U.S. markets open in 2 hours 34 minutes
  • S&P Futures

    +22.00 (+0.55%)
  • Dow Futures

    +177.00 (+0.55%)
  • Nasdaq Futures

    +37.25 (+0.29%)
  • Russell 2000 Futures

    +15.80 (+0.90%)
  • Crude Oil

    +0.77 (+1.11%)
  • Gold

    -33.10 (-1.67%)
  • Silver

    -0.31 (-1.32%)

    +0.0007 (+0.06%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    -0.78 (-3.45%)

    +0.0035 (+0.28%)

    +0.7740 (+0.59%)
  • Bitcoin USD

    +203.76 (+0.74%)
  • CMC Crypto 200

    -11.17 (-1.81%)
  • FTSE 100

    +66.11 (+0.89%)
  • Nikkei 225

    +91.62 (+0.33%)

Etsy's post pandemic strategy: Get more men to shop on its site

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

Forte’s familiar with Etsy in part because he’s an analyst at D.A. Davidson who covers the stock. But the company’s own 2020 research found that 50% of male-identified customers in the U.S. weren’t even aware the company existed. Eighty percent of sellers, and 80% of buyers on the platform are women.

Now Etsy’s trying to change that.

“As we looked at our opportunities going forward, we realized we’ve never really tried to speak to men,” Etsy CEO Josh Silverman told Yahoo Finance Live in an interview. “There’s tremendous amounts of merchandise on our platform that’s great for men. So we’re now starting to merchandise more directly to men. We’re starting to advertise in channels where men are a bigger part of the viewership.”

That could potentially be a large opportunity for Etsy, which is moving past a pandemic-era boom in items like masks and home furnishings to figure out where the next big phase of growth will originate. Revenue last quarter rose 16%, with demand for home furnishings waning and wedding-related sales ramping up to the mid-20s percentage range.

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

Etsy’s forecasts for first-quarter sales, adjusted margin, and gross merchandise volume — the value of all items sold via its site — fell short of average analyst estimates, but was still “better than feared,” according to 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 a 50% slump since closing at a record high on Nov. 24. Still, they have more than doubled since March 2020.

Forte thinks Etsy could grab some male shoppers, but wrote in a note reacting to earnings that bigger opportunities exist elsewhere. “We see three potential catalysts for shares over the next 12-month period,” he wrote. “Stronger-than-expected operating results from: 1) improving the search and discovery platforms for enhanced customer experience, 2) the company’s efforts to improve mobile conversion, and 3) its local international efforts to increase sales between buyers and sellers in the same country.”

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

“With management's track record of investments improving the platform, this should have strong long-term positive implications for Etsy as it comes out of the COVID strengthened period, despite the expectation that the growth is EBITDA margin neutral in the near-term,” Arounian wrote in a note to investors.

“What our sellers are asking us to invest in is marketing, service and product,” Silverman said. Etsy has been working on improving its search and discovery capabilities; live phone and chat support; and transparency around delivery timing. Then there’s the ad spend.

“Last time we raised 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 more than $600 million this year on marketing,” Silverman said. Some of that ad placement is on spots during NFL games.

“We see its willingness to use TV advertising to improve its brand awareness as an effective means for it to increase the number of male shoppers on its platform,” Forte said in an email to Yahoo Finance. “Etsy’s efforts to attract male buyers reminds us of an earlier effort where it tried to get more consumers, in general, to buy from Etsy. It was trying to overcome consumers’ perception, in general, that the only thing sold on Etsy was hand-knitted sweaters for cats!”

Julie Hyman is the co-anchor of Yahoo Finance Live, weekdays 9am-11am ET. Follow her on Twitter @juleshyman, and read her other stories.

Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn