Etsy announced Gift Mode, a tool for finding gifts using AI and human curation, on Jan. 24. It’s part of a push to become a top destination for gifting, the online marketplace said in a press release.

“There are millions of high-quality items on Etsy in hundreds of categories that make great gifts for every occasion, budget, and recipient’s interests. Yet, we know that we aren’t often the first place people think of or come to when they’re on a gifting journey,” CEO Josh Silverman said in a statement. He notes that only 12% of U.S. shoppers say Etsy is a top place to shop for gifts, citing internal Etsy research.

Etsy ranks No. 17 in Digital Commerce 360’s Global Online Marketplaces database. The database ranks the 100 largest such marketplaces by third-party GMV. Digital Commerce 360’s 2023 Global Online Marketplaces Report includes key insights into the biggest players in the database.

How does Etsy Gift Mode work?

The tool prompts the gift giver to answer a few questions about the gift recipient. First, Etsy asks who the gift is for, with more than 20 possible responses including husband, wife, mother, and grandparent. Then, the giver selects the gifting occasion and can choose from several categories the recipient is interested in. There are 15 categories, including travel, sports and crafting. Gift Mode prompts the user to choose at least three categories for the best results.

Etsy uses machine learning to sort the intended gift recipient into one of 200 personas based on answers to those questions. Then it surfaces gift recommendations for that person. For example, Gift Mode suggests matching pajamas or custom pet portraits for someone with the “Pet Parent” persona.

Gift Mode also has features for the recipient. The gift giver can opt in to create a teaser for the recipient, which can include a note, tracking information, and a sneak peek at the item, Etsy says. The marketplace positions this as an option for last-minute gifts that might not arrive before the intended date.

Etsy aims for more gifting consideration

This is just one part of Etsy’s plan to grow as a gifting destination, the marketplace said.

“Our vision is to create a gift-shopping experience that supercharges everyone’s gift-giving potential. From consideration, to discovery, to logistics, we will be a tailor-made, one-stop experience for every gifting occasion. Our first order of business is creating a product experience built specifically with gifting in mind,” Silverman said.

Etsy will continue investing in Gift Mode and adding new features, he said. The marketplace also plans to heavily market the new tool, with plans for TV advertisements during the NFL playoffs and Super Bowl.

In a November earnings call, Silverman had mentioned other ways Etsy was hoping to grow its gift sales. He noted an improved gift finder that predates Gift Mode, and an on-time delivery guarantee for gifts. In May, Etsy launched wedding registries.

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