Etsy's Surge in Traffic Offers a Glimmer of Hope for Struggling Small Businesses

Among the harvest of bad economic news wrought by Covid-19 is the plight of the mom-and-pop operator. While mammoth retailers like Walmart and Amazon have seen shoppers flocking to their sites, smaller businesses (restaurants, corner stores, pet sitters, hair salons) have generally found themselves in dire straits. And as a recent paper from the Brookings Institution warned, “the pandemic crisis will … consolidate the grip that corporate retailers such as Amazon, Walmart and Target have on the trade and push out what small businesses are left.” But into this bleak picture came a bit of bright news last week, at least for those cheering on these small companies. Online retail platform Etsy reported first-quarter sales of $228 million, an increase of 35% over this period last year. The crafty cousin of Amazon, Etsy might be a huge online retailer, but its made up of millions of small sellers—2.7 million, to be exact—many of whom hand-make the 65 million items for sale on the platform at any given time. The first quarter ended on March 31, so its jump in revenues included only the first couple of weeks of the Covid-19 crisis (the World Health Organization declared a pandemic on March 11). Even so, it’s clear that consumers are heading to the platform for more than just the handcrafted item that’ll be a home accent or a special gift. More shoppers are going there clutching a long list of essentials for lockdown living. “The current situation is causing people to think of Etsy for more than just special items,” a company spokesperson told Adweek. “We’re proving that our marketplace and makers can meet the everyday needs of consumers.” Masks, for example, are quite popular these days. At a time when medical professionals need every N95 mask there is, Etsy has positioned itself as a viable and individual alternative, selling a huge array of face coverings (masks, scarves and bandanas) and even producing a video on how to choose the right one. [kickout id="1"] During a recent call with sellers, CEO Josh Silverman observed that medical masks were historically not the sort of thing shoppers came to Etsy for. “Previously, when someone would search for masks, they would be thinking about Halloween masks or maybe cream for their face,” he said. Realizing that so many people were looking for masks as a Covid-19 prophylactic, Etsy retooled its internal search engine and then reached out to its selling community, advising them to start sewing. The company estimates that 60,000 of its sellers are now putting out masks for sale. [article_summary section="1"]But Etsy’s internal data also shows that Americans have been visiting the platform in search of other Covid-era necessities, such as cleaning supplies, food storage containers and even washable paper towels. There’s also been a surge in demand for diversionary products that Americans, sheltering at home and sick of watching Netflix, can use to stay sane. These include games like lawn dice and hand-drawn playing cards and activities such as embroidery kits. “Masks were a big part of the story, but we also saw a significant increase in demand across other categories, including home and living, craft supplies, self-care, toys and games and gifting,” the spokesperson said. The company estimates that “non-mask sales” in categories such as self-care and games have risen 79% since last year. Whether this growth is a direct result of shortages of these items in stores or simply a function of consumers preferring to shop online and have the goods shipped to them is hard to say. It’s clear that the arrival of Covid-19 has led to Americans washing their hands and wiping down surfaces more than they used to, and the widespread unavailability of items like hand sanitizer, toilet paper, antibacterial soap and cleaning supplies has been well documented. [kickout id="2"] Some of those shortages stemmed from supply-chain problems and others grew out of consumers’ panic buying and hoarding of goods. Overall, with so many Americans staying home and not going into the workplace, many staple items have been harder to find and consumption of basic items is just up, period. In March alone, soap sales rose by double digits and hand sanitizer sales were up by 470%. It's little wonder, then, that the grocery store up the road has nothing to offer. Last month, Cleveland-based web developer Chris Violette launched a crowdsourcing app to help shoppers locate hard to find foods and household items. This dynamic likely explains why Etsy has also seen a leap in traffic from shoppers who hadn’t thought to visit the site in the past. [article_summary section="2"]“We have many people shopping on Etsy now that might not have shopped with us before, and we have previous buyers who are shopping on Etsy differently now than they may have pre-crisis,” the spokesperson said. “During the month of April alone, we acquired nearly 4 million new buyers and reengaged 2.5 million buyers that hadn’t purchased from Etsy for a year or more.” Seizing the opportunity, Etsy has also turned this traffic jump into a marketing opportunity. Last month, the company launched "#StandWithSmall," a campaign that featured real sellers and craftspeople talking about how they began making and selling things when more traditional employment options were closed to them. Krystal Shaw started baby clothing brand Random Rompers, for example, to save her family from being evicted from their home. Woodworker Walter Kent started his company Peg and Awl after serving in Iraq when he was feeling as though he had no options once he returned home. Though "#StandWithSmall" puts the single proprietorship and independent operator in the limelight, advancing a kind of moral imperative to support craftspeople toiling in their cellar and garages, it’s also rallying cry for the web platform as a host for these sellers, a champion of the little guy at a time when it can seem like only behemoths like Amazon and Walmart are making their numbers. Meanwhile, Etsy's guidance for Q2 includes a projected revenue climb of between 70% and 90%, which means a lot more hand-sewn face masks and washable paper towels are destined for new homes.