marketing | April 29, 2013

Etsy & The Rise Of The Small Merchant: Rob Walker In Forbes

When the big box retailers ran into town, it meant the death of many small businesses. Rob Walker, a prominent marketing speaker and author of a regular Yahoo! column, has often spoken about the way these two different types of sales models affect consumer behavior. When you incorporate a story into your products, and customers feel connected to them on some level, they are more likely to stick with your company for their shopping needs. This "significance premium," can often be seen in smaller operations where items are handmade and not mass-produced. Etsy, an online store, is one such retailer. And, they are putting a significant focus on connecting with their customers.

According to Forbes, the online shop was "designed to be an e-commerce platform for handmade items, on the belief that handcrafted items had 'an intrinsic value' that should be given a forum outside of traditional retail." Today, they have expanded on that model to also include vintage items that are 20 years old or older. Walker agrees that Etsy's success is a testament to shifting retail values. Forbes quotes him saying this about the company: "[Etsy is] a cultural movement that could revive the power and voice of the individual against the depersonalized landscape of big-box retail." And, as Forbes says, "[Etsy provides] an opportunity to reconnect to humanity and to the small merchants that built the downtown you knew as a kid," because the company also shares the personal stories of the craftsman and curators with their customers.

While the company is recently facing expansion issues,like how to mass-produce hand-made products to accommodate demand without losing the small-town merchant feel, it is still an example of the power that significance in objects plays in consumer behavior. Walker wrote about this phenomenon in his Significant Objects project, which he co-founded with Joshua Glenn. They set out to prove that attaching meaning or sentiment to an object would ultimately increase its desirability (and, in turn, its market price). It turns out that they were right, as each object rose significantly in value when it was accompanied by a story (all stories were fictional and written by famous authors). In his speeches and his writing, Walker analyzes the important role that storytelling can play in purchasing habits. He teaches audiences of all varieties how to craft an authentic story—and how to attach real value to their products and services.

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economics | April 28, 2013