Wedding Finance

Getting more men to shop on her site

Tom Forte bought a desk made from recycled skateboards on Etsy (ETSY) during the pandemic, then a stool to match. What’s unusual about Forte isn’t that it bought anything from the site — 96 million people did last year. What is unusual is her gender.

Forte knows Etsy in part because he’s an analyst at DA Davidson who covers the stock. But the company’s own research in 2020 found that 50% of male-identified customers in the US weren’t even aware the company existed. 80% of sellers and 80% of buyers on the platform are women.

Now Etsy is trying to change that.

“As we looked at our upcoming opportunities, we realized that we had never really tried to talk to men,” Etsy CEO Josh Silverman told Yahoo Finance Live in an interview. “There are massive amounts of merchandise on our platform that are ideal for men. So we’re starting to sell more directly to men. We’re starting to advertise on channels where men are a bigger part of the hearing.”

This could potentially be a big opportunity for Etsy as it looks beyond the pandemic-era boom of items like masks and home furnishings to figure out where the next big phase of growth will come from. Last quarter sales increased 16% as demand for home furnishings declined and wedding-related sales increased through the mid-twenties.

BRAZIL – 2021/07/12: In this photo illustration the Etsy logo displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Etsy’s forecast for first-quarter sales, adjusted margin, and gross merchandise volume — the value of all items sold through its site — fell short of analysts’ average estimates, but was still “better than expected.” feared,” said Ygal Arounian, an analyst at Wedbush who rates Etsy Outperform

Investors seemed to agree. Etsy shares rose 16% on Friday in response to earnings, after falling 50% since closing at a record high on Nov. 24. However, they have more than doubled since March 2020.

Forte thinks Etsy might attract some male shoppers, but wrote in a note reacting to earnings that greater opportunities exist elsewhere. “We see three potential catalysts for stocks over the next 12 months,” he wrote. “Stronger-than-expected operating results due to: 1) improved search and discovery platforms for an improved customer experience, 2) the company’s efforts to improve mobile conversion, and 3) its international local efforts to increase sales between buyers and sellers in the same countryside.”

Part of those efforts are being funded by Etsy’s first transaction fee increase since 2018, to 6.5% from 5%, effective April 11. This increase, unlike the myriad of companies that have recently hiked prices and cited inflation, is for marketing and reinvesting in the business.

“With management’s track record of investments in improving the platform, this should have strong positive long-term implications for Etsy coming out of the strengthening COVID period, despite the expectation that growth be neutral on the short-term EBITDA margin,” Arounian said. written in a note to investors.

“What our salespeople are asking us to invest in is marketing, service and product,” Silverman said. Etsy has been working on improving its search and discovery capabilities; phone support and live chat; and transparency around delivery times. Then there are advertising expenses.

“The last time we increased fees in 2018, Etsy was spending about $70 million a year on advertising. Last year we spent $500 million on advertising. We’re going to spend over $600 million this year on marketing,” Silverman said. Some of this ad placement is on spots during NFL games.

“We view his willingness to use television advertising to improve his brand awareness as an effective way to increase the number of male shoppers on his platform,” Forte said in an email to Yahoo Finance. “Etsy’s efforts to attract male shoppers remind us of an earlier effort where it was trying to get more consumers, in general, to buy on Etsy. He was trying to overcome the consumer perception, in general, that the only thing sold on Etsy was hand-knit sweaters for cats!

Julie Hyman is the co-presenter of Yahoo Finance Live, weekdays 9-11 a.m. ET. Follow her on Twitter @juleshymanand read his other stories.

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