Etsy has been generating spectacular results since the pandemic’s onset. As the fourth largest e-commerce site, by customer visits, last year’s third quarter revenue soared 102% year-over-year to $451.5 million. And while growth has come down recently, their loyal customers are shopping more often and spending more money when they do. Sales per buyers jumped from $37 in second quarter of 2020 to $46 in the second quarter of this year. This was the backdrop for third-quarter reporting at the close of Wednesday’s trading session.
Beat The Street
Etsy had been targeting revenue of $500 million to $525 million in the third quarter. Wall Street was forecasting revenue will rise to $518.9 million from $451.5 million the year before. Etsy beat both, coming in with quarterly revenue of $532 million on gross merchandise sales (GMS) for three months ending September 30, 2021, of $3,105,889 billion, up 17.9% when to compared to 2020 sales for the same period of $2,633,927 billion.
Esty’s CEO Josh Silverman was extremely upbeat at the third quarter reporting, after Wednesday’s market close, saying “Last year, Etsy dramatically outperformed e-commerce industry benchmarks, and now, in 2021, we’re lapping that performance with flying colors, reinforcing the significant market share gains we have made.”
For the nine months ending September 30, 2021, gross merchandise sales were up 39.2 % to $9,290,551 from $6,676,001 for the same period in 2020. Active sellers were up 102.7% and active Buyers increased by 37.8%
Silverman went on to say, “Our excellent third quarter results further reflect that we’re moving the needle on frequency, and that many of the millions of buyers who found or re-found Etsy during the pandemic are sticking with us and performing even better than historical cohorts.”
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Less Pain from Supply Chain
As I recently reported, given the supply chain pains that retailers of every stripe are contending with, Etsy is positioned for a strong holiday season. Many if not most of the sellers are less constrained by the volume of offshore goods in long oceanic queues off both coasts.
Silverman described it as “their highly distributed supply chain, with creative entrepreneurs located around the globe, making them ready to serve the world in ways many others can’t this holiday season.” He stated, “we anticipate that in fact, our guidance implies that the fourth quarter will be our best GMS quarter ever.”
Trending, Very Much in Etsy’s Favor
Prevailing trends and changes in consumer values puts the wind at their backs. Crafts made; one-of-a-kind items are becoming more highly coveted. Additionally, our craving for vintage, and collector items are off the charts. My Forbes.com colleague, Bryan Pearson recently reported “A second-hand market for luxury watches is mainstreaming fast because, despite rising global demand, the makers of the timepieces are maintaining tight production levels.”
Searching “Rolex” on Esty revealed a-near endless stream of four and five-figure timepieces. A ninety’s vintage Rolex Daytona, Black Dial Zenith Men’s Watch was priced at a cool $49,800, including free shipping (surprise). However, what get my juices flowing are craft items like the hand cut stone bowls sculpted from Alabama Limestone, for a more approachable $325.00.
Eye on Design
For the uninitiated, Etsy is a treasure trove of new, used, one-off, and crafts made items in a myriad of categories. Sellers run the gamut from obscure, one-off artisans, to seasoned and renowned creators and international sellers. With over 1.93 million items for sale, by 5.2 million active sellers and 90.5 million active buyers, it is easy to spend many hours and dollars on the site.
In late September, Etsy introduced “the Etsy House” an interactive AR (augmented reality) virtual tour through an uber-cool, contemporary home. It invites the visitor on a 360-degree tour of eleven interior rooms and an outdoor courtyard. Your cursor reveals the source, price, and details of a host of Etsy’s Design Award-winning furniture, holiday décor and accessories.
Etsy’s third quarter reporting also reiterated a pledge of being Net Zero by 2030, with planet-friendly packaging options to help reduce Scope 3 greenhouse emissions, and to “build buyer awareness of Etsy as a sustainable place to shop.”
Diversity is also a core value for the brand. Etsy is strongly committed to economic justice and helping historically marginalized communities. Their newly launched Etsy Uplift Initiative is designed to open doors and provide opportunities for creative entrepreneurs, world over. This includes providing funds to the disenfranchised makers, to curating Editors’ Pick pages that feature diverse sellers and their wares.
One such example is Etsy’s supporting a launch of almost forty shops representing heritage craft makers from across the Southern United States. “In its first six months, the Gee’s Bend quilting community generated more than $300,000 in sales through their Etsy shops” and within 24 hours of the Etsy launch, many of the quilter’s shops were sold-out. This represents a movement toward “Maketailing” that is only in its infancy, but is becoming a retailing staple, thanks to the efforts of companies like Etsy.