Dive Brief:
- The Etsy app in ChatGPT is running live in beta. It allows users to search and compare Etsy items directly in conversation, Rafe Colburn, chief product and technology officer, wrote in a post on May 5.
- ChatGPT users can tag Etsy and enter their queries to receive relevant search results. From there, they can compare the product recommendations and click through to Etsy, Colburn said.
- The company is also piloting a beta conversational search experience on Etsy to help shoppers find gifts.
Dive Insight:
Etsy’s app debut within ChatGPT marks the company’s deepening relationship with OpenAI. Last September, ChatGPT introduced Instant Checkout, which allowed shoppers to buy items directly in the AI platform. Etsy was the first company to let shoppers make purchases using the tool, quickly followed by Shopify merchants.
By the spring of this year, OpenAI began rethinking the Instant Checkout experience to focus on product discovery. The company “found that the initial version of Instant Checkout did not offer the level of flexibility that we aspire to provide, so we’re allowing merchants to use their own checkout experiences while we focus our efforts on product discovery,” ChatGPT said in a March statement.
During the Instant Checkout integration, Etsy saw ChatGPT was successfully helping its customers discover new items, Colburn said. Shoppers arrived at Etsy after using ChatGPT to learn about products before ultimately buying them, he said.
The retailer is developing conversational search on its own site, in part, because context-driven searches can help shoppers sift through the millions of unique items on its marketplace, Colburn explained.
“Our approach will evolve based on what we learn. We’re showing up in these channels to test, iterate, and understand how to help sellers reach shoppers looking for the meaningful items they offer,” Colburn said. “We won’t figure it out by sitting on the sidelines. We’ll keep showing up where shoppers are, and learning how to make sure Etsy sellers show up there too.”
In addition to Etsy, OpenAI has formed partnerships with other major retailers. Williams-Sonoma began piloting ads on ChatGPT in February to understand how to connect with customers intent on making purchases. In March, Sephora began piloting its app in ChatGPT for U.S. users, enabling customers to receive advice and product recommendations from the platform. That same month, Walmart brought its AI agent, Sparky, to ChatGPT to guide shoppers on their purchase journey.
Other retailers have developed AI tools to steer consumers along their shopping journey as well. Last month, Kohl’s introduced a Gift Finder for Mother’s Day tool using Google Cloud’s Gemini Enterprise for Customer Experience. Also in April, Amazon launched its Join the Chat feature within its Hear the Highlights tool, allowing shoppers to ask AI hosts questions via text or voice while listening to an audio summary of product details.
Etsy’s AI update follows the company’s first quarter results. Its Q1 revenue rose 3% year over year to $631 million, with the Etsy marketplace up over 6% to nearly $433 million. The company’s net income also grew by $33 million from the year-ago quarter to $105 million.
