Etsy Built AI Profiles for 70 Percent of Shoppers
The company is leveraging predictive modeling to refine search and recommendations across its marketplace.
Updated on Sept. 29, 2026 in Artificial Intelligence
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Etsy has constructed detailed customer profiles for more than 70 percent of its 90 million shoppers using artificial intelligence. This initiative aims to optimize search and recommendation algorithms to counter a recent sales slowdown.
Why it matters
The deployment seeks to improve advertising effectiveness and overall customer retention by mapping purchase histories and individual shopping habits. This strategy follows a period of workforce reductions and marketplace adjustments designed to restore growth.
Etsy has mapped behavior for 63 million users out of its 90 million total shopper base. The platform is currently integrating ChatGPT and additional AI tools to automate checkout and refine ad targeting for its 100 million listings.
The players
Etsy
A global marketplace platform that hosts over 100 million listings and manages 90 million shoppers.
Lanny Baker
The CFO of Etsy who provided formal details regarding the company's technical shift toward AI-based customer profiling.
eBay
An e-commerce giant that acquired the Depop platform from Etsy in July 2026.
The details
The profiles function by aggregating granular data on purchase histories, user preferences, and navigational habits across the site. By processing these inputs, the company's recommendation engine attempts to predict user intent to improve search relevance. Etsy is also exploring the use of ChatGPT and other generative AI platforms to streamline checkout flows and advertising campaign management.
Timeline
July 2026: Etsy completed the sale of its Depop platform to eBay.
August 2026: The company announced a 12 percent reduction in its total workforce.
September 2026: CFO Lanny Baker provided formal details on the company's AI-driven strategy.
The Tech Race
The move follows a broader industry trend where marketplaces are pivoting from broad search features to individualized, AI-generated shopping feeds to improve user retention. Etsy remains in a direct competition for consumer spending against other specialized marketplaces that have also integrated advanced machine learning for advertising.
Shoppers will likely see more personalized recommendation feeds and search results as the AI model is applied to the remaining 30 percent of the user base. These technical changes are intended to simplify the purchasing process, though customers who recently absorbed seller price increases may see little change in final checkout costs.
The takeaway
Etsy is betting that predictive customer profiling can reverse recent sales plateaus and increase efficiency per listing. Investors and users should monitor whether these AI-driven personalization efforts correlate with an increase in quarterly marketplace revenue in the coming fiscal reports.
Further reading
For more background on how machine learning is altering digital commerce, visit the Artificial Intelligence section.
Source note: This article includes information reported by The Independent.
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