Etsy Unveils New Buyer Loyalty Program

Etsy announced Wednesday it was piloting a new buyer membership program called Etsy Insider to incentivize more consumers to shop the online marketplace.

"One of our top priorities is encouraging buyers to think of Etsy first and shop with us more often, translating the joy Etsy inspires into more sales for our 7 million sellers," the company wrote in a blog post Wednesday.

Etsy Insider will launch in mid-September to select U.S. buyers, who will be able to choose from a seasonal or annual membership. Both come with benefits such as free U.S. shipping, a birthday bonus, an annual gift designed by an Etsy seller, early access to special discounts and merchandise, and double impact to Etsy's nonprofit fund Uplift, which contributes to nonprofits that work to create paths to entrepreneurship for everyone.

The new loyalty program will cost nothing for Etsy sellers. The company said the membership fee would cover the free shipping.

Total Retail's Take: It's unclear what the loyalty program's cost is to join, nor is it known how long the beta version of this program will last and when Etsy plans to open it up to more buyers. Etsy's seller community nearly doubled during the pandemic, according to CEO Josh Silverman. In that same period, Etsy's competition with other marketplaces such as Amazon.com has only increased, and new competitors like China-based Temu have entered the e-commerce scene. Etsy has tried to set itself apart by leaning into its creativity standards, such as ensuring all items listed are made by hand, designed by a seller, sourced by a seller, or handpicked by a seller.

But its sales have been sluggish, with the Associated Press reporting that in the first three months of 2024, Etsy's reported merchandise sales were down 5.3 percent year-over-year. A loyalty program is a potential solution to declining sales, with Etsy hoping to convert first- and one-time buyers into repeat customers, increasing customer lifetime values and decreasing customer acquisition costs, giving a boost to the marketplace's top and bottom lines.