Josh Silverman yesterday outlined four strategic imperatives during Etsy Q1 earnings conference call which aim to support Etsy merchants. First, a best-class search and discovery experience. Second, enabling meaningful human connections. Third, building a trusted brand. Fourth, leveraging Etsy’s vast global collection of unique items.
Search and discovery
Speaking during the conference call, Josh said that search and discovery continue to represent a key focus area for Etsy. With over 60 million items, simple searches on the site often yield an overwhelmingly large set of search results. In fact, 1/3 of all searches generate over 10,000 items. This means that more than 80% of purchases via search come from the first page of search results. He said that Etsy’s goal for 2019 is to take the vast sea of listings and make it feel more manageable and curated for buyers.
We also have a significant runway, said Josh, to increase one of the most special parts of Etsy, the human connection. Transactions that feature a conversation between an Etsy buyer and seller converted 13x the normal rate and 200% of the typical price.
In the Q1 quarter, Etsy made several improvements to their conversation tool, making it easier for buyers to message sellers directly from a shop and listing pages, and helping sellers to answer more efficiently.
During the first quarter, Etsy also continued to educate their sellers about the importance of shipping prices and practices. He said that Etsy’s overarching goal for 2019 is to reset buyers’ perception of shipping on Etsy in order to remove friction and encourage buyers to shop on the marketplace more frequently.
Building a trusted brand
In spite of the pullback in marketing spend, said Josh, Etsy’s active buyer count hit 41 million in the first quarter, demonstrating strong growth. He believes that Etsy has a significant opportunity to build greater awareness and relevance through higher funnel advertising. Josh said that Etsy’s buyer NPS scores are high, and buyers report that they feel strong advocacy and loyalty towards Etsy.
Last week, Etsy launched a new TV campaign, which is airing on national cable and some targeted prime time television networks and on selected digital channels. Etsy’s new moat messaging focuses on buying things that matter to shoppers, highlighting Etsy’s great merchandise in a way that shows more relevance more often. He believes that TV, cable and digital video are all potentially great channels for Etsy to reach broad audiences, further enhancing loyalty to their brand and without a dependency on referral sources, like Google or Facebook.
Josh started by saying, that Etsy are really encouraged by what they’re seeing in the UK and now Germany as well, where both of those markets are now more than 50% domestic trade. So buyers buying in the UK, said Josh, more than 50% of their purchases come from sellers in the UK – that’s a really encouraging sign.
We’d love to see that repeated in France and Australia and Canada, said Josh, or growing our presence in India. He pointed out that Etsy are focused on an export strategy in India. Those are the core markets Etsy are focused on. Josh said that he wants to be careful about not spreading Etsy too thin with their investment dollars, particularly around the buying side, around things like performance marketing to drive buying activity.
I do want to take a minute to highlight that a global marketplace is a wonderful thing, said Josh, and we see a lot of benefits from being global, and there’s a great amount of activity happening outside of those core markets that is terrific.
For example, Etsy are seeing wonderful sellers in Lithuania and Ukraine that are selling clothing, apparel and bedding among many other kinds of products. However, in those categories, in particular, Etsy are seeing real vibrancy, and it makes the ecommerce experience much richer to be able to buy these great products at a great value all around the world.
In Israel, Josh said that Etsy are seeing wonderful things in a bunch of different categories, including shoes, leather shoes coming out of Israel. Lots of different countries that have specialities in different craft make the market better.
In summary, said Josh, Etsy are very pleased with their strong start to the year. He said that Etsy are excited about their ability to grow the marketplace, while simultaneously driving profit margin expansion. Josh said that Etsy are rigorous in allocating resources to those that will produce the highest value. With a balanced portfolio of strategic investments across product, marketing and optimised infrastructure, said Josh, we believe we will continue to deliver strong and sustained growth.