Etsy Launches AI-Powered Shopping Tool for Selecting Gifts

Etsy has launched a hub that uses artificial intelligence (AI) and human curation to help shoppers find gifts for any occasion.

The new Gift Mode is interactive and helps shoppers discover gifts that align with the recipient’s specific interests, Etsy CEO Josh Silverman wrote in a Wednesday (Jan. 24) announcement.

“Gift Mode helps to solve two of the most vexing problems for givers,” Silverman said. “One, finding the perfect gift, something that feels creative and personal even if the gifter doesn’t doesn’t know a ton about the recipient. Two, relieving the stress around procrastination and the gift arriving on time.”

To help solve these challenges, Gift Mode allows shoppers to enter information about the recipient and then browse items available from Etsy sellers that have been selected by the company’s machine learning (ML) technology, according to the announcement.

Etsy has developed more than 200 personas, and the technology can suggest potential gifts appropriate for each one, the announcement said. For example, the personas include “The Music Lover,” “The Adventurer” and “The Pet Parent.”

For last-minute shoppers, Gift Mode can send a gift page at a time selected by the gift-giver that lets the recipient know that a gift is on the way and provides tracking information, per the announcement.

“Gift Mode makes it effortless to be thoughtful by harnessing the power of our expansive collection of [more than] 100 million items and bringing curation to scale,” Silverman said in the announcement.

For Etsy, this new feature is designed to position the platform as “the destination for gifting,” according to the announcement. With it, the company aims to increase the share of shoppers who think of Etsy as a place for gifts from the current 12%.

Gift Mode will be highlighted in Etsy’s marketing efforts, including a Super Bowl commercial, the announcement said.

PYMNTS Intelligence has found that generative AI is playing a significant role in personalizing the retail shopping experience.

Ninety-two percent of companies are using AI-powered personalization to drive growth, and 44% of consumers are open to using chatbots for product information before making purchase decisions, according to “What Generative AI Has in Store for the Retail Industry,” a PYMNTS Intelligence and AI-ID collaboration.

Etsy has been working to fine-tune the shopping experience it offers to position itself as a go-to destination for merchandise at a time when the macroeconomic conditions are challenging.

“There’s no doubt that this is an incredibly challenging environment for spending on consumer discretionary items,” Silverman said in November. “It’s therefore important to acknowledge that this volatile macro climate will make it challenging for us to grow this quarter.”

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