While this is bad for shops that offer Printable items, it is definitely better for the average visitor's user experience. Most likely, a visitor typing in "Laundry Basket" would have meant that they were searching for a physical product. The way Etsy does this is by likely having a very large list of keywords that they associate with a "Category", such as "Physical" or "Digital." So that instead of a customer typing in "Physical Laundry Basket," which would be strange and redundant, they would only have to type "Laundry Basket" in order to get the result they wanted.
Because of this change, it's very likely that most Digital Download/Printable Etsy shops have seen a huge drop in their sales, unless they have worked to incorporate more physical products or worked on newer keywords that are more niche and less competitive. And some physical product shops are likely seeing some increases in certain categories, although I am sure physical shops are seeing some hurt from this as well, depending on what you sell. For instance, if you sell "Vintage Laundry Baskets" you were probably also effected as well, because Etsy is going to likely feature new and popular Laundry Baskets, instead of niche categories. This is a huge change that, unfortunately, is going to negatively or positively change your Etsy business is some way.
2. Less Focus On Titles
The Etsy CEO, Josh Silverman, made it clear that lots of changes will be happening to Etsy Search and keywords. He also made it clear that "keyword searches" are still the number one way people shop on Etsy, which makes it incredibly important for you to continue to learn and implement keyword strategies.
Unfortunately, we do not know what changes Etsy plans to make in the future. But we can make educated guesses on how to improve our Etsy Shops right now in order to prepare.
The main announcement that Josh Silverman made regarding search changes is a "Less Focus on Titles." Right now, Etsy's searches rely on a very old search algorithm called "keyword cramming" where you just stuff as many keywords as possible into your Titles and Tags.
I have felt for a lot time that this will eventually change. And Josh Silverman is making it pretty clear that this will definitely change in the near future. It will likely be more sophisticated to what Amazon and Google do with their searches, which is give you the best selling items, allow you to better filter through keyword results based on price, color, category, free shipping, and other important options.
For instance, take a look at the left-hand side column for "Laundry Basket" Etsy searches in the image below. On the left side, you can see options like "On Sale", Category, Shipping & Lead Times, as well as Color.
Compare this to Amazon, which allows you to also filter by Category, Delivery Day, Amazon Prime/Free Shipping, and Average Customer Review.