App-focused strategy intensifies following continual drops in Etsy's performance
Etsy Embraces AI and Mobile Strategies to Boost Marketplace Performance
Etsy, the popular online marketplace for unique and handmade goods, is enhancing its marketplace performance by integrating AI-powered tools and mobile strategies. This move aims to automate processes, personalize experiences, and improve predictive analytics.
The company is leveraging AI in several ways to boost search relevance and seller efficiency. Sellers can now automatically generate and optimize product titles, descriptions, and tags with high-engagement keywords, thanks to AI tools. This improvement increases their visibility in Etsy’s search engine and on Google.
AI is also being used for inventory and pricing automation. By predicting demand patterns, AI helps manage inventory and dynamically adjust prices to maintain competitiveness and reduce stock issues. In customer service, chatbots and automated responses handle routine inquiries, allowing humans to focus on complex support.
Etsy is also prioritizing a seamless, user-friendly mobile experience. While specific mobile strategy details for 2025 have not been disclosed, it's clear that Etsy invests in mobile-optimized search and shopping features, app-driven notifications, and personalized marketing campaigns to boost retention and conversion.
Tools like Marmalead offer predictive keyword data, updated hourly, to help sellers adapt their listings to emerging and seasonal search trends. Automation platforms like AutoDS integrate with Etsy to streamline dropshipping and print-on-demand stores, helping sellers scale more efficiently by reducing repetitive tasks.
Etsy's CEO, Joshua Silverman, has stated that the mobile app is crucial to the company's strategy for boosting its flagship marketplace. The new approach aims to understand listings, users, and their activity more deeply to deliver better search results.
In addition, Etsy's smaller U.K.-based Depop marketplace showed improvement, with a 35.3% increase in GMS, reaching $249.6 million. The U.S. GMS for Etsy grew by 54%.
However, Etsy's flagship marketplace experienced a 5.4% year-over-year decline in gross merchandise sales (GMS), resulting in $2.4 billion. The number of active buyers on Etsy's flagship marketplace decreased by 4.6% to 87.3 million in Q2. Etsy's net income was $28.8 million in Q2, down by $24.2 million compared to last year.
Etsy has sold Reverb, a musical instrument site it acquired six years ago. The company aims to bring sellers to the forefront and create more seamless connections between them and buyers. Etsy's Chief Technology Officer, Rafe Colburn, is back at the company.
Etsy is also shifting its marketing strategy. It aims to reduce its marketing via linear cable television to a low single-digit percentage of its U.S. brand media spend and shift more towards marketing via streaming platforms.
These AI implementations and continuous mobile experience improvements allow Etsy to optimize search relevancy, personalize user interactions, automate seller workflows, and ultimately drive higher marketplace performance in 2025.
- Etsy's Chief Technology Officer, Rafe Colburn, believes that music could find a significant place on Etsy's platform, as the company has sold its musical instrument site, Reverb, to focus more on handmade goods and unique products.
- In finance, Etsy is reallocating its marketing budget, moving away from linear cable television to a low single-digit percentage, and increasing investment in marketing via streaming platforms.
- AI technology is also being applied to the music industry, as Etsy explores possibilities for incorporating music into its marketplace, aiming to create more connections between sellers and buyers, ultimately enhancing the overall user experience.
