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Thu Nov 24 2022 08:29:41

Etsy Will Adopt a Vertical Strategy in 2023

By: Ina Steiner

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Etsy is now big enough that it can take a more vertical strategy in 2023, according to the company's CEO Josh Silverman. A "vertical" strategy means treating certain types of products differently, as opposed to all categories having the same features, policies, and level of marketing attention. 

The CEO's revelation came during a Wall Street presentation on Monday during the 2nd Annual Needham Consumer Tech / E-Commerce Virtual Conference. Also in attendance was Etsy Chief Financial Officer Rachel Glaser, and both executives fielded questions from Needham Senior Analyst Anna Andreeva. 

During the virtual event, Josh Silverman said the following about the vertical approach coming next year:

"We still have been working almost exclusively on horizontal capabilities, meaning we launch something that works for everything all across Etsy.

"We are beginning as we look in to 2023 to think more seriously about investing in some vertical experiences.

"Like what are some things you need when you're buying home furnishings that are specific to the category of Home Furnishings.

"And I think we'll find that there are some areas where building category-specific features are going to be valuable. And we're now big enough. We've had so much opportunity in these horizontals that it's hard to prioritize anything for a vertical, but Home Furnishings alone is billions of dollars of sales on Etsy now. So just making Home Furnishings better starts to be worth investments in verticals. 

"I think things like getting the taxonomy and the browse views, using that as an example, is the kind of thing were looking at a lot more seriously."

Etsy rival eBay has been taking a vertical approach for several years with its "focus categories" strategy in Trading Cards, Sneakers, and luxury goods such as Handbags, Jewelry, and Watches. It has also developed category-specific features (Authenticity Guarantee and the eBay Vault, for example), and it has also been heavily promoting and marketing those categories.

Sellers who are in eBay's "focus category" sweet spot benefit from the marketing investments the company has been making - but maybe not so much sellers in other categories. However, eBay has said all categories benefit because its strategy attracts "enthusiast" buyers who spend money in other categories as well. 

One obvious reason for marketplaces like eBay and Etsy to prioritize certain categories over others is in the hope of generating sales of higher-priced goods. Silverman described Etsy's "cushion to couch" approach in 2019. As we wrote at the time, should Etsy give more weight to lower-priced goods (the "cushion"), since that would boost conversion rates? Or should it give more weight to higher-priced goods (the "couch"), since that would boost gross sales? Silverman's point was that the company should be strategic about what factors go into the search algorithm.

But there are more sellers selling lower priced goods (cushions) than higher priced goods (couches), and they enable marketplaces to offer the broad selection of goods needed to attract shoppers to their platforms.

To understand the approach eBay took with its vertical strategy to get an idea of what could be in store at Etsy, here's a presentation from September's eBay Open event where three executives discussed the changes to luxury goods categories - Handbags, Watches, and Jewelry.


Let us know what you think of eBay and Etsy's approach when it comes to a "vertical" approach to features and promotional activities.

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Readers Comments

Perminate Link for Etsy Will Adopt a Vertical Strategy in 2023   Etsy Will Adopt a Vertical Strategy in 2023

This user has validated their user name. by: The End

Thu Nov 24 09:33:56 2022

Vertical Schmertical.
It's all just so STUPID.
Potentially conjuring reasons to take even more of our profit.
The REAL problem is : Silverman and Glaser have so much free time (thanks to us) to "engineer" more "Profit off-loading" schemes.
We need at least 2 new selling venues that cater specifically to the interests of the artist / seller. Non corporate. Private companies.

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by: LDWCallsOut This user has validated their user name.

Thu Nov 24 10:42:32 2022

Although it was never mentioned in a post on this site, recently Etsy ran a test where listings did not reveal the location where the item would be shipped from.  Most shady shops do not post their location where it appears on the Etsy shop's main page.  This test meant shoppers were kept totally in the dark about some sellers.  I was in this test for about a week, after which the ship from locations reappeared.  I found it interesting that Etsy would consider concealment of the ship from location a benefit to shoppers -- maybe along the lines with forcing resellers to pretend their junque products are handmade or vintage?

