Etsy: Market Maker for Makers
Etsy was founded in 2005 as a place where makers could sell their wares, a kind of virtual craft fair. In recent years, Etsy has become one of the most culturally vibrant brands in the US, landing at the #7 spot on our list. How did that happen?
Etsy, offering sellers the ability to earn income from their creations, is adding fuel to the growing Maker phenomenon. But it’s not just about empowering makers. Etsy has created a new kind of business ecosystem, where makers, sellers and buyers are linked in a virtuous virtual circle of collective empowerment. Etsy is keenly endorsed by consumers – and especially Millennials — as the way of the future, scoring particularly high as Exciting. The company is felt to be shaking things up, and one who will gain importance in the future.
They call it the “Etsy Economy,” and it is impressive – a member community of 40 million, over 1 million sellers, and sales over more than $1 billion in 2013. While their roots are as a marketplace for strictly handmade goods, over the past year they’ve made some dramatic changes to their business model enabling the brand to give opportunities to more sellers and grow its community more rapidly, shifting from a strict policy of requiring all goods be handmade, to one based on values of authorship, responsibility, and transparency. They’ve also launched Etsy Wholesale as a way to help sellers sell directly to retail stores, and an in-person payment system that makes it possible for sellers to grow beyond their on-line presence.
Etsy is in many ways the ultimate story catalyst. For the makers / sellers it’s all about people connecting around the world to buy and sell ‘unique goods.’ Sellers get to share their unique individual stories. And Etsy is a brand that is about both consuming and producing, so people on both sides of the commerce equation get to feel good about being a part of the community. As the brand states: “Our mission is to reimagine commerce in ways that build a more lasting and fulfilling world.” The “Etsy Economy” is one that “values and honors the people who design and make goods, is transparent about the way they are made, and connects the people who make, sell and buy them.” Basically, a place where people who are creative and entrepreneurial can find ‘meaningful work’ and markets for their goods. In this sense Etsy is like other top VIBE brands that are building strong networks and becoming integral parts of people’s lives.
Etsy is working to go beyond its core community and enable people to participate both as sellers and as customers. In 2013 it started a Craft Entrepreneurship program to help give people economic opportunity by training them to be creators and makers and giving them the tools they need to create ‘micro-businesses’ from scratch. According to Althea Erickson, Etsy Public Policy Director, “…as the Internet democratized access to entrepreneurship it’s creating all kinds of opportunities” (source: re/code) And Etsy is looking to be a driving force in this effort.
For Etsy, corporate responsibility is deeply embedded into the core of its brand. It is a way of life, extending through all aspects of the business. In 2012 behind the belief that business has a higher social purpose beyond profit, they became a Certified B Corporation. They publish a detailed annual report on employee well being (the complete results of their employee survey are included), community engagement, and environmental sustainability.
Etsy takes pride in its society-oriented mission, but keeps its conscientiousness down to earth and fun through programs for employees like free, organic, family-style meals, and a secret organization within Etsy called the Ministry of Unusual Business, which anonymously recognizes employees through notes and small surprise gifts. Etsy also has taken on the role of ringleader for other purpose driven businesses, by organizing an annual conference as a way for business owners to learn about new approaches to production, consumption (think: the future of currency) and more ‘purposeful’ ways of working.
It’s hard to think of Etsy without also thinking about eBay. After all, eBay was the original online person-to-person trading community on the Internet. Yet today, against the backdrop of a slowing rate of growth in its online auction business, eBay’s VIBE is only average, and its Cultural Traction is slipping 10% (i.e., its change in VIBE over time). Perhaps ironically, it is now Etsy, not eBay, that is seen as Visionary (115 vs 97).
The massively wide-ranging product line up (from the site: “Electronics, Cars, Fashion, Collectibles, Coupons and …”) may be one clue to the story behind eBay’s average VIBE. One may be visiting eBay for anything under the sun, or nothing in particular. In contrast, what you can get at Etsy feels crystal clear – a carefully curated range of handmade and vintage goods. Indeed, Etsy feels more focused to consumers: they know that Etsy is the go-to place for highly personal and personalized items. While eBay is a convenience, and is often a great one at that, Etsy has become a destination brand.
Digging deeper, the associated feelings with the two brands adds more nuance. Neuroscience has taught us that emotions guide our decision-making, and that choice is driven by the anticipated outcome. Positive emotions are significantly correlated with a brand’s ability to be seen as Inspiring. A look at the emotions associated with shopping Etsy vs eBay is enlightening: Etsy shoppers are full of anticipation and expect to feel admired, cool and delightfully surprised. eBay shoppers, in contrast, feel less of the positive emotions, and conjure up more disappointment and irritation too.
Ten years older, very much the Ruler/Sage in the retail category, eBay is at a different stage of development than Etsy, and brings in several billion dollars more per year than the Creator/Innocent upstart. As a much larger business which also faces the pressures of being a publicly held company, the current state of brand eBay could be seen as a cautionary tale for Etsy as it continues to expand. One that illustrates the need and challenge for Etsy to maintain the clarity of the brand experience, while continuing to find ways to make the brand experience positive, creative, and fresh.