Etsy Focuses on Personalization Amid ‘Highly Fluid' Trade Situation

Core Insights - Etsy is facing a challenging macroeconomic environment, with a reported consolidated gross merchandise sales (GMS) of $2.8 billion, down 6.5$2.3 billion [1] - The company anticipates no major changes in the macroeconomic backdrop, maintaining a consistent outlook [2] Strategic Focus - Etsy is prioritizing personalization efforts to enhance traffic, incorporating ad and recommendation data into search models [3] - The aim is to create a more personalized shopping experience, likening it to a personal boutique for users [3] Engagement Metrics - Personalized homepages are showing nearly double the engagement compared to non-personalized ones [4] - Machine learning has increased the share of personalized email and push notifications by over 10 percentage points, leading to higher engagement [4] Tariff Exposure - Etsy's exposure to tariffs appears low, with just over 1% of GMS coming from U.S. imports of products from Chinese sellers [4] - The current trade situation is fluid, making it difficult to predict the impact of tariffs on demand [5] Seller Impact - Tariffs on China could negatively affect Etsy's individual sellers, as broad policies may inadvertently harm them [6] - While most sellers source 90% of their supplies locally, rising raw material prices could lead to increased costs for sellers, potentially impacting consumer prices [6]