Etsy Ads Aim To Make Gifting Even Faster

Etsy wants people to know that finding the right gift – that special something for a hard-to-please someone – is easier than they think, no matter how little time they have. New ads feature a pair of friends shopping while upside down on a roller coaster in the latest dramatization of the advantages of Gift Mode. The Brooklyn-based company first launched the proprietary tool, which leverages AI and personalization for bespoke recommendations, with an ad during the Super Bowl.

The company says the creative concept stems from the insight that lack of time is one of the most significant barriers to thoughtful gift-giving. And 71% of those it surveyed say they experience gift-giving anxiety, struggling to balance their time with wanting to prioritize the people who are most important to them.



“We know people do care about giving thoughtful gifts, but so often life gets in the way,” says Brad Minor, vice president of brand marketing and communications at Etsy, in the announcement. “And before we know it, it’s too late for that special or custom piece we have in mind to arrive in time. We wanted to show how Etsy can solve last-minute gifting conundrums in a way that felt high stakes but also fun, fantastical and visually arresting.”

The ads, created by Orchard, are running on multiple channels and streaming services in the U.S. and the U.K.

This is the third installment of the gifting ads, following its AFC/Super Bowl debut. The effort is working. Amid weak overall results, gifting sales were among the few bright spots in the company’s first-quarter results. Gifting grew a few percentage points year-over-year, “significantly outpacing our site-wide performance,” the company says.

On a broader level, Etsy has faced tough sledding, with the company blaming the challenging economic environment for declining sales. Gross merchandise sales fell 3.7% to $3 billion for the first quarter as consumers pulled back on discretionary spending. Etsy also forecasts similar results for the coming quarter.

The number of active buyers increased by 1.9% to 91.6 million, and the company reactivated 6.3 million buyers, up 5.9% from the prior year period. Its retention of active buyers increased modestly and remained above the pre-pandemic level. However, the number of habitual buyers dropped by 2.9%, and spending per active buyer dropped by 3.5% to $125.

Net income slipped to $63 million.

“Consumers’ preference for lower-cost alternatives with limited discretionary spending power is leading to reduced spending and frequency on Etsy’s core marketplace, a dynamic that we do not see changing any time soon,” writes Seth Basham, an analyst who follows the company for Wedbush. “In addition, the competitive environment remains intense.”

Basham continues to give the company a neutral rating.

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