Etsy CEO Urges Sellers to Refresh Inventory and Prioritize Human Customer Service

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4.30.2026

Quick Facts

Etsy CEO Kruti Patel Goyal delivered her first quarterly letter, urging sellers to refresh inventory and provide superior human service
Q1 2026 revenue hit $631 million with Etsy marketplace up 6% to $433 million, driven by higher spend per buyer
Company launched AI-powered Gift Mode feature using GPT-4 to match users with tailored gift ideas from 100 million listings

Etsy CEO Kruti Patel Goyal called on the marketplace’s sellers to focus on inventory innovation and exceptional customer service in her first quarterly shareholder letter since taking the helm in January 2026.

“Really, the most important things that our sellers can do to add value to the marketplace is continue to innovate at really new inventory to the marketplace and continue to provide really great human service to our buyers,” Patel Goyal said.

The message comes as Etsy reported Q1 2026 revenue of $631 million, with the core Etsy marketplace growing more than 6% to nearly $433 million. Gross merchandise sales rose more than 5% year-over-year to $2.5 billion, though active buyers declined more than 2% to 86.6 million.

Patel Goyal, who previously led Depop where she nearly doubled gross merchandise sales and the buyer base, emphasized Etsy’s commitment to human connection while strategically leveraging AI technology.

“We see just so much exciting opportunity for us to leverage this technology to build a much better, much more personalized experience on Etsy,” she said, adding that AI will help understand inventory, customer tastes, and buying intent.

The company recently launched Gift Mode, an AI-powered feature that generates personalized gift guides from over 100 million items using machine learning, human curation, and OpenAI’s GPT-4. The tool prioritizes listings that are “gifty” and highlights sellers with excellent customer service records.

Etsy faces mounting competitive pressure from Amazon Handmade’s Prime logistics, ultra-cheap offerings from Temu and Shein, and TikTok Shop’s capture of impulse purchases. The broader e-commerce sector experiences “discretionary fatigue” as consumers prioritize essential spending following years of high inflation.

Since selling musical-instrument marketplace Reverb and agreeing to sell Depop to eBay for $1.2 billion, Etsy has refocused on its core marketplace of handcrafted, vintage, and unique merchandise. The company enhanced search in August 2024 to prioritize high-quality sellers and revamped its app experience in April 2025 using AI for more personalization.

CFO Lanny Baker assured analysts that AI expenses will follow “a very rigorous ROI discipline,” with investments focused on GMS growth and long-term user acquisition while maintaining profitability targets.