Etsy Launches AI-Powered ‘Gift Mode’ For Personalized Gift Ideas

For the indecisive among us, great news! 2024 is the year for generative shopping, which means less thinking (and scrolling) and more ‘adding to cart’.

Etsy has this week launched ‘Gift Mode’, making it the latest online retailer to provide AI functionality that makes thinking of and searching for products even easier.

Earlier this month Microsoft helped Walmart launch its smarter AI search for curated and personalized items, which was followed by Amazon’s new generative AI shopping tool that can answer user questions about a product.

What Is Gift Mode?

Put simply, Gift Mode is an online quiz that poses questions to the user in order to create a curated list of gift options.

It asks who you’re shopping for, with categories such as sibling, partner, teacher, or co-worker, and what the occasion is, like a birthday or anniversary. 

Users will then be asked to select three or more categories that the recipient is interested in, with 15 topics currently available including arts and culture, sports, food, and travel.

Based on these answers, Etsy will provide a series of gift guides that feature products listed on the site. The guides have been segmented into specific categories such as “The Self Care Enthusiast” for those who prioritize their health and wellbeing, or The Foodie for those that love to cook and eat.

The gift guides are based on more than 200 different personas and, according to Etsy’s VP of Product Tim Holley, the company plans to introduce new interests and personas based on emerging trends.

Along with Gift Mode is a Gift Teaser option for users to share a sneak peek of the item with its recipient. This is done via email with the aim that people won’t miss out on the excitement in case a gift doesn’t arrive in time for a specific event.

Powered By OpenAI’s GPT-4

Having acquired natural language-processing startup Blackbird Technologies back in 2016, Etsy has used machine learning algorithms within its search for years now. This latest step in development is a significant one however.

During an earnings call with investors back in May 2023, Etsy CEO Josh Silverman said: “We’ve been at the cutting edge of search technology for the past several years and while we use large language models today, we couldn’t be more excited about the potential of new or large language models and generative AI to further accelerate the transformation of Etsy’s user experience”. 

That cutting edge includes machine learning powered by OpenAI’s GPT-4, as well as human curation. 

According to Holley, GPT-4 built and scaled Gift Mode using Esty’s existing machine learning training and inference stack, which are the forces behind its current search and recommendation functionality. 

However, Gift Mode has been given specific adjustments to be sure it includes “gifty” suggestions, and adds preference to listings that are sold by sellers with excellent customer service.

Built To Relieve Gift-Giving Anxiety

Etsy features products from over six million sellers and has more than 90 million customers. According to a survey the company conducted last year, 71% of respondents felt anxious when shopping for gifts. The hope with Gift Mode is to relieve some of those worries.

Holley stated: “We built Gift Mode on the insight that while plenty of brands sell items that make nice gifts, there isn’t a dedicated and scaled shopping experience that addresses these pain points while helping shoppers find truly thoughtful, meaningful gifts. We believe these products will help people discover and more easily purchase gifts from independent sellers”.

The company plans to ramp up investment and development to both Gift Mode’s capabilities and its gifting space more widely.