Etsy is aiming to implement AI use across the business without alienating shoppers and sellers who care deeply about human creativity.
“We believe AI will fundamentally change how people discover and shop, and we are leaning into that change,” Etsy CEO Kruti Patel Goyal said on a call with analysts Wednesday. “For Etsy, the opportunity is to use this technology to help buyers discover items that feel uniquely right for them, and to help our sellers reach more customers and grow their businesses. And there's an interesting paradox here: as AI makes it easier to create and replicate products at scale, we believe the human creativity, craftsmanship, and connection that have always made Etsy special will matter even more.”
AI and machine learning are helping the e-commerce marketplace better understand shoppers’ interests and improve their discovery experience, the executive added.
In addition to the beta-launch of a seller assistant tool, the company is expanding its gifting tool experience based on learnings from its Gifting Assistant test, according to a shareholder letter Wednesday.
Etsy last week rolled out new rules about how sellers can utilize AI within product listings in an effort to prevent AI-generated creations from overwhelming the marketplace. The changes include a ban on AI-generated functional guides — such as patterns, recipes and instructions — and a requirement that listings include at least one real product image.
Details about Etsy’s approach to AI advancement came with strong gains in the third quarter. Etsy’s Q3 gross merchandise sales jumped 8.8% year over year to $2.6 billion and revenue increased nearly 11% to $692.5 million.
The company’s active buyers grew for the first time in two years, increasing 1% compared to last year to about 88 million on a trailing 12-month basis.
On the back of a strong quarter, Etsy refined its forward-looking guidance. It now expects full-year gross merchandise sales to increase about 7%, compared to its previous guidance of growth in “the mid-single-digit range.” Additionally, Etsy projects Q4 GMS growth in a range from 5% to 7%.
