By Jeffrey Marcus
Shares of the e-commerce shop Etsy spiked Tuesday after the company announced second quarter earnings, and though the stock has returned to more familiar levels Wednesday, it has more than doubled its price this year.
The company's CFO pointed to a concerted effort to help Etsy's sellers ー mostly self-employed women working from home ー to connect with consumers who are most likely to establish a loyal relationship with the online retailer.
“When you think about occasions in life that are meaningful, whether that’s a birthday or a holiday or your first apartment ー those are occasions when you want to come find something unique and extraordinary," said the CFO, Rachel Glaser. "You wouldn’t necessarily think about buying that at a large, e-commerce platform."
To help consumers think of Etsy, Glaser told Cheddar that the company was being thoughtful about its marketing budget and has improved the site's ability to promote special products from its 2 million sellers.
"Marketing was not a core part of the strategy previously," Glaser said Tuesday in an interview with Cheddar. "We’ve been gradually turning the dial on performance marketing."
The careful, but aggressive marketing strategy includes Google product listing ads and search engine marketing, and Glaser said that 16 percent of gross merchandise sales in the second quarter can be traced to paid marketing.
That means 84 percent of sales are organic.
“We’ve been making it much easier to find and buy things on Etsy," Glaser said, adding that the site announced a price increase for sellers, which would boost incremental revenue that can be put back into marketing.
"We'll keep spending on performance marketing where we see we can get he positive returns," Glaser said.
Glaser said Etsy's efforts are as much to help consumers find just the right product as they are to help its sellers ー 87 percent of whom are women and 97 percent of them work from home.
“They’re artisans, they’re not business people, per se, so they need our help to do all the aspects of the business of being a seller," Glaser said. "So the tools we can provide them to help manage and grow their business are essential.”
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