This is What Etsy is Doing to Attract New Customers

Etsy, the American e-commerce website focused on handmade or vintage items and craft supplies, is doing something brand new to attract customers.

According to the company’s CEO, Etsy is now working with social media influencers to help attract new shoppers.

Chief Executive Josh Silverman told CNBC this week that the platform has a tool for social media influencers to showcase their favorite products on the site.

“It allows Etsy to reach many, many different diverse communities in ways that feel very personal to them,” Silverman said on Jim Cramer’s “Mad Money”

“So many influencers who love Etsy, who are passionate about Etsy and talk about Etsy to their community already, we’ve created a tool where those influencers can curate their own collection of their favorites on Etsy and then broadcast that out to their community and say, ‘Here’s what I love on Etsy,’” Silverman told Cramer in the Thursday interview.

“That shows the desirability, the specialness, the uniqueness, the scarcity of items on Etsy and it allows Etsy to reach many, many different diverse communities in ways that feel very personal to them,” Silverman added.

Earlier this week Etsy reported financial results for the first quarter. The company reported quarterly revenue growth of 141.5% on a YOY to $550.6 million.

Despite the growth, shares took a fall of over 14% as Wall Street digested the company’s outlook. Etsy expects revenue to grow in the range of 15-25% on a YOY basis. This is a steep drop from the previous quarter.

Silverman is optimistic and told Cramer he is comfortable with the demand dynamics Etsy is seeing.

“We had 90 million active buyers in the first quarter and, in fact, we had 8 million habitual buyers. These are our most loyal buyers that have bought on six or more purchase days and spent $200 or more, and that’s up 200%,” the CEO said. “So, we are absolutely delighted with what’s happening in terms of buyer activity and frequency and loyalty on Etsy.”

“One of the great things about the Etsy model is that it is so dynamic, it is so responsive to consumer trends,” Silverman said. “There’s 100 million things for sale on Etsy right now and anything that is suddenly hot, for sure we’ve got some of them for sale on Etsy and if we do not, our sellers will be making them within hours to respond to that trend.”

Silverman also said Etsy’s two-sided marketplace generates trust between buyers and sellers.

“Everyone else is playing Amazon’s game. They’re trying to sell you that same mass-produced stuff and try to ship a little faster than Amazon or sell it a little cheaper, and good luck,” Silverman said. “Etsy plays a different game. We lift up our sellers — now 4.5 million artisans, craftspeople — selling on Etsy that you can connect with directly and buy from.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.