What: Etsy has launched "Gift Mode," an AI-based service designed to curate personalized gift ideas for shoppers.

Why it is important: This innovation represents Etsy's strategic move to become a major destination for gift shopping, leveraging technology to enhance the customer experience and differentiate itself in the competitive e-commerce market.

Etsy has unveiled a new service called "Gift Mode," which uses a combination of human curation and machine learning to suggest gift ideas based on the recipient's interests. Users provide details about the recipient, such as their relationship, occasion, and interests, and the service generates gift options tailored to over 200 different recipient personas. Additionally, "Gift Mode" allows gift givers to create a "gift teaser" for recipients, complete with a note, tracking information, and a preview of the gift. This service is part of Etsy's broader strategy to establish itself as a key player in the gifting market, aiming to increase its visibility among U.S. shoppers, only 12% of whom currently consider Etsy for gift shopping. The launch of "Gift Mode" comes at a time when Etsy is undergoing significant restructuring, including workforce reductions and changes in its executive team.

Etsy launches AI-based gift recommendation service