The place I live is a retail wasteland, so everything i own was purchased online except for perishable food items and my prescription meds.  I have no issues with well-made items produced in any part of the world, but legit merchants don't conceal the country of origin for their wares.  Unlike Etsy.  Products on Etsy listed as ''handmade'' are just as likely to be mass made with no design input from anyone connected with the shop.  More than half the ''vintage'' listed on Etsy is NEW.  I purchased about $10K worth of new home furnishing items in the past two years (and I'm not done buying!) and LOVE everything -- all purchased online.  I wouldn't dream of shopping for quality home furnishings on dishonest Etsy (dishonEtsy for short).  Silverman and his gang of con artists are delusional about how little effort online shoppers put into picking and choosing a pricy item for their homes.

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by: quirkyantiques This user has validated their user name.

Fri Nov 25 15:30:42 2022

Here's a thought-maybe if Etsy got rid of the whole tagging scam which is a fancy term for keyword spamming, then MAYBE people would be able to find what they're actually searching for on Etsy search in the first place. The rest they should just leave alone. Buyers aren't stupid-if they want a vase they're gonna search for a vase. The issue is overburdened pages with non relevant items due to key word spamming in "tags"

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by: Gumball This user has validated their user name.

Mon Nov 28 00:55:57 2022

This is hilarious! But then most Ebay or former Ebay CEOS are vertically-minded. Ebay took the vertical approach some years back and has went downhill ever since. It seems none of  Bain's CEOs are good at math. Verical is narrow  and horizontal is wide. Why they want to stop spreading and concentrate on one or two lines is beyond me. I notice Amazon and Walmart have not adopted such stupidity and they keep on spreading their sites and wealth.  

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by: PinkCloud This user has validated their user name.

Mon Nov 28 01:48:48 2022

I think there's some faulty thinking on etsy's part. They assume that people buying high priced furniture, let's say a couch,  are going to also think of Etsy to buy a pillow for the couch. Unless etsy continuously shouts ... we sell pillows these buyers will go somewhere else for that.  And I think what they've really missed ... is when the sellers stop selling their pillows they'll go somewhere else as well.  Etsy needs to decide what they want to sell and tell us so we'll know we need to do something else.   I've had an advertising client that once said to me, I don't want to be the $9.99 carpet cleaning guy.  I want to sell higher priced jobs with better equipment, do fewer jobs so I need less help and if I market it well I'll sell more cleaning jobs.  And he did. But never once was he thinking... hmmm I'm going to advertise high priced jobs but I'll still get calls for this can of $6.99 DIY carpet spray.  Vertical means just that .... vertical.  You can't be all to everyone and expect to get the sales.  I think at some point someones going to build a better marketplace for the lower and mid range items and etsys going to be shocked and so sad.  Without all the numbers, reports and stats it's hard to say which ''vertical'' they should choose but I really think they can't play middle of the road.  

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by: Zigmund This user has validated their user name.

Mon Nov 28 02:25:39 2022

what about a Diagonal experiences ?
and maybe some cross-directionals, aka "drinkdrunk" approach ?

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by: kvl1 This user has validated their user name.

Mon Nov 28 07:59:31 2022

Zigmund: Loved your comment. Thank you for my morning chuckle!

I really hate "Corporate Speak." I hated it when I was working in the corporate world, and I hate it even more when eBay and Etsy execs use it. Ridiculous!

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by: Marty2020 This user has validated their user name.

Mon Nov 28 09:04:52 2022

Is there a word "ecosystem" in the article? If not, it is not worth reading.

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by: I_Fix_Dolls This user has validated their user name.

Mon Nov 28 09:26:41 2022

Interesting that Carpets , and room size rugs, come from India and places like Turkey. They are usually listed as handmade, even though it is really a factory with low paid workers making the rugs. Also a lot of brass vases etc come from India. Maybe Walmart is is not buying enough stuff from there to resell, and Silverman made a deal? I would not doubt anything these days. Everything he implements seems aimed to shut out all the small, independent sellers in the US and UK.

