The trend: Ecommerce players have come down from their pandemic highs—but some, like eBay and Etsy, are finding success by leaning into their respective niches of handmade, affordable items and collectibles. On the other hand, Peloton and Wayfair are struggling as high interest rates and inflation erode demand for home goods and expensive connected fitness devices.
Etsy leans into value: While Etsy has managed to preserve most of its pandemic gains, the marketplace is feeling the impact of inflation and a strong dollar. To entice deal-seeking shoppers this holiday season, the company plans to lean into its “message of extraordinary, handmade, [and] affordable,” CEO Josh Silverman said on the company’s Q3 earnings call.
- The company's Q3 revenues and earnings both beat expectations.
- Consolidated gross merchandise sales totaled $3 billion in Q3, marking a 3.3% year-over-year (YoY) decline —although a 0.7% improvement on a currency neutral basis.
- The company is enhancing search and improving personalization to make it easier for shoppers to find deals and relevant products.
Despite headwinds, Etsy’s business model is relatively solid. Unlike Amazon, Etsy doesn’t offer fulfillment services, reducing its overhead significantly. And while seller fees make up the majority of Etsy’s revenues, its growing advertising business adds stability to its bottom line.