What is the long-tail keyword?
It is a keyword that combines more than two words. It helps you to niche down to a specific target audience. For example, if you sell planners on Etsy, you will find that millions of products compete on the market with the keyword "planner" when you start an Etsy shop from scratch. It is impossible to win the market with a generic keyword like "planner." You need to niche down your keyword.
Instead of focusing on "Planner", you should add more keywords to your product, making them catch the eye of a group of people, e.g. "Nurse Planner", "Business owner planners", or "Budget Planner" You are now reducing your competitor down a lot.
You can also go deeper with long tail keywords to be more specific like "Nurse Student Planner" "ADHD Planner" or "Cafe Budget Planner". This is how 0 sale stores take off. But make sure the products have market demand. Sometimes, you overdo it to cut all of the competitors, but no one is willing to buy.
Moreover, longtail keywords can help your ETSY SEO reach the right customer because, in general, people do not type only one keyword when they browse. There will be another specific keyword after that.
For example. If I want a collar for my dog. I would type "Collar for dog" not only collar. Most of the time, I would also be specific about my dog breed. Something like "Collar for corgi." If I found a collar made for a corgi on a search result, I would buy it without thinking twice. Because I feel that the product is specifically made for my dog.
Remember, people buy with emotion.