The creative entrepreneurs and artisans who sell their work online have given Etsy many things — inventory for its digital marketplace, revenue, the prestige of curating the best of “maker culture” — but perhaps one of the biggest benefits has been 90% organic traffic.
In an interview with Marketing during the C2 Montréal event this week, Etsy CEO Chad Dickerson said because of all the makers’ social activity, word of mouth and referral links, the company relies primarily on simple Google Product Listing ads to make up that remaining 10%.
“Etsy’s never been a big spender in terms of brand marketing,” he said, though he suggested there are more subtle, influential ways it could invest in how it is perceived by customers. “Here in Montreal and in other places, we work with local copywriters to make sure the brand message is friendly and relevant. A lot of our brand work is really about expressing brand in a way that makes sense to different nationalities around the world.”
Defining the value the Etsy brand offers is only becoming more important as competitive threats proliferate. Companies like Shopify, for example, are offering creative entrepreneurs simple and relatively inexpensive ways to set up their own ecommerce presence. More recently, Amazon announced the launch of its own Etsy-like hub, Amazon Handmade.
“We believe we have a really unique position. We’ve been doing this for 11 years. We defined the market,” Dickerson said. “It’s the only thing we’re doing. We’re not serving creative entrepreneurs and also selling other stuff. Being competitive to me is about being really committed to staying who we are, to being the place where you find things you can’t find anywhere else.”
In an onstage fireside chat with GigaOm researcher Stowe Boyd, Dickerson said another key differentiator is doing things that don’t necessarily help the company, but the world. This includes launching a wholesale program that brought artisans’ work to retailers such as Macy’s and Whole Foods in the U.S., to curating teams of “local sellers” in specific markets who can offer peer support. There are 2,000 such local sellers who meet regularly in Montreal, for example.
“Growth is a challenge, finding the right talent and all those sorts of things. We’re continuing to improve the user experience and maintain the quality of the marketplace,” Dickerson said. “But, there’s almost a larger, spiritual challenge in business that Etsy is going to be at the heart of, which is, how do we build businesses that create social good in the communities where we operate?”
Boyd said Etsy may soon start to act more like a regulator in which “bad actors” — those who sell underhandedly or operate with poor working conditions — are excluded from the platform.
“It represents a failure, I believe, on the part of other institutions,” he said.
Another aspect of social good involves being a strong role model, Dickerson suggested. For example, Etsy last year launched a six-month paid parental leave program for both mothers and fathers, and replaced desk-side garbage bins with common-area recycling and composting. Last month came Etsy Solar, a program that aims to reduce the carbon footprint associated with product shipping.
“As you get bigger, you can have more impact. You can hire more people to put programs in place,” he said, noting that startups often talk about the challenge of achieving “scale” or becoming larger, but underestimate the long-term benefits. “Scale is your friend.”
C2 Montreal continues through Thursday.
