Dive Brief:
- Etsy is positioning itself for a generative AI future as the company goes through a leadership transition, executives said on a Q3 2025 earnings call last week. CEO Josh Silverman, who led Etsy for nearly 9 years, will step down and Kruti Goyal, president and chief growth officer, will take his place in January.
- The company became the first live partner for ChatGPT’s instant checkout feature in September. Users can now buy items on Etsy directly through the AI platform.
- The partnership with OpenAI is a “great example of how we're capitalizing on the evolving shoppers journey,” Goyal said on the earnings call. It provides “an early foothold in a fast-growing high-intent discovery channel and helps to create another seamless path from inspiration to purchase.”
Dive Insight:
Throughout the CEO transition, the marketplace remains dedicated to delivering tangible value to customers and supporting sustainable growth, Goyal said.
The company’s better than expected financial results are proof that its customer-centric priorities “are starting to gain traction,” Silverman said.
Still, Etsy marketplace gross merchandise sales were down 2.4% year over year to $2.43 billion, according to an earnings release. Meanwhile, Depop saw massive growth, with gross merchandise sales up 39.4% year over year to $292 million globally and up 59% in the United States.
As more shoppers use generative AI tools, Etsy is ensuring its presence in ChatGPT. While agentic visits represent “a small slice of e-commerce traffic,” that share is growing, Goyal said. These Etsy buyers have higher purchase intent than those using traditional search, according to an Etsy analysis.
Over time, Etsy executives expect integrations like the one with OpenAI to drive incremental growth and brand consideration for Etsy.
Etsy’s efforts to improve its app, including a redesigned home screen, simpler navigation and revamped discovery feed, have paid off in sales. App gross merchandise sales outperformed non-app gross merchandise sales by 13 percentage points in the third quarter, while app home gross merchandise sales grew 20% year over year, Goyal said.
App users are also more engaged. In the third quarter, Etsy's app users on average visited about five times more often than non-app users, viewed three times more pages per visit and were 1.5 times more likely to convert with a purchase, according to CFO Charles Baker.
“As we've said before, the app platform allows us to deliver a more engaging and personalized experience, form stronger, more direct relationships with buyers and increased customer lifetime value,” Baker said.
App downloads grew 9% year over year, according to Baker. And the app is contributing to 46% of gross merchandise sales, up from 42.8% a year ago.
The marketplace aims to encourage loyalty among its most frequent shoppers and is experimenting with a loyalty program. In August, it launched a beta version of its Etsy Insider Loyalty program, and on the earnings call, executives announced a second beta iteration of the program would launch Tuesday.
“What we've learned from the initial version is that the rewards that we offered both drove adoption of the loyalty program and drove a meaningful uplift in frequency of engagement and purchasing,” Goyal said. “What we're changing in this next version is we're really reorienting it to really focus on our more frequent buyers.”
With Etsy’s top buyers in mind, the company changed the rewards structure, providing shipping discounts and 5% back in Etsy credit on every purchase.
“What we're looking for is, again, to see continued adoption, frequency of engagement, frequency of purchasing and over time, renewal rates in that loyalty program,” Goyal said.
