My partner Bailey and I created this presentation for our Media Management and Leadership class at The New School. In it, we review the current competitive scope of Etsy, and we provide potential recommendations for the company to expand its current operations.

1. Etsy
Bailey Nelson and Jessica Day

2. On retail and media - a brief note
● Etsy -- primarily an e-retailer
● Media and retail are merging and
becoming more interconnected
● Possibilities to expand on media-
related offerings; will be discussed
in recommendations

3. Goals and Mission
● “...to keep human connection at the heart of commerce”
● Maintaining a place where “creativity lives and thrives”
● Guiding principles:
○ We commit to our craft.
○ We minimize waste.
○ We embrace differences.
○ We dig deeper.
○ We lead with optimism.

4. Scope of Operations
● Global marketplace spread across six continents
● Etsy holds nearly 65 million products and includes
roughly 50 retail categories in its vendor offerings
2020 Operations Results:
● “Income from operations was $118.2 million in the
third quarter of 2020, up 730% year-over-year,
compared to a decline of 24% in the third quarter of
2019” (Etsy, Inc. Reports Third Quarter 2020 Financial Results, 2020.)
● “Operating expenses were up 85.7% year-over-year
driven primarily by our investments in marketing
initiatives, including our shift to Offsite Ads…”(Etsy, Inc.
Reports Third Quarter 2020 Financial Results, 2020.)

5. 2020 Notes -
● Marketing efforts expanded, including the company’s first international tv ad, which was
successful in driving both current and new customers to the website. Because of this, new
marketing initiatives are plausible.
● Active sellers grew 27.6 percent to 2.7 million; active buyers grew 17.5 percent to 46.4 million.
Continuing this trend in growth is a priority.
● Net income increased from $77.5 million in 2018 to $95.9 million in 2019. The exponential
growth in revenue would allow the company to explore other developments.
● According to Etsy’s Third Quarter 2020 Financial Results , “the Etsy marketplace saw an influx of
14.8 million new buyers and reactivated buyers during the third quarter - the latter being those
who haven’t purchased in a year or more.”

6. Competitive Positioning
● Target demographic:
○ 18 - 35 year olds
○ Primarily female
● Market:
○ E-retailer
○ Primarily meant for “special occasion”
situations
○ Global
○ Handmade, craft, and vintage items
○ B2C

7. Competitive Positioning, cont.’d
Competitors:
● Shopify
● Handmade at Amazon
● IndieMade
● Big Cartel
● ArtFire
● Zibbet
● Artfra
● Storenvy
● Bonanza
Etsy’s competitive advantages:
● Offers unique, handmade/vintage goods
-- no mass production
● Boasts a high volume of traffic for
vendors
● Community that connects vendors and
consumers

8. Current atmosphere
● BLM movement- consumers want
brands to speak up
● Recession (due to COVID-19) - E-
commerce spending growth is
slowing down; likely due to
greater unemployment and less
financial aid

9. Current atmosphere, cont.’d
● Pandemic - “Touch-free” retail
and ecommerce are increasing
● Gamification - Gamification is
being embraced by e-commerce
● Gaming industry growth -
Gaming giants like Twitch and
Microsoft are seeing more users,
more sales, more engagement;
possibility for advertisements
available

10. In the News -
“‘We view the pandemic as benefiting Etsy through an uptick in
digital demand while also creating a window of opportunity to
capture new customers looking to buy (COVID-19) masks,’ said
Needham analyst Rick Patel. ‘We believe Etsy is making good
progress in retaining these customers, which should fuel
future growth’” (Solovieva, 2020.)
- Due to the current COVID-19 pandemic, a lot of
retailers are struggling to profit. However, Etsy has
found itself in a dominating position due to consumers
looking to shop online and looking to explore new
hobbies - as well as many exploring their own crafts
and selling goods.
https://www.investopedia.com/etsys-etsy-resilience-through-the-pandemic-and-beyond-5084061

11. SWOT - Strengths
● Vendors and consumers across six continents -- provides diversity of
products and experiences, as well as a higher revenue
● Available for all devices, meaning interconnectivity for users is easy and
accessible
● Ability to make payments via Google or Apple Pay, providing more ability
for consumers to purchase goods
● Customer retention - according to the 2020 Third Quarter 2020 Financial
Results “of the 138 million all time buyers on the Etsy marketplace,
approximately 50% have now purchased at least once in the last year.”

