NiciArt Reports Mixed Bag of Sales for the Holidays

Are Shoppers holding back in 2016?

With the holiday shopping nearing a close, NiciArt was left with mixed messages and piles of data requiring some considerable extrapolation in order to find meaningful conclusions for the 4Q Holiday Sales.

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The clearest change in holiday patterns was on our Etsy Site, where revenue was down 20% and sales down 50% based on sample sizes of over 1000 orders. Though we actually had record sales on many days, the bulk of the shopping took place between the Dec 2 – Dec 11 with very poor performances on Cyber Monday and Black Friday giving us a delayed start into the season.

Similar patterns plagued our new NiciArt website where sales were also down 20% over 2015 and on par with 2013, however the sample size for NiciArt tends to be a bit smaller, so some caution should be taken in direct comparisons between our website vs Etsy. Amazon Handmade sales grew 500% but again the sample size is too small to reach any concrete conclusions. Our top selling Amazon Products were:

niciart_sterling_silver_mountains_and_amber_bracelet_2Mountains and Amber Moon Cuff Bracelet

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Latitude longitude sterling silver money clips.

On Etsy we observed strong sales of money clips as well with some greater tendencies for customers to opt for the lower priced metals such as Copper, Bronze, and Aluminum. One of the most important observations is how many customers check out with Express Mail and Overnight Services.  By far 2016 had the lowest number of Express Checkouts to date and many customers indicated their preference for Priority Mail over Fedex 3 Day due to the $6.00 price difference. Sifting further through the numbers, our average price point was up 30% for individual items over last year, but multiple item orders and items in excess of $100.00 were actually quite rare. My conclusion is shoppers waited until later and then did indeed hold back on their budgets.

One of most popular items across all shops this year was our Sterling Silver Guitar Pick necklace with music note charm

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Like the money clips, that $50 – $60 range provides a quality gift without breaking the bank or running up the credit card bill.

Finally our dark horse of the shopping season was our Nici’s Picks website which absolutely exceeded all expectations and picked up some lost Etsy business. After Etsy’s de-clumping algorithm of late 2014, we witnessed a considerable shuffling of the cards where our dominate position as the largest guitar pick seller on Etsy was threatened by an invasion of new sellers in the music category, while we were finally able to gain some serious ground in the bracelet category. Nici’s Picks really managed to capture the originality of unique and custom order guitar picks with almost every pick leaving our shop being personalized with a saying, name, or some entirely custom phrase.

Still we are of the opinion shoppers are holding back and the consumer segment is far more sensitive to the recent elections than business to business. While a company such as General Dynamics wrestles with what projectiles or aircraft will appeal to new administration’s air superiority strategies for example, the consumer segment grapples with questions such as the future of healthcare, mortgages, and college loans which has an instant effect on the holiday shopping.

What are Nici and RJ predicting for 2017?

Our outlook tends to be cautiously optimistic regarding the health of the economy in the long run, but we are extremely bearish on the boutique markets where Etsy has dominated as the undisputed champion. Perhaps the greatest concern is over-saturation and unreal expectations. The discussion turns more in the direction of economics 101 than a deeper analysis of macroeconomic trends. In other words, there are too many sellers with far too few truly unique items on Etsy all vying for the same piece of a limited pie. Seeing the limited resources as a source of income, Etsy’s turned the competition between sellers into a strategy of profiting from “seller services.” In this sense, Etsy has been far more about Walden Pond economics in their small utopia rather than bringing those items to market as a distributor of handmade goods across the internet. Of course, the sellers too are responsible for not heeding basic supply and demand theories and thinking they could just enter the marketplace and sell almost anything.

An enormous opportunity missed, I was shocked how Kohls for example managed to saturated Google Shopping this year with stamped jewelry styles made so famous by Etsy. My hope was Etsy might have stepped out of their little world to actually expand their marketplace to accommodate the huge influx of new sellers, otherwise in the current Etsy marketplace sellers are bound to experience diminishing marginal returns from promoted listings and in response will start cutting their budgets to only cover listings, renewals, and commissions, there by leaving Etsy without one of their cash cows. Of course restructuring to remove the de-clumping and promoted listings could prove to be a huge step forward towards at least sustainability.

After Valentine’s Day, NiciArt will look to slash expenses and find ways to operate with 20-30% less revenue for the same profit. I will be studying our Google Adwords, Facebook, subscribed services, costs of tools and supplies, and be looking for ways to streamline the business in order compete in a much tighter market. We will also start looking for unicorn products, meaning those one of a kind rare products with high demand and low supply. For example, our Silver Mountain and Moon Bracelet was such a success in Amazon, because the style and product simply has no equivalent. Etsy is still a fantastic marketplace for us, but we may consider cutting back on the promoted listings and increasing or presence on Amazon Handmade. With on-line selling becoming ever more expensive and competitive, shows, live markets, street fairs, and boutiques will most definitely be on our radar for next year.