I’m noticing a real change in the way Etsy talks about itself, its sellers, and its future. Before the board fired CEO Chad Dickerson in May, replacing him with former board member Josh Silverman under whose auspices another 23% of the staff was let go, Etsy’s message was focused on changing the world, what Chad termed “the Etsy economy.”
“An Etsy economy is a people-powered economy with person-to-person commerce. It’s the feel of a farmer’s market instead of a supermarket,” he told Entreprenuer in 2013. “We want to bring the Etsy ethos into the larger retail ecosystem.”
In an investor letter in April of last year, Chad described the concept further: “We believe that Etsy has the long-term potential to transform the world economy into one that is more people-centered and community-focused—one that values and honors designers and makers and one that creates stronger connections among people who make, sell and buy goods…We believe in an economy that transcends price and convenience, one that emphasizes relationships over transactions and optimizes for authorship and provenance. We call this the Etsy Economy.”
“The conventional and dominant retail model has relentlessly focused on delivering goods at the lowest price, valuing products and profits over community, short-changing the future with the instant gratification of today. I do not believe that this race to the bottom is a sustainable, successful model,” he said.
A change in messaging
Three months later the messaging couldn’t be more different. In response to investor pressure to bring stock prices up, Josh and the new leadership team have dropped the idea of reinventing commerce through person-to-person relationships. Rather than try to change the nature of commerce, Etsy is now fully participating in the current structure, ready and willing to compete on the same terms as retail behemoth Amazon.
The new messaging centers around Etsy as a place that buyers visit when they want “something special.” It’s this that differentiates the marketplace from other online shopping choices, and this alone.
In the Q2 2017 earnings call Josh states, “In a world where mass e-tailers are taking an increasing share of everyday commerce, people search for an alternative to those mass e-tailers when they want to feel that their purchase was special. That includes occasions when they are seeking self-expression. When they want to signal that they put a lot of thought and care into a purchase and when they want to have fun and be inspired. Etsy is uniquely well positioned to win those occasions.”
Etsy is suited up and ready to race to the finish line for it’s share of the specialness pie. “How big is the marketplace for special?” Josh asks. “We believe the market for special is huge.”
Discounts and free
In a recent video for sellers Josh explains that customers expect discounts and free shipping. “Last Christmas sales and coupons and free shipping were ubiquitous all across the web and buyers felt that if they were paying full price or paying for shipping then they were getting a really bad deal.”
In the Chad-era the company would’ve tackled this problem by helping sellers tell their stories more effectively, better show the details of their handcrafted processes so that customers could understand their pricing. In the Josh era Etsy is telling sellers, “We need to arm you with the tools and the context you need to be able to compete in this environment.” Josh instructs sellers to include the shipping costs in their products’ price to give buyers the impression of free shipping.
Whether you’re on board to compete with Amazon or not, Etsy is going to pull you along if you continue to sell on the platform. In July the site ran an experiment in which they combined product price and shipping costs for all products in a large swath of shops with the goal of “making buyers more likely to make purchases through the upcoming holiday season and beyond.” The experiment has since ended, but clearly this concept still holds water.
This month Etsy launched new coupon and sales tools that allow sellers to put their entire shop, or entire categories within their shop, on sale with the click of a button, and beginning on August 22, shoppers will be able to browse and shop promotions through a new “special offer” filter.
Etsy is launching its first global site sale on Labor Day weekend. An email sent to all sellers yesterday explained, “During this popular shopping weekend, many retailers run special promotions and many shoppers are looking for a good deal.” And now, the largest handmade marketplace in the world will have deals galore.
A sitewide Etsy sale is in line with Josh’s view of the role of individual sellers versus the role of the marketplace itself. “Since our sellers have relatively unknown brands and unbranded items we will aim to ensure that the Etsy brand delivers trust and reliability through the buyer experience,” he stated in the earnings call.
If there’s a sale for Labor Day, a relatively minor shopping holiday, imagine what’s to come for Black Friday. And what about Amazon’s wildly successful Prime Day? A similar event is surely just around the corner for Etsy.
Where Do We Go From Here
So now we have free shipping on discounted products from an online retailer with a trusted brand? Sure we’re reinventing commerce, but in the fashion of Jeff Bezos rather than how Chad Dickerson or Etsy’s founder, Robert Kalin imagined.
Rob told the New York Times last year, “There’s two very different versions of value. There’s the Walmart and McDonald’s version, which is price and convenience, and then there’s values, and that part is really hard.” Really hard indeed when you’re a public company beholden to shareholder pressure. It looks like they’ve given up and given in.