The trend: Ecommerce players have come down from their pandemic highs—but some, like eBay and Etsy, are finding success by leaning into their respective niches of handmade, affordable items and collectibles. On the other hand, Peloton and Wayfair are struggling as high interest rates and inflation erode demand for home goods and expensive connected fitness devices.
Etsy leans into value: While Etsy has managed to preserve most of its pandemic gains, the marketplace is feeling the impact of inflation and a strong dollar. To entice deal-seeking shoppers this holiday season, the company plans to lean into its “message of extraordinary, handmade, [and] affordable,” CEO Josh Silverman said on the company’s Q3 earnings call.
Despite headwinds, Etsy’s business model is relatively solid. Unlike Amazon, Etsy doesn’t offer fulfillment services, reducing its overhead significantly. And while seller fees make up the majority of Etsy’s revenues, its growing advertising business adds stability to its bottom line.
EBay gets into collectibles: As ecommerce growth slows, eBay is betting that it can achieve lasting success by retooling itself as a platform for collectibles and used luxury goods.
Wayfair’s tough spot: Wayfair’s performance this year has suffered as interest rates around the world skyrocket and home sales fall.
Peloton can’t catch a break: Peloton’s slide continued in Q3 as consumers opted for in-person fitness over connected fitness devices and inflation wiped out demand for expensive equipment.
The big takeaway: There’s no getting around the fact that many retailers are facing a difficult year ahead, especially in categories like home goods and fitness where the conditions are highly unfavorable. But as Etsy and eBay demonstrate, there are still opportunities for retailers that can offer a good deal, or dive deeper into niche categories to attract an engaged user base.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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