Can AI Transform Etsy Into a Gift-Giving Destination?

Etsy is planning to use its first Super Bowl commercial to introduce an AI-powered Gift Mode shopping feature that helps users find gifts tailored to the receiver’s interests.

The online tool asks the gift giver who they are buying for, for what occasion (holiday, birthday, graduation, etc.), and to select a few of the receiver’s interests. AI machine-learning technology, paired with human curation, then generates a series of gift guides across select personas — i.e., “The Music Lover,” “The Adventurer,” and “The Pet Parent” — to help the giver “find thoughtful gifts for all of their loved ones,” Etsy said on its community site.

AI has long supported Etsy’s search capacity, but the new tool embraces OpenAI’s GPT-4.

“OpenAI’s GPT-4 enabled us to expand to such a wide range of gifting missions,” Tim Holley, Etsy’s VP of product, told TechCrunch. “For this use case, we included specific adjustments to make sure listings included are ‘gifty’ and add preference to listings that are predicted to be high quality and sold by sellers who offer excellent customer service.”

Josh Silverman, Etsy's CEO, said in a press release that Gift Mode eases the stress of finding a gift “that feels creative and personal even if the giver doesn't know a ton about the recipient.” A recent Etsy survey found that 71% of respondents felt anxious when shopping for gifts within the past year.

Particularly supporting late arrivals, the gift giver can send a link to the recipient announcing a gift is coming and provide tracking status. A “reveal” option offers a sneak peek prior to arrival.

Etsy data has found that without prompting, only 12% of U.S. shoppers name Etsy top of mind as the place to shop for gifts. Yet with over 115 million items from 8.8 million active sellers on the platform, Silverman believes Etsy can become a gifting destination.

Silverman told CNBC, “There's no one brand out there that stands for gifting that can be your ‘go to’ over and over again. We think Etsy is incredibly well positioned to be that place.”

Google was among those rolling out AI-generated gift idea tools this past holiday season.

Speaking to Atlanta’s 11Alive, David Schweidel, a marketing professor at Emory’s Goizueta Business School, posited that back-and-forth conversations could be held with GenAI-enabled chatbots to discover and narrow gift suggestions. He said, “You can say here are some details about this person in terms of their likes. They love fragrances; they hate to cook.”