Etsy customer conversions improve during holiday season

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Etsy customer type conversion improved in 4Q23 according to Earnest credit card data. The percentage of one time buyers converting to repeat* buyers increased 100bps YoY, while the percentage of repeat buyers converting to habitual** buyers grew 30bps. This is a sign of improvement for Etsy, who Earnest data shows has one of the highest churn rates in the industry, which has put pressure on post-acquisition value (PAV).

Etsy’s strategy on converting one time buyers to repeat buyers and repeat buyers to habitual buyers is vital to its success, as habitual customers account for a significant portion of gross merchandise sales (GMS). While Etsy continues to vie for consumer wallet share following the pandemic driven demand surge and rise of Temu, the conversion improvement in the all-important holiday quarter highlights the breadth of Etsy’s unique merchandise appeal.

Notes

*Repeat Etsy buyers are those that made more than 1 purchase in the last 12 months but do not meet the criteria of a habitual buyer

**Habitual buyers are defined as Etsy buyers that have spent over $200 or more and made purchases on six or more days, in the previous 12 months