Etsy Prepares to Beta Test Paid Loyalty Program

Etsy announced Wednesday it would begin beta testing a paid loyalty program this fall with a select group of customers.

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Simona Shakin, vice president of product retention at Etsy, said the company will “be exploring multiple fee structures, including annual and seasonal options” but noted that “the fee to join will be manageable for participating buyers—monthly cost will be about the cost of a latte.”

For that cost, members of the program, which the company will call Etsy Insider, will have access to free shipping, a “birthday bonus,” an annual gift created by a seller on Etsy, early access to discounts and items and more.

The company has placed a strong priority on putting Etsy at the forefront of shoppers’ minds for a variety of occasions, rather than only when they seek something highly specific. Shakin said this program aims to continue that mission.

“Etsy has been highly focused on building buyer consideration by launching initiatives, like Etsy Insider, that get buyers to think of us more often,” Shakin told Sourcing Journal. “Ultimately, our goal is for Etsy Insider to help drive more traffic and more sales for our sellers because it makes shopping from small businesses more affordable and helps buyers keep Etsy top of mind for their shopping needs.”

While shoppers will pay a membership fee, sellers won’t be on the hook for any of the costs associated with providing free shipping, Shakin said, noting those benefits will either be funded by Etsy or paid for by the membership fees customers dole out.

The company has been working on a slew of different initiatives to entice consumers—earlier this year, it launched Gift Mode, which helps users shop for their loved ones by using personas, from The Dog Lover, to The Gardener and more.

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A broad swath of retailers and brands have begun to test, develop or bring back loyalty programs—albeit many of them free to join—over the past year or so. That may, in part, be due to the rise in discussion about personalization, which some companies have adopted AI to aid them with.

However, AI models focused on personalization often require solid data inputs to make accurate recommendations. Loyalty programs can help improve repeat buying behavior, in turn providing more data for a company to work off of. Shakin didn’t directly say whether the data collected in the loyalty program would be used to develop consumer-facing AI models going forward.

“We’re learning about how our users want to interact with this technology and are focused on deploying it in ways that make sense for our community to create an even better experience for both buyers and sellers,” she said.

Etsy Insider may also up the platform’s sales if it does its job well. In Q1, the company reported a year-over-year decline of 5.3 percent in merchandise sales.

Buyers will begin beta testing the program in September. Shakin said the company will continue to iterate on the program as it receives feedback from the “select, targeted group of U.S. buyers” testing it out.

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