Dive Brief:
- As it competes against e-commerce rivals, Etsy announced its first buyer membership program, dubbed Etsy Insider, on Wednesday. Etsy will launch a closed-beta version of the program in mid-September to select customers in the U.S., who will have the option to purchase a seasonal or annual membership.
- Members will receive free U.S. domestic shipping “on millions of items,” along with a birthday bonus and access to special discounts and select merchandise, among other benefits. Members also receive a limited-edition annual gift designed by an Etsy seller.
- The program comes at no cost to Etsy sellers. Instead, the company will cover benefits through its membership fee, including free shipping.
Dive Insight:
Etsy announced its new buyer membership program on the same day it released its second-quarter earnings. For the period, gross merchandise sales were down 2.1% year over year to $2.9 billion, while revenue was up 3% to $647.8 million compared to the year-ago quarter. Net income in Q2 was down 14.4% to $53 million.
The company’s Insider loyalty program is a key initiative for the year, CEO Josh Silverman said on a Wednesday call with analysts. Etsy has conducted rounds of research and “competitive audits” that will inform the program and rollout. “We’ll test, learn and iterate and are optimistic that, over time, Etsy Insider can be a needle mover, driver of buyer frequency and Etsy love,” Silverman said.
Etsy positions itself as a marketplace where shoppers can find unique, handmade items. Last month, the company announced a series of updates across its policies and shopping experience. The refresh included a revamped home page and the implementation of standards that clarify that products must be made, designed, sourced or handpicked by sellers. The company also debuted an ad campaign that addressed concerns regarding the rise of automation and mass-produced goods.
With the launch of its new membership program, Etsy said it wants to focus on preserving creativity and the human touch on its marketplace.
“We believe Etsy Insider can become an important lever in turning our strong brand affinity into deeper customer loyalty,” Simona Shakin, vice president of product and retention marketing, said in a statement. “We’re confident Etsy Insider will make it easier and more joyful than ever for buyers to seamlessly discover pieces they will love from real people they’re proud to support.”
While Etsy is emphasizing the artisans on its platform, the company has faced fierce competition from other e-commerce giants. At the start of the year, Silverman said that Amazon, Shein, Temu and Walmart are taking up sizable market share. Ensuring that mass-produced items are not visible on the site is a big focus for the company. “It’s bad for the brand. And it’s not helpful for our sellers in terms of price competition,” he said at the time.
