Reminders, teasers and lists: How Etsy is tackling the holiday shopping season

On Etsy’s online store, the company has added several new gifting-focused features, including an organizable gift list to track gift ideas for different recipients and automatic gift reminders to help buyers buy gifts on time. Another feature, called gift teasers, lets customers send a text or voice message to a recipient when a gift is ordered, teasing what it is when it will arrive.

“This year, gifting is a big focus for us,” Moskowitz said. “We are introducing a lot of features to reduce stress around the season, to make it more fun and easier.”

The reminders and gift teasers are both intended to help avoid a common gift-giving problem: waiting till the last minute and having a gift arrive after the holidays are over. The two-day shipping offered by Amazon draws many last-minute gift shoppers who need a gift fast. Etsy’s products, many of which are handmade and sold by single-person sellers, can’t always offer the same speed. The teasers and reminders aim to help dissuade buyers from going with a faster, if less personalized, option like Amazon.

“Sometimes you don’t want to sacrifice the specialness of a [handmade] gift, but you want to let them know it’s on its way and will be arriving later,” Moskowitz said. “That said, we have made a lot of progress on our delivery timing. [Since last year,] we offer a delivery date guarantee.”

Etsy has more than 7 million sellers, over 80% of whom are women, Moskowitz said. The company’s gross merchandise sales for items identified as gifts are already up 4% this year. Etsy’s quarterly revenue rose 3% to nearly $650 million last quarter. Its fourth quarter tends to be its biggest sales period. Last year, fourth-quarter revenue was over $200 million higher than the previous three quarters.

“In addition to GMS growth, we’re utilizing monthly U.S. buyer surveys to gauge the impact of our gifting strategies, and this data shows a significant year-over-year increase in prompted consideration of Etsy for gifts,” Etsy CEO Josh Silverman said on the company’s second-quarter earnings call in July. “We’re also tracking an increase in perceptions that Etsy makes it easy to find a great gift.”

In addition to the pop-up and the new gifting features on the site, Etsy is rolling out gift cards in pharmacies and grocery stores across the country this season — a first for the company. It will also run a TV ad campaign focused on gifting, in the U.S., the U.K. and Germany.

Moskowitz said the biggest challenge the company is facing this holiday season is around search visibility. Fifty-seven percent of shoppers in the U.S. now begin their product search journey on Amazon.

“We have an incredible inventory of unique, handmade gifts,” Moskowitz said. “You can’t find these things anywhere other than Etsy. We do a good job of serving those up to you when you first come to the site, but how do we become the first place you come looking for ideas? That’s the biggest opportunity we have right now.”

In the past, Etsy’s search algorithms ranked search results based on the likelihood of conversion, but that meant that a few of the most popular sellers were dominating search results and consumers were seeing many similar or identical results. Since then, Etsy has cut the number of searches where the majority of results are from a single seller in half.

“We’re incredibly excited about what this might mean for future visitation as buyers see a more diverse and higher quality set of listings each time they visit Etsy,” Silverman said in July.