There are those who call Etsy (NASDAQ:ETSY) nothing more than “hipster eBay.” On a certain level, they’re not wrong. But that’s oversimplifying things substantially, and indeed, Etsy’s unique status may be its saving grace that will avoid a race to the bottom. Meanwhile, investors are happy about this notion, and shares are up nearly 3% in Tuesday afternoon’s trading.
“Original goods and real people.” Those are the marching orders out of Josh Silverman, Etsy’s current CEO. Instead of trying to compete with its numerous—and growing—rivals on price, be it shipping or product, Etsy is trying a different angle: it’s going after a niche market. And that niche is unusual fare that can’t be had just anywhere.
This is actually a taller order than you might expect. Lately, Etsy seems to be less about the unique goods and more about the mass-produced stuff that you can find just about anywhere. Etsy is increasingly plagued by savvy sellers who have figured out how to game the system and get their low-effort tchotchkes to the tops of page listings. And that’s led Etsy to refocus its marketing efforts on the handicraft and the unique.
AI Guidelines and New Management
So, how does Etsy plan to go about this? The biggest way is new product guidelines. In fact, Etsy plans to release a new slate of said guidelines, including some about AI-generated items. We know that AI is producing things all the time; articles, books, various works of art, and so on. But where should that fit into Etsy? Not very well; reports note that every item will have to “state the level of human involvement that went into the product.”
Meanwhile, Etsy also created a whole new position: Chief Brand Officer. That role—filled by Brad Minor—will be tasked with building that human-centered approach. Minor noted that Etsy will “…put…a stake in the ground to redefine what creativity means in 2024, all while supporting small business.” This sounds good, but it may not work out quite that well, especially as consumers are increasingly pinching pennies in a difficult economy.
Is Etsy a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on ETSY stock based on nine Buys, 10 Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 34.03% rally in its share price over the past year, the average ETSY price target of $68.62 per share implies 20.53% upside potential.
