{"id":78974,"date":"2026-04-17T13:30:57","date_gmt":"2026-04-17T13:30:57","guid":{"rendered":"https:\/\/dralysstore.com\/blog\/?p=78974"},"modified":"2026-04-17T13:30:57","modified_gmt":"2026-04-17T13:30:57","slug":"how-etsy-is-using-ai","status":"publish","type":"post","link":"https:\/\/dralysstore.com\/blog\/how-etsy-is-using-ai\/","title":{"rendered":"How Etsy is using AI"},"content":{"rendered":"<div>\n<p>One of the ways Etsy has been steadily growing its revenue while its gross merchandise sales (GMS) decline is by capitalizing on artificial intelligence (AI) capabilities.<\/p>\n<p>That includes Etsy using AI for search and discovery on the consumer side, and on automating routine tasks for sellers. In the past year, Etsy has also leaned into AI for advertising and to work toward enabling <a href=\"https:\/\/www.digitalcommerce360.com\/2025\/03\/20\/agentic-commerce-ecommerce-trends\/\" target=\"_blank\" rel=\"noopener\">agentic commerce<\/a>. Part of that has stemmed from a partnership with OpenAI to use the large language model (LLM) ChatGPT for what that platform named \u201c<a href=\"https:\/\/www.digitalcommerce360.com\/2025\/09\/30\/chatgpt-debuts-checkout-experience-etsy-shopify-merchants\/\" target=\"_blank\" rel=\"noopener\">instant checkout<\/a>.\u201d<\/p>\n<p><iframe style=\"position: absolute; width: 100%; height: 100%; top: 0px; left: 0px; border: none; padding: 0px; margin: 0px;\" title=\"Ecommerce Trends: How Etsy is using AI\" src=\"https:\/\/e.infogram.com\/_\/7pendC6jGibmUAY2MLUZ?src=embed&amp;embed_type=responsive_iframe\" allowfullscreen=\"allowfullscreen\" loading=\"lazy\"><\/iframe><\/p>\n<p>\u00a0<\/p>\n<p>Etsy ranks No. 20 in the<a href=\"https:\/\/www.digitalcommerce360.com\/product\/online-marketplaces-database\/\" target=\"_blank\" rel=\"noopener\">\u00a0Global Online Marketplaces Database<\/a>. The database is Digital Commerce 360\u2019s ranking of the 100 largest marketplaces by third-party gross merchandise value (GMV).<\/p>\n<h2>How Etsy uses AI for search and discovery<\/h2>\n<p>\u201cThere\u2019s a good reason that search and discovery has been a focus for us,\u201d CEO Kruti Patel Goyal said at a Morgan Stanley technology conference in early March. \u201cMatching is really the core value proposition of a marketplace. So it has been a priority. It should continue to be a priority forever more.\u201d<\/p>\n<p>Goyal called search and discovery \u201can evergreen priority\u201d for Etsy. And she said advancements in AI, particularly via LLMs, have enabled Etsy to tackle some of its \u201cstickiest challenges.\u201d<\/p>\n<p>She said Etsy uses AI to develop a \u201cdeep\u201d understanding of its inventory, its buyers and their intents. Addressing those three aspects together \u201creally amplifies the value of the 100 million-plus listings that we have on the marketplace,\u201d Goyal said.<\/p>\n<p>She also noted that what AI offers in search and discovery has become \u201ca lot better\u201d in the last two years, but even just in the past year.<\/p>\n<h2>How Etsy is working toward agentic commerce<\/h2>\n<p>Etsy has partnered with OpenAI, Google and <a href=\"https:\/\/www.digitalcommerce360.com\/2026\/01\/09\/microsoft-copilot-checkout-agentic-ai-tools\/\" target=\"_blank\" rel=\"noopener\">Microsoft<\/a> on enabling agentic commerce. In January, Etsy announced it would <a href=\"https:\/\/www.digitalcommerce360.com\/2026\/01\/15\/etsy-selling-through-google-ai-mode-gemini\/\" target=\"_blank\" rel=\"noopener\">sell directly through Google AI Mode<\/a>.<\/p>\n<p>Etsy is also one of the backers of Google\u2019s <a href=\"https:\/\/www.digitalcommerce360.com\/2025\/09\/19\/google-ai-payments-protocol-ap2\/\" target=\"_blank\" rel=\"noopener\">Agent Payments Protocol (AP2)<\/a>, along with <a href=\"https:\/\/www.digitalcommerce360.com\/2025\/10\/16\/visa-mastercard-both-launch-agentic-ai-payments-tools\/\" target=\"_blank\" rel=\"noopener\">Mastercard<\/a>, <a href=\"https:\/\/www.digitalcommerce360.com\/2025\/10\/28\/paypal-agentic-commerce-ai-driven-shopping-services\/\" target=\"_blank\" rel=\"noopener\">PayPal<\/a>, <a href=\"https:\/\/www.digitalcommerce360.com\/2026\/04\/14\/american-express-agentic-commerce-developer-kit-purchase-protection\/\" target=\"_blank\" rel=\"noopener\">American Express<\/a>, Coinbase, <a href=\"https:\/\/www.digitalcommerce360.com\/2026\/04\/13\/salesforce-pilot-integration-openai-chatgpt\/\" target=\"_blank\" rel=\"noopener\">Salesforce<\/a>, <a href=\"https:\/\/www.digitalcommerce360.com\/article\/shopify-revenue-gmv\/\" target=\"_blank\" rel=\"noopener\">Shopify<\/a> and\u00a0 Cloudflare.