Online retailer Etsy has launched a commerce-enabled iPhone application and a mobile Web site to let shoppers access the digital marketplace while on the go.

Etsy has slowing been making mobile improvements over the past year and has rolled out the changes in time for holiday shopping. The iPhone app marks Etsy’s first foray into mobile apps.

“Over the past several months since we rolled out the mobile version of our site, we have seen our traffic on mobile devices increase dramatically,” said Arpan Podduturi, mobile product manager at Etsy, New York.

“For shoppers, Etsy is very much a browse and discover site – people spend a lot of time exploring items and picking favorites and allowing people to do this from their iPhones, tablets and other mobile devices is critical,” he said.

“In addition, it’s a great companion and tool for Etsy sellers, many of whom will be selling in boutiques, fairs and gift shows over the holidays.”

Etsy is  an online marketplace that specializes in handmade and vintage products from small businesses.

Unique finds
Using the Etsy iPhone app, users can browse more than 11 million items from the Web site.

Etsy works with merchants that use the Web site to sell its goods by setting up virtual stores for the small businesses.

Consumers can search by category, which includes home, apparel and accessories products.

Additionally, consumers can filter the search results by price, location or time that the product was added to the site.

Users can view items by category on the app

Shoppers can also save items and make lists of their favorite products.

In order to buy a product, users need to have an account with Etsy. Users can then purchase via PayPal or with a check.

Shoppers can also contact the merchants directly via email.

Etsy’s mobile Web site functions in a similar way to the app but has more of an emphasis on images.

The top portion of the site shows a few featured items, and users can search for items below.

Users have less options to filter results on the mobile site and can only pay with a Paypal account.

Mobile rush
For an online-only retailer such as Etsy, having a mobile app or Web site is critical to sales and revenue.

Etsy is smart to roll out its mobile products just in time for the holiday season when consumers will be purchasing gifts on their mobile devices.

“As more people carry around small, connected devices, we see new opportunities to bridge offline shopping with online purchasing,” Mr. Podduturi said.

“As a supporter of independent, creative businesses, Etsy is in a unique position to create meaningful connections between offline and online commerce and we see that as a big and exciting opportunity for the coming year,” he said.

However, it is surprising that Etsy is just now delving into mobile because of the company’s competition, which includes the online marketplace eBay.

EBay has made mobile an ingrained part of its DNA and recently predicted that $5 billion of its sales will come from mobile devices in 2011 (see story).

Mobile lets Etsy have a two-way communication channel with both merchants and consumers.

Merchants can keep track of their stores and consumers can buy items on the fly.

“The reason for having both a mobile site and an app are simple – the reason for a mobile site is for the reach and frequency of the largest percentage of a retailer’s users being able to access them on a mobile device,” said Marci Troutman, CEO of Siteminis, Atlanta.

Ms. Troutman is not affiliated with Etsy. She commented based on her expertise on mobile Web sites and applications.

“The reason for having an app is to allow a customer that is a top user with their brand to easily access functions that are tied to the phone’s specific operating system such as calendar reminders and promotional games,” Ms. Troutman said.

Final Take
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York