Shoppers flock to online marketplace, benefitting millions of female entrepreneurs.
As JC Penney files for bankruptcy, joining the ranks of J. Crew and Neiman Marcus, an online retailer is thrilling Wall Street and bucking the trend of the coronavirus. Etsy (NASDAQ: ETSY) saw an explosion in non-mask sales of 79% in April – an unprecedented push that the company’s CEO compares to a fresh “Cyber Monday”. In a recent interview on CNBC, Josh Silverman explained how his company is smashing negative trends (and crushing sales numbers) while traditional retailers thrown in the towel.
Silverman credits the nearly 3 million independent business owners who are the true lifeblood of Brooklyn-based Etsy. These online entrepreneurs sold an astonishing amount of goods, including 12 million face masks, via Etsy’s online retail platform. The ability to innovate and adapt quickly to market conditions – offering masks or other in-demand items in tune with the times – has allowed Etsy to surge while others stagnate.
Josh Silverman has a lot to smile about.
Silverman, the former CEO of Skype and Shopping.com, explained that these artisans who are Etsy’s engine are mostly solopreneurs: sole proprietors. These one-person businesses are all but forgotten in Washington, as aid packages favor big business and unemployed workers. Relief for solopreneurs has been elusive at best. (For details on PPP, EIDL Loans and the CARES Act, check out this post). Silverman says his company is lobbying on behalf of these entrepreneurs, so that the independent businesses that serve his are able to keep making products.
A Career Reinvention
The independent merchants on Etsy – 83% are women – primarily deal in handmade products, home goods, jewelry and vintage items. In April, these crafty contributors moved $133 million in masks alone. “When the CDC changed its guidelines, we all of a sudden saw overwhelming amounts of demand come on to our site,” Silverman told CNBC. “Our sellers are so good at inventing products that are really relevant for the moment,” he shares. The market has responded with a 73% increase in Etsy’s stock price over the last 12 months.
Small business owners in the wedding industry, for example, turned their attention from making gowns to sewing masks for Etsy – quickly pivoting from a category where, due to cancellations and restrictions, business has been cut in half compared to last year. “It’s as if we woke up and it was suddenly Cyber Monday, but everyone in the world wanted only one product – and it was a product that basically didn’t exist two weeks before,” Silverman says.
The Leadership Trend: Adaptation
The key to surviving the coronavirus crisis is evident on Etsy: it’s the ability to innovate. Making masks may not be a radical innovation, per se. But pivoting quickly from making wedding dresses to making what’s more relevant is, well, a revelation. The key to economic success, especially for those whose industries have declined to the point of decapitation, is the ability to transition into an in-demand marketplace. That’s what Etsy provides.
There’s a lot of talk about the future and the new normal, here on these pages and all across the Interwebs. No one can predict the future, but what do now will definitely shape it. The savvy entrepreneurs that drove Etsy’s revenues are examples of America’s ingenuity, adaptability and innovation. Let’s hope that the government continues to fuel this vital economic engine by supporting small business owners. And that frustrated former employees of comatose industries can perhaps pivot to shape a new future.
While not everyone is a talented artist or handy with a sewing machine, we all have the ability to create things. To envision new ideas. To move in a new direction, even if we haven’t moved that way before. Here’s hoping that Etsy sellers – and Forbes readers – are able to find more of what’s needed in the days to come.