Here's a short summary of what you need to know about it...because the infos on Etsy are spread out on several different pages...
Shops banners are now called "cover photos", it is a bit like on Facebook.
You'll have 3 options:
1. Keep your old banner and your shop will look like this
2. The new "cover photo" style.
Your shop will look like this with the new cover photo
|on a computer screen
|On a tablet or phone (horizontal view)
|On a tablet or phone (vertical view)
Note that the shop icon is slightly over the shop cover photo, so keep this in mind when designing your new "shop cover"
So far there's no way to check the new style in the Etsy app...currently there's no banner on the app but it seems that this will change.
Now if you decide to go for the new cover photo style here are some tips:
* Minimum size : 1200 X 300 px
Recommended size : 3360 X 840 px (yes, that's big)
* Don't add your shop name UNLESS your name is also your logo (like in my case with The Captain Cosmos).
If you go for text, keep it centered (my guess is that the cover photo sides will be cut off on the Etsy app, I may be wrong though) and big so it's still visible on mobile devices. And, as I've already written above), keep in mind that in the vertical view the shop icon covers the bottom of the "cover".
* Don't add your tag line. It wouldn't be very visible on mobiles devices + it would be redundant as it appears right under your shop name
If you are not familiar with Photoshop, Gimp or similar softwares you can use this: CANVA
Shop icons and profile photos don't change.
Shop icons are 500x500
Profile photos are 400X 400
The switch will take place on April 5, 2016