningful ways to connect and make others feel valued.
Anticipated Shift in Shopping Season
One significant change that has been predicted for this holiday season is the potential early start of the shopping season. E-commerce providers, in particular, have expressed concerns about the possibility of overwhelming their supply chains and postal services if a massive flood of traffic occurs last-minute. As a result, many e-commerce players have either pulled back from Cyber Week entirely or stretched out their sales over a more extended period. Etsy, on the other hand, enjoys a significant advantage in this regard, as it is not reliant on a singular supply chain or fulfillment centers. With 3.7 million sellers who produce and ship their products directly from their homes, Etsy is well-prepared to handle the surge in demand.
Etsy's Advantage
Unlike other online platforms, Etsy's decentralized model allows it to offer unique advantages to buyers and sellers alike. With millions of individual sellers, each producing and shipping products directly to the buyers, Etsy can maintain a diverse catalogue of products and avoid potential bottlenecks. As a result, the platform can fully leverage the Cyber Weekend, expanding the traditional eight-day sale to a ten-day event. By stretching out the sale period, Etsy ensures that customers have ample opportunity to find the perfect gifts while avoiding any last-minute shopping frenzy.
Resurgence of Second-Time Buyers
One interesting trend observed by Etsy is the resurgence of second-time buyers, or those who had previously purchased from the platform but had not returned for some time. Approximately half of the 69 million people who have made purchases on Etsy over the past 12 months are returning customers. This highlights the loyalty and satisfaction that Etsy provides to its buyers.
Expanding Multi-Channel Sales
While some may worry about sellers leaving Etsy to explore other sales channels, the reality is quite the opposite. Etsy believes in supporting its sellers' growth, even if that means expanding their reach to other platforms. Sellers who decide to go multi-channel often experience accelerated growth on Etsy while maintaining a presence on other e-commerce platforms. The reasoning is simple - succeeding on Etsy is already challenging for individual sellers. Setting up a separate shop and establishing a brand beyond Etsy requires significant investments in marketing and advertising, making it hard to achieve profitability. Etsy's brand, built on trust and attracting millions of buyers, remains unparalleled, making it the forefront choice for many sellers.
Maintaining the Ecosystem
Etsy recognizes the importance of its ecosystem and works to ensure that sellers remain happy and successful. The platform understands that sellers may choose to expand to other channels, and that is entirely acceptable. In fact, Etsy has observed that sellers who embrace multi-channel selling often experience increased sales on Etsy as well. The platform's unique value proposition, with its broad buyer base and emphasis on supporting individual artists and creators, cannot be easily replicated elsewhere. Etsy provides a brand umbrella that ultimately benefits sellers by attracting more customers and driving sales.
Retailers' Sales and Momentum
The fourth quarter is a crucial period for retailers, and early reports indicate that sales have started strong for many businesses. Abercrombie, Fish Dick's Sporting Goods, and numerous others have noted positive momentum in their business. As for Etsy, the company's last update, published at the end of October, indicated that sales remained robust, further supporting the early start of holiday shopping. The demand for items traditionally associated with the holiday season, such as Christmas tree ornaments and holiday gifts, is starting even earlier than usual, possibly indicating a shift in consumer behavior.
Deceleration of Mask Sales
One interesting trend noted by Etsy is the deceleration in mask sales. The platform's sellers generated over $600 million in mask sales during the second and third quarters. However, month-over-month data suggests a gradual decline in demand for masks. On the other hand, sales of non-mask products have remained strong, with a year-over-year growth rate of 97% in both the second and third quarters. This steady growth in non-mask sales is a positive sign for Etsy's sellers.
Popular Non-Mask Products
Various categories besides masks are performing exceptionally well on Etsy. Home furnishings, for instance, witnessed over $2 billion in sales during the 12 months leading up to the end of the third quarter, reflecting a 150% increase compared to the previous year. Clothing, jewelry, accessories, pet products, and toy products also experienced significant growth. The current environment has led people to spend more time at home with their families, thereby increasing the demand for products that can be enjoyed collectively. Unique items like chess sets inspired by Manhattan skyscrapers and personalized gift baskets have garnered attention from buyers.
Conclusion
The 2020 holiday season is undoubtedly different from any before, as the ongoing pandemic has reshaped how people approach shopping and celebrations. Despite the challenges, Etsy has emerged as a platform that caters to the changing needs of buyers and sellers alike. With its decentralized model, diverse product catalog, and focus on fostering genuine connections between creators and customers, Etsy is well-positioned to thrive during these unconventional times. As the holiday shopping season continues, it will be interesting to see how consumer behaviors further evolve and how retailers adapt to meet the demands of this unique year.
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