The Series B round for Witherspoon’s Draper James brand was led by San Francisco-based Forerunner Ventures.
The handmade products marketplace says an app is a great retention tool.
Etsy Inc., an online marketplace where sellers of handmade goods set up shops, is achieving great early success with its iPhone app, which it launched in November 2011. In the four months since launch, consumers have downloaded the app one million times, Etsy reports. By comparison, Etsy.com boasts 35 million unique monthly visitors, it says.
The Etsy app enables consumers to search and browse through myriad products and shops. The model is akin to eBay Inc. When a shopper finds something she likes, she purchases from the shop owner. Etsy takes a cut.
Etsy credits the viral nature of the Internet through Facebook and Twitter for getting the word out about the app. It also includes on the pages of its m-commerce site a small bar that reads “Download our free iPhone app.” Touching that bar links a consumer to the page in the Apple Inc. App Store where she can download the app.
“What we didn’t want to do was one of those initial splash pages that say ‘Download the app now,’” says Leland Rechis, director of product. “We don’t want to get in the way of our sellers and buyers. We want to get them right when they are coming into the site from Google, Facebook or Twitter, and get them to the item. The 30-pixel box on the pages increased our downloads.”
Month-over-month visits to the app since November have increased between 25% to 65%, depending on the month, Etsy says. It would not reveal more specific numbers. Shoppers using the app on average view 30 pages per visit, Etsy says, and there’s a reason for that.
“It’s the nature of how the app is; it’s really fast and fluid,” Rechis says. “Etsy is a great place to explore things, and the speed and the fluidity of scrolling, going back and forth, and discovering things drives page views. The speed and fluidity is a function of an app being native to a device, and having a good design around the native app. Plus, if you’re downloading the app, you are likely a pretty engaged customer.”
Being “native” means an app resides on a device and can very quickly make use of the device’s power and functions. An m-commerce site, by comparison, resides on servers at a company, not on the device, so it typically cannot beat the performance of an app. Though that is changing with greater use of the up-and-coming web site programming language HTML5.
In its latest update to the app, Etsy integrated its service called Direct Checkout. Previously, Etsy customers could pay only by PayPal, check or money order. Now Direct Checkout, which also is being used with a limited number of sellers on Etsy.com, enables sellers to accept Visa, MasterCard, American Express and Discover. Etsy charges sellers a small fee to manage payments.
Because Etsy had released its application programming interface, or API, awhile back, there already were a number of Etsy mobile apps created by avid Etsy fans. So when it decided after the July 11 launch of its m-commerce site to pursue an iPhone app, Etsy decided to have a contest and find the best Etsy mobile app. Jey Biddulph and his Etsy Lovers app took home the gold—and Etsy hired Jay full-time and used Etsy Lovers as the foundation of the official Etsy iPhone app.
“We started rewriting it to use our branding and changed the browsing model to create more engagement,” Rechis explains. “And we rewrote a lot of the software to make it faster for greater performance, and then integrated PayPal and Direct Checkout.”
So what is it that makes Etsy’s iPhone app such an instant success when it comes to downloads and usage? The marketplace says it’s the nature of the beast.
“Our sellers are typically running their businesses anywhere but their desktops, and we are seeing from our research that they are now running their businesses from the app,” Rechis says. “Also, you can see from the page views that Etsy is a great way to explore a wide variety of items. There are so many sellers and so many products and so many unique items on Etsy, and people are spending a lot of time browsing on their phones; people are browsing even at home on their phone, based on our research. On the go, anywhere they can; when you take that mobile phone break.”
Which points to perhaps the most valuable aspect of the app, Rechis says. “The mobile app,” he explains, “is a great customer retention tool.”