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Can Etsy's App Momentum Fuel the Next Phase of Growth?
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Key Takeaways
Etsy app GMS rose 11.2% in Q1 2026 and reached about 47% of total marketplace GMS.
AI-powered profiles, feeds and recommendations improved add-to-cart activity, conversion and engagement.
App users deliver about 40% higher lifetime value by visiting more often and converting at higher rates.
Etsy, Inc.’s (ETSY - Free Report) mobile app is emerging as the centerpiece of the company’s marketplace transformation, with management increasingly positioning it as the primary platform to improve buyer engagement and shopping frequency. Rather than serving as just another purchase channel, the app is becoming the primary destination where Etsy is deploying personalization, machine learning and direct customer engagement to strengthen marketplace activity.
The momentum is already becoming visible. During the first quarter of 2026, mobile app Gross Merchandise Sales (“GMS”) rose 11.2% year over year, accelerating from 6.6% growth in the preceding quarter. The app now accounts for about 47% of total marketplace GMS, an increase of 240 basis points from the prior year, with app GMS continuing to outperform non-app growth. Management believes this reflects improving buyer engagement as users interact more frequently with personalized experiences.
The company is investing heavily in features that make the app more relevant for each shopper. AI-powered buyer profiles, personalized home feeds, smarter recommendations and more targeted push notifications are designed to move beyond displaying popular products and instead surface listings that align with individual tastes while encouraging exploration across new shopping occasions. Early testing has produced improvements in add-to-cart activity, conversion and overall engagement.
Management also highlighted that app users deliver approximately 40% higher lifetime value than non-app users because they visit more often, engage more deeply and convert at higher rates. While purchase frequency has not yet meaningfully accelerated, Etsy believes stronger app engagement is an important leading indicator that can gradually translate into more frequent shopping over time as the broader marketplace strategy continues to evolve.
DoorDash & Shopify: App Innovation Drives User Engagement
DoorDash, Inc. (DASH - Free Report) is strengthening app engagement through AI-powered shopping enhancements and a richer end-to-end user experience. DoorDash plans to introduce agentic ordering, smarter search, personalized discovery and improved customer support to make shopping faster and more intuitive. Management also highlighted record DashPass engagement and growing membership adoption, reinforcing DoorDash’s strategy of increasing user retention and purchase frequency through a superior app experience.
Shopify Inc. (SHOP - Free Report) is also accelerating app-driven engagement by expanding AI-powered discovery and commerce capabilities. The Shopify Shop App delivered 70% GMV growth and more than 40% growth in monthly active users in the first quarter of 2026, while unique buyers increased more than 50% year over year. Shopify is further enhancing engagement through AI-powered search, personalized recommendations and Sidekick, helping merchants attract shoppers and improve conversion.
What the Latest Metrics Say About Etsy
Etsy has seen its shares jump 44.8% over the past three months against the industry’s 2.4% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Etsy's forward 12-month price-to-earnings ratio stands at 13.79, lower than the industry’s ratio of 21.85. ETSY is also trading below its 12-month median level of 20.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Etsy's earnings per share has seen a downward revision. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.41, while the estimate for the next fiscal year has declined from $6.40 to 6.29 over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Etsy's App Momentum Fuel the Next Phase of Growth?
Key Takeaways
Etsy, Inc.’s (ETSY - Free Report) mobile app is emerging as the centerpiece of the company’s marketplace transformation, with management increasingly positioning it as the primary platform to improve buyer engagement and shopping frequency. Rather than serving as just another purchase channel, the app is becoming the primary destination where Etsy is deploying personalization, machine learning and direct customer engagement to strengthen marketplace activity.
The momentum is already becoming visible. During the first quarter of 2026, mobile app Gross Merchandise Sales (“GMS”) rose 11.2% year over year, accelerating from 6.6% growth in the preceding quarter. The app now accounts for about 47% of total marketplace GMS, an increase of 240 basis points from the prior year, with app GMS continuing to outperform non-app growth. Management believes this reflects improving buyer engagement as users interact more frequently with personalized experiences.
The company is investing heavily in features that make the app more relevant for each shopper. AI-powered buyer profiles, personalized home feeds, smarter recommendations and more targeted push notifications are designed to move beyond displaying popular products and instead surface listings that align with individual tastes while encouraging exploration across new shopping occasions. Early testing has produced improvements in add-to-cart activity, conversion and overall engagement.
Management also highlighted that app users deliver approximately 40% higher lifetime value than non-app users because they visit more often, engage more deeply and convert at higher rates. While purchase frequency has not yet meaningfully accelerated, Etsy believes stronger app engagement is an important leading indicator that can gradually translate into more frequent shopping over time as the broader marketplace strategy continues to evolve.
DoorDash & Shopify: App Innovation Drives User Engagement
DoorDash, Inc. (DASH - Free Report) is strengthening app engagement through AI-powered shopping enhancements and a richer end-to-end user experience. DoorDash plans to introduce agentic ordering, smarter search, personalized discovery and improved customer support to make shopping faster and more intuitive. Management also highlighted record DashPass engagement and growing membership adoption, reinforcing DoorDash’s strategy of increasing user retention and purchase frequency through a superior app experience.
Shopify Inc. (SHOP - Free Report) is also accelerating app-driven engagement by expanding AI-powered discovery and commerce capabilities. The Shopify Shop App delivered 70% GMV growth and more than 40% growth in monthly active users in the first quarter of 2026, while unique buyers increased more than 50% year over year. Shopify is further enhancing engagement through AI-powered search, personalized recommendations and Sidekick, helping merchants attract shoppers and improve conversion.
What the Latest Metrics Say About Etsy
Etsy has seen its shares jump 44.8% over the past three months against the industry’s 2.4% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, Etsy's forward 12-month price-to-earnings ratio stands at 13.79, lower than the industry’s ratio of 21.85. ETSY is also trading below its 12-month median level of 20.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Etsy's earnings per share has seen a downward revision. The consensus estimate for the current fiscal year has fallen from $5.55 to $5.41, while the estimate for the next fiscal year has declined from $6.40 to 6.29 over the past 30 days.
Image Source: Zacks Investment Research
Etsy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.