Etsy Tests AI Assistant for Sellers as It Expands Product Discovery Tools

Etsy is testing an artificial intelligence assistant to give sellers insights, expanding its use of AI in shopping and merchant tools as it sets rules for AI-created listings.

CEO Kruti Patel Goyal outlined the company’s AI work in an Oct. 28 shareholder letter. Etsy uses AI and machine learning to personalize product discovery and has introduced tools for listing creation and buyer communications. The seller assistant is in testing.

“AI will fundamentally change how people discover and shop, and we’re leaning in,” Goyal wrote.

Etsy counted 87.5 million active buyers as of Sept. 30, up 1% from a year earlier and 0.6% from the prior quarter. The company said this was its first year-over-year increase in two years. The measurement period ended before Etsy announced its updated AI listing rules on Oct. 22.

Most product listings must show the actual item in at least one unedited photograph taken in a real setting. They also prohibit listings generated by bots without human involvement and AI-generated functional guides, including patterns, recipes and instructions. Listings for those guides must show a real result made using the instructions. Etsy’s earlier listing-rule update detailed the restrictions.

Etsy permits AI creations prompted by sellers when they disclose the AI use. Sellers cannot present those creations as handmade or entirely their own work. The marketplace also allows merchants to have outside producers make designs they created, and recognizes goods merchants make, design, select or source.

Etsy said many active buyers have difficulty identifying listings that include AI-generated content, describing that as a top-three barrier to shopping more often. The company’s new option for reporting suspected misleading AI imagery will initially help it understand buyer concerns rather than prompt immediate enforcement. Etsy plans to expand removals as its detection tools improve.