12. SWOT - Strengths, cont.’d
● Customizable experience for vendors
-- from organizing to marketing to
selling -- enhancing the diversity
across the site
● Allows users to synchronize activity
with social platforms like Facebook
and Google, making Etsy a social
experience

13. SWOT - Weaknesses
● Brand relies heavily on gross merchandise sales from the U.S., meaning
vendors from other countries are put at a disadvantage if their currency
doesn’t convert well to USD
● Number of subscribers in other countries is low
● Majority of Etsy users are young adult females -- meaning fewer
demographic groups are engaging with Etsy

14. SWOT - Opportunities
● As a trusted and well-known company, Etsy can take this time to expand
on current offerings, vendors, and developments
● With the large amount of products and retail categories covered, Etsy
could expand to become a more commonplace, frequent-purchase
business -- instead of a “special occasion” business
● Developing more intelligent algorithms to provide consumers with other
product ideas could encourage more spending, and thus increase
revenue

15. SWOT - Threats
● Only 31 percent of Etsy sellers that were active in 2013 remained active
through 2016, meaning Etsy is losing its vendor subscription base.
Determining why vendors are leaving and how to retain them, while also
increasing the number of new vendors, is paramount to continuing the
diversity of products offered on the site.
● Buyer behavior trends are favoriting “shopping local”, with many
consumers dissociating e-commerce with supporting small brands.

16. Recommendations - Inclusivity
● At the height of the BLM movement in the U.S.
Etsy progressively created an Editor’s Choice page
displaying “perfect present[s], crafted and curated
by creative Black sellers.” With conversations
surrounding inclusivity becoming more prominent
it is important that Etsy maintain cultural
relevancy.
● Creating sub-categories within the menu on the
Etsy website giving selections of “Black Owned”,
“LGBTQ+ Owned”, “Woman Owned”, etc. will allow
Etsy to stand-out among other e-commerce
websites and elevate UX & expand their niche.
● This will also allow elevated results and more
specific targeted paid advertising.

17. Recommendations - Inclusivity, cont.’d
“National Bureau of Economic Research found that 41
percent of Black-owned businesses—some 440,000
enterprises—have been shuttered by COVID-19,
compared to just 17 percent of white-owned businesses”
(Brooks, 2020.)
● If Etsy is going to continue to market as “fostering
a culture of diversity and inclusivity” it is important
that this is demonstrated operationally.

18. Recommendations - Inclusivity, cont.’d
● “African-American women’s consumer
preferences and brand affinities are
resonating across the U.S. mainstream,
driving total Black spending power
toward a record $1.5 trillion by 2021”
(Nielsen Report, 2017.)

19. Recommendations - The Gaming Community
● Cast a wider net for target audience to increase revenue -- focus on the
video gaming community
● 41 percent of U.S. gamers are women
● The largest portion of gamers are between 18 - 35
● Marketing on Twitch and Youtube could increase subscription rate
○ Females make up 31 percent of Youtube Gaming audience members
○ 90 percent of gamers polled use Youtube to find tips, reviews, and other gaming-related
content
○ Twitch has almost 10 million active users on a daily basis

20. Recommendations - The Gaming Community,
cont.’d
● Almost 66 percent of American households have at least one gamer
● Still reaching out to current target audience while also expanding to other
demographics through the gaming community that we may not have
otherwise reached

21. Recommendations - Media and Gamification
“The application of typical game
elements, such as points, rules,
and competition, in non-game
contexts…. [it] Draws on our
natural desires for socializing,
learning, competition, mastery,
achievement, status, and self-
expression.”

22. Recommendations - Media and Gamification,
cont.’d● Merges retail and media
● Encourages engagement with brands
● Turns traditional retail experience
into a media and gaming experience
● Retailers see average growth of 30
percent in customer loyalty (repeat
visits and viral distribution)

23. Recommendations - Media and Gamification,
cont.’d● Recommendation - add in gamification elements to the Etsy experience --
make vendors and consumers more loyal and more connected
● Create an interconnected gamification plan that works on both mobile
devices app and computers
● Provide target goals for vendors and consumers to meet -- adds element
of competition and achievement to boost engagement rates on both ends
● Turns Etsy into a technology company -- not just a retailer -- and helps us
stand out against the competition

24. Sources for Additional Information
● 6 Ways the Coronavirus Pandemic Has Forever Altered the Retail
Landscape
● African American Women: Our Science, Her Magic
● Consumers Want Retailers to Do the Right Thing
● Etsy Alternatives
● Etsy Proxy Statement - 2020
● Etsy SWOT Analysis
● Etsy’s Comeback: A Case Study on Focus and Prioritization
● Factors that Help Etsy Stand Out in the E-Commerce Space

25. Sources for Additional Information, cont.’d
● Female Gamer Statistics
● Gamification in Business in 2019
● More than Half of Black-Owned Businesses May Not Survive
● Recession Watch: E-Commerce Spending Growth Has Already Slowed
● Retail Embracing Juneteenth and Black Lives Matter Demonstrates Its
Commitment to Inclusion and Diversity
● U.S. Video Game Gender Statistics
● The Top Ten Video Game Statistics Marketers Must Know
● Video Game Industry During the Coronavirus
● Why Retailers Should Consider Gamification to Boost Engagement