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This user has validated their user name. by: The End

Mon Nov 28 09:55:19 2022

Etsy servers are running dangerously slow.
My notice of shipment to my customer came almost a half a day later.
Not Kool.
Etsy is slowly making my business appear unprofessional.
Really Not Kool.
I'll have to compensated for Esty's Damage to my business.

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This user has validated their user name. by: The End

Mon Nov 28 09:55:43 2022

Etsy's Damage to my business.

Perminate Link for Etsy Will Adopt a Vertical Strategy in 2023   Etsy Will Adopt a Vertical Strategy in 2023

This user has validated their user name. by: The End

Mon Nov 28 09:57:07 2022

I'm so pissed I can't see straight....

Perminate Link for Etsy Will Adopt a Vertical Strategy in 2023   Etsy Will Adopt a Vertical Strategy in 2023

by: cvsharkey This user has validated their user name.

Mon Nov 28 10:44:43 2022

"Etsy" just doesn't mean "Etsy" anymore......it's become a shlock market & now wants to add high-end manufactured goods? WTH?

At one time Etsy was synonymous with HANDMADE GOODS.

PS I won't do business with ANY site that does not disclose where they are located. To not disclose this usually means they're in China.  But even is they aren't--they don't do themselves any good by not being transparent. Period. If they have a "Contact Us" page & it's the blank response form and nothing else--I'm gone.

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by: NYSteve This user has validated their user name.

Mon Nov 28 12:26:43 2022

@The End, well said, but permit me to paraphrase
'zzzzzzzzzzzzzzzz'

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This user has validated their user name. by: Rexford

Mon Nov 28 14:43:27 2022

Did anyone even need to read further after reading "Wall Street presentation"?

Some people dance for Jesus.   Silverman dances for Wall Street.  He has perfected his personification of John Donohoe. And they are both lousy dancers.

Little eBay lives.  

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This user has validated their user name. by: The End

Mon Nov 28 16:19:50 2022

NYSteve :
Good One  :o)

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by: Stone Cutter This user has validated their user name.

Mon Nov 28 23:02:30 2022

***Outdated systems will run slow***

“Etsy servers are running dangerously slow.”

I have a two year old iMac and my system shows no slowdown whatsoever. I posted 6 new pieces on Saturday, they all sold in 3 hours and the whole process was quick to list new pieces and to process new pieces.

Maybe it’s time for a new computer system with more RAM.

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by: Stone Cutter This user has validated their user name.

Mon Nov 28 23:20:27 2022

*** Etsy knows where it makes its money ***

As I’ve said many times “who is your customer, rich vs. poor”? The best selling jewelry on Etsy is the higher priced artisan pieces as “professionals”continues to have the money to spend during a spike of inflation.

This past weekend, my activity for my artisan jewelry shop was the best activity EVER on Etsy. I was shocked! I literally received double the views I normally do and my pieces sold FAST.

As I said many times before....” There is no money selling to people with no money”.

I work my shop part time, however I track other sellers who are making gross profits over 10k monthly while selling jewelry at $300+..all HANDMADE and one-of-a-kind.

Etsy knows where it’s making it’s money. To focus on the “repeat” high end consumer is a smart move for Etsy.  

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by: Stone Cutter This user has validated their user name.

Mon Nov 28 23:28:20 2022

***Latest economic data...retail data crazy good for weekend***

Retailers report that over this past Thanksgiving weekend, sales were strong for both mall and e-commerce retailers. Consumers still have money to spend and are finally feeling “free” from Covid.

I’m not surprised Etsy wants to focus on higher end pieces. It’s a smart business move.  

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This user has validated their user name. by: iheartjacksparrow

Wed Nov 30 16:05:41 2022

@Stone Cutter - I heard on the local news that on Black Friday online sales totaled $9.1 billion.



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