<\/p>\n<p>\u201cWe think that agentic commerce presents a really meaningful potential incremental discovery channel for Etsy,\u201d Goyal said.<\/p>\n<p>She called AI-powered platforms \u201ca very strategic area\u201d for the marketplace. She also noted that Etsy traffic from agentic AI sources had grown 15x year over year in its fiscal Q4. Still, that growth came from \u201ca really tiny base, so it still makes up only less than a percentage of our traffic.\u201d<\/p>\n<div id=\"attachment_1358469\" style=\"width: 812px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1358469\" class=\"wp-image-1358469 size-full\" src=\"https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation.png\" alt=\"Etsy highlights the different ways it's using AI and testing agentic commerce integrations. | Image credit: Etsy fiscal Q4 2025 presentation\" width=\"802\" height=\"412\" srcset=\"https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation.png 802w, https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation-300x154.png 300w, https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation-768x395.png 768w, https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation-90x46.png 90w, https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation-60x31.png 60w, https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation-200x103.png 200w, https:\/\/www.digitalcommerce360.com\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation-600x308.png 600w\" sizes=\"auto, (max-width: 802px) 100vw, 802px\" loading=\"lazy\"\/><\/p>\n<p id=\"caption-attachment-1358469\" class=\"wp-caption-text\">Etsy highlights the different ways it\u2019s using AI and testing agentic commerce integrations. | Image credit: Etsy fiscal Q4 2025 presentation<\/p>\n<\/div>\n<p>What Etsy has seen from generative AI-referred traffic, though, is higher purchase intent, average order value (AOV) and a \u201cstrong flow-through from this channel,\u201d Goyal said. She said that means consumers are discovering Etsy items via generative AI platforms and going to Etsy \u201cto learn more and engage more deeply.\u201d<\/p>\n<p>Etsy chief financial officer Charles Baker, also speaking at that conference, echoed that AI agents have been \u201ca great source of pass-through traffic.\u201d<\/p>\n<p>\u201cWhile we\u2019re excited about the agentic checkout on OpenAI or on other destinations, what we\u2019re seeing is a lot of customers say, \u2018I need a little bit more information\u2019 \u2026 So there has been a very strong flow-through of traffic on to Etsy where people are looking for a little bit more information, which only we have, about those goods and the connection to the seller,\u201d Baker said.<\/p>\n<h2>Etsy addresses agentic AI outside of transactional moments<\/h2>\n<p>Goyal said the conversation around AI agents \u201cis largely centered on off-platform opportunities presented by agentic commerce. But I actually think the most exciting thing that this new technology offers is really improving the experience on Etsy.\u201d<\/p>\n<p>She said agentic AI is \u201cexciting\u201d as an on-site tool because it makes consumers \u201ccomfortable\u201d with a different interface. She said agentic platforms train consumers to use a \u201cmore conversational interface as they\u2019re searching and exploring content.\u201d<\/p>\n<p>Etsy experimented with conversational experiences \u201ca couple years ago,\u201d Goyal said, adding that \u201cit wasn\u2019t very effective\u201d at the time. Now, consumers are more comfortable with conversational commerce, she said.<\/p>\n<p>\u201cThat unlocks a lot of opportunities\u201d through agentic platforms as well, she said.<\/p>\n<p>In addition to the buyer side, Goyal said \u201cthere\u2019s a huge opportunity to apply the same technology and the same interface to the seller side of our experience and to our internal teams.\u201d<\/p>\n<h2>How is Etsy using AI for advertising?<\/h2>\n<p>Baker said the strength of Etsy\u2019s advertising model reflects its technology to match ads and \u201cthe nature of the search query.\u201d He said there are multiple answers to most consumers\u2019 search queries about Etsy\u2019s inventory. Baker also stressed the value of being at the top of the list in search results.<\/p>\n<p>That value \u201cexists even as traffic is coming through from agentic AI,\u201d Baker said.<\/p>\n<p>\u201cWe\u2019re trying to show up where buyers start their shopping missions,\u201d\u00a0 he added. \u201cSo this means being at the forefront of what\u2019s happening in agentic commerce.\u201d<\/p>\n<p>In addition, he said it means being more present than before on social media, moving advertising spending from linear TV to streaming, and focusing on its mobile app \u201cas a way to have direct, non-intermediated conversations, marketing conversations with our buyers.