Originally published in Fierce Retail by Jacqueline Renfrow
Amazon has officially launched its Esty holiday shopping rival. The Handmade Gift Shop will offer a selection of thousands of handcrafted, one-of-a-kind items, ranging from personalized jewelry to custom baby decor.
Shoppers can browse categories tailored for their recipient, separated into: For her, For him, For kids, For baby, For the couple, and Last-minute gifts.
The launch comes at an opportune time, as Amazon is promoting it as the perfect place for consumers to do their holiday shopping.
Although Amazon Handmade, which encompasses 10 categories, has been in existence since 2015 and is available in more than 30 countries, this platform aims to specifically capture the gift-giving shopper.
In addition to the Gift Shop, Handmade recently added the new categories of clothing and shoes and pet supplies.
So what does this announcement mean for Etsy?
“It means they need to pay attention to their customers and make certain they are meeting their needs,” Sam Cinquegrani, founder and CEO of ObjectWave, a digital marketing and services provider, told FierceRetail. “Amazon has tried many different avenues to sell product. Some have been successful, others have not. Just because they’re competing doesn’t mean they will succeed. Nevertheless, it can’t be ignored.”
The simple availability of the platform doesn’t guarantee that tried-and-true Amazon shoppers will run to it. Cinquegrani believes consumers will be cautious.
“People who put their items on Etsy are proud of their hobby and results they get. So Amazon’s new offering may not necessarily be attractive to them. It isn’t always about money,” he said. Cinquegrani warns that just because Amazon puts up a new marketplace does not mean they will understand those partners or meet their needs.
Kelsey Cheng, founder and principal maker of Kelsey Cheng Ceramics—and an Etsy seller—agrees that the launch may bring some initial worry for shareholders, but Etsy sellers are already preparing and listing their holiday goods. Since it’s an important selling season, it seems unlikely that many Etsy sellers would risk jeopardizing those sales by jumping over to Amazon.
Greg Portell, lead partner in the retail practice of A.T. Kearney, a global strategy and management consulting firm, believes that Etsy will certainly feel the impact of Amazon’s entry into the handmade crafts market.
“I’d be surprised if they don’t have a contingency plan already in place,” Portell said. “Etsy is at a point in their lifecycle where they should be expected to bump into new growing pains. Amazon’s entry fits that category, so the impact shouldn’t be insurmountable.”
Portell agreed that just because Amazon enters a market doesn’t mean they will corner that segment.
“While it does force established players to sharpen their game, which benefits everyone in the end, there is nothing that suggests Etsy isn’t a capable of mounting a strong defense,” he said.
And Portell agrees with Cinquegrani, stating that while entering into the marketplace will be a fairly smooth transition for the internet giant, hurdles will come up when going up against an established competitor in the market.
“The challenge for Amazon is to shift from building trial to fighting for share. To be successful, it will take a new set of muscles,” Portell added.
Chengy agrees that at this point, the industry will just have to wait and see if Amazon can make the Handmade Gift Shop a profitable venture.
“Everyone is wondering the same thing. From HQ2 to Whole Foods to Amazon Handmade Gift Shop, Amazon has a lot on its plate right now in sprawling industries. There’s always the possibility of biting off too much too fast, but all we can do is sit back and see what is in store for Bezos and company,” she said.