So here’s the twist: Etsy, the go-to online marketplace for quirky, handcrafted goods and personalised everything, is pressing pause on those polished TV ads you’ve probably seen during the holidays. Instead, it’s doubling down on something a little less flashy but potentially a lot more powerful—AI-powered search. Why? Because people aren’t watching ads. They’re searching. And Etsy wants to meet them where they are.
According to The Wall Street Journal, Etsy is now shifting its budget and focus toward improving how its products show up in search engines like Google, and investing in AI tools to get better at understanding what customers really want—even when they don’t quite know how to ask for it [1].
Why the Pivot?
Let’s be honest—TV ads are expensive. Flashy, yes, but fleeting. Etsy CMO Brad Minor put it plainly: the platform is rethinking its media mix, putting the spotlight on search marketing and AI instead. That’s partly because online shopping behaviour has changed. People aren’t waiting for a brand to show them something cool—they’re typing “handmade cat sweater for sphynx” into Google at 2 a.m. and hoping the algorithm gets it right.
And Etsy? Well, it’s got millions of sellers and even more niche items. Matching the right buyer to the right product is like matchmaking at scale. AI just makes sense here.
The AI Wild Card
Here’s the kicker: Etsy’s leaning on generative AI to help predict what buyers are after—even if the query is vague, oddly worded, or downright weird. That means improving Etsy’s own on-site search and juicing up product listings with AI-enhanced copy and tagging. It’s not just about better ads, it’s about a smarter marketplace.
The company has already rolled out a host of internal AI tools this year to help sellers write product descriptions and enhance imagery. And it’s not alone in that journey. Retail giants like Amazon and Walmart have also poured money into AI-enhanced discovery, hoping to make online shopping more intuitive, even for the indecisive.
But Will It Work?
Here’s where it gets real. AI is no magic wand. Etsy’s faced some growing pains over the last few quarters. Active buyers dropped by 3% year-over-year. Gross merchandise sales? Also down. Skeptics might wonder: is AI the solution, or a shiny distraction?
That said, Etsy is hopeful. This isn’t about gimmicks—it’s about being visible. In an era when TikTok trends and Pinterest boards drive traffic, Etsy wants to make sure that when someone searches “cottagecore mushroom lamp,” it’s one of their sellers who shows up on top. Not some big-box knockoff.
And hey, they’ve still got heart. Unlike Amazon, Etsy lives on the charm of individual creators. AI, in this context, isn’t meant to sterilise the experience—it’s meant to surface the right handmade product from a real person, faster and more accurately.
A Bigger Trend?
Etsy’s move is part of a broader shift across the e-commerce world. Even Shopify recently unveiled its AI shopping assistant, Sidekick, which helps store owners automate everything from product listings to customer replies. Personalisation is no longer a “nice-to-have”; it’s table stakes.
Meanwhile, TikTok’s new search ads are taking off, giving brands a shortcut into Gen Z’s scroll-obsessed psyche. Google’s also bringing generative AI into shopping searches, giving users curated suggestions powered by its Gemini AI.
Etsy’s pivot, then, isn’t just about ditching TV—it’s about surviving in a noisy, AI-driven, search-first world.
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