\u201d<\/p>\n<p>On its mobile app, AI factors into how Etsy applies personalization and targeting, as well as improving the match between advertised products and consumers.<\/p>\n<p><em> Editor\u2019s note:\u00a0<a href=\"https:\/\/subscription.digitalcommerce360.com\/ecommerce-newsletter-subscriptions\" target=\"_blank\" rel=\"noopener\">Subscribe to our retail newsletter<\/a>\u00a0to make sure you see each weekly edition of\u00a0<a href=\"https:\/\/www.digitalcommerce360.com\/topic\/ecommerce-trends\/\" target=\"_blank\" rel=\"noopener\">Ecommerce Trends<\/a>.<\/em><\/p>\n<h2 id=\"toc-item-article-post-id-1358206--3\"><strong>Do you rank in our databases?\u00a0<\/strong><\/h2>\n<p><em><a class=\"fui-Link ___1idfs5o f3rmtva f1ewtqcl fyind8e f1k6fduh f1w7gpdv fk6fouc fjoy568 figsok6 f1hu3pq6 f11qmguv f19f4twv f1tyq0we f1g0x7ka fhxju0i f1qch9an f1cnd47f fqv5qza f1vmzxwi f1o700av f13mvf36 f1cmlufx f9n3di6 f1ids18y f1tx3yz7 f1deo86v f1eh06m1 f1iescvh ftqa4ok f2hkw1w fhgqx19 f1olyrje f1p93eir f1h8hb77 f1x7u7e9 f10aw75t fsle3fq f17ae5zn\" title=\"https:\/\/www.digitalcommerce360.com\/apply-global-ecommerce-rankings\/\" href=\"https:\/\/www.digitalcommerce360.com\/apply-global-ecommerce-rankings\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Link Submit your data\" data-feathr-click-track=\"true\" data-feathr-link-aids=\"[&quot;5f29b0538d5a4b9c628148bd&quot;],5f29b0538d5a4b9c628148bd\">Submit your data<\/a>\u00a0and we\u2019ll see where you fit in our next ranking update.<\/em><\/p>\n<h2 id=\"toc-item-article-post-id-1358206--4\"><strong>Sign up<\/strong><\/h2>\n<p><em>Stay on top of the latest developments in the\u00a0<a href=\"https:\/\/www.digitalcommerce360.com\/internet-retailer\/\" target=\"_blank\" rel=\"noopener\" data-feathr-click-track=\"true\" data-feathr-link-aids=\"5f29b0538d5a4b9c628148bd\">online retail<\/a>\u00a0industry. 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Be the first to know when Digital Commerce 360 publishes news content.<\/em><\/p>\n<p><a class=\"simplefavorite-button\" data-postid=\"1358451\" data-siteid=\"1\" data-groupid=\"1\" data-favoritecount=\"0\" style=\"box-shadow:none;-webkit-box-shadow:none;-moz-box-shadow:none;color:#ffffff;\"><i class=\"sf-icon-star-empty\"\/> Favorite<\/a>\t\t\t\t\t\t<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><script async src=\"\/\/www.tiktok.com\/embed.js\"><\/script><br \/>\n<\/p>\n<hr>\n<p><strong>Published by Dralys Blog \u2013 Stories | Insights | Innovation<\/strong><\/p>\n<p>Discover more on <a href=\"https:\/\/www.dralysstore.com\" target=\"_blank\">DralysStore.com<\/a><\/p>\n<div class=\"pld-like-dislike-wrap pld-template-2\">\r\n    <div class=\"pld-like-wrap  pld-common-wrap\">\r\n    <a href=\"javascript:void(0)\" class=\"pld-like-trigger pld-like-dislike-trigger  \" title=\"\" data-post-id=\"78974\" data-trigger-type=\"like\" data-restriction=\"no\" data-already-liked=\"0\">\r\n                        <i class=\"fas fa-heart\"><\/i>\r\n                <\/a>\r\n    <span class=\"pld-like-count-wrap pld-count-wrap\">    <\/span>\r\n<\/div><\/div>","protected":false},"excerpt":{"rendered":"<p>One of the ways Etsy has been steadily growing its revenue while its gross merchandise sales (GMS) decline is by capitalizing on artificial intelligence (AI) capabilities. That includes&#8230;<\/p>\n","protected":false},"author":10,"featured_media":78975,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[601,38],"tags":[78,45,10],"class_list":["post-78974","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-artificial-intelligence-innovation","category-e-commerce-shopping","tag-ai","tag-innovation","tag-technology"],"acf":[],"jetpack_featured_media_url":"https:\/\/dralysstore.com\/blog\/wp-content\/uploads\/2026\/04\/Etsy-AI-slide-presentation.png","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/posts\/78974","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/comments?post=78974"}],"version-history":[{"count":1,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/posts\/78974\/revisions"}],"predecessor-version":[{"id":78976,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/posts\/78974\/revisions\/78976"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/media\/78975"}],"wp:attachment":[{"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/media?parent=78974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/categories?post=78974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dralysstore.com\/blog\/wp-json\/wp\/v2\/tags?post=78974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}