Etsy has announced plans to introduce its inaugural loyalty program in September, as part of efforts to increase sales and attract casual shoppers. The New York-based e-commerce platform will invite selected customers to join the program, called Etsy Insider, offering benefits such as free shipping nationwide and access to discounts.
Raina Moskowitz, Etsy’s chief operating and marketing officer, emphasized the goal of encouraging customers to begin their shopping journeys on the platform rather than visiting only for specific items.
The initiative comes at a time when Etsy has witnessed a decline in gross merchandise sales, prompting the company to explore new strategies to revitalize its business. While the pricing details of the loyalty program have not been disclosed, Moskowitz hinted that the monthly fee will be equivalent to the cost of a latte, with the possibility of a broader rollout depending on consumer feedback.
Despite experiencing a surge in demand during the COVID-19 pandemic, with customers turning to the website for unique items like artistic face masks, Etsy has encountered challenges as pandemic-related restrictions eased and inflation impacted consumer spending habits. The company faces increasing competition, including from online retailer Temu, owned by Chinese e-commerce firm PDD Holdings.
In the first quarter of this year, Etsy reported a 5.3% decline in merchandise sales on its marketplace compared to the same period last year. Additionally, consolidated sales, encompassing purchases from its other online platforms, decreased by 3.7%, following a minor decline the previous year.
The company’s stock value has plummeted by nearly 78% since late 2021, prompting a workforce reduction of 225 employees, representing around 11% of its staff. Neil Saunders, managing director at GlobalData Retail, highlighted challenges faced by Etsy, including a “junkification” of the platform, characterized by an influx of miscellaneous items alongside authentic artisan products.
Saunders also noted concerns about Etsy’s search functionality potentially dissuading customers and praised the company’s recent efforts to refocus on its artisanal origins amidst a competitive e-commerce landscape. These endeavors aim to address navigational issues and enhance the platform’s appeal to shoppers seeking unique and quality goods.
