Etsy Launches First Loyalty Program for Growth

Etsy announced on Wednesday that it will test its first-ever loyalty program, named Etsy Insider, starting in September. This initiative aims to revitalize the online retailer's sluggish sales by inviting a select group of buyers to participate in a beta test. Members of Etsy Insider will enjoy benefits such as free shipping and discounts on select products. While the company has not disclosed the exact cost of the program, Chief Operating and Marketing Officer Raina Moskowitz indicated that the monthly fee would be comparable to the price of a latte. The program is designed to provide value to buyers without imposing costs on Etsy sellers. Simona Shakin, Etsy's Vice President of Product and Retention Marketing, emphasized that the benefits will be funded by Etsy and the membership fees, ensuring that sellers are not financially burdened by the initiative. This move comes as Etsy seeks to address a decline in gross merchandise sales, which fell by 5.3% in the first quarter of 2024 compared to the previous year. Etsy's challenges have intensified since the pandemic, which initially boosted its popularity as consumers sought unique items while at home. However, inflation has led online shoppers to cut back on discretionary spending. Additionally, increased competition from major players like Amazon, Temu, and Shein has further impacted Etsy's market position. Analysts note that while Etsy remains a platform for unique products, the presence of lower-quality items has diluted its brand identity, contributing to a significant drop in share value since late 2021.