Faced with competition from giant e-tailers, even a platform specialised in the sale of artisanal products like Etsy must utilise artificial intelligence (AI), said Etsy’s CEO Josh Silverman at the recent Web Summit in Portugal.

“We couldn’t make Etsy work without AI,” said Silverman, interviewed at the digital tech event in Lisbon.

US-based Etsy was launched nearly 20 years ago, and claims to feature some 7 million vendors and more than 90 million buyers.

But competition in Etsy’s sector is tough, with leviathans like Amazon, Temu and Shein in the picture, not to mention furniture and home decoration stores.

According to Silverman, AI is indispensable to check the products offered for sale, as well as to ensure that site searches yield the right results.

“A traditional search engine can’t tell the difference between a wedding dress and a wedding dress hanger,” said Silverman. “AI understands the difference (…) and only shows you wedding dresses,” he added.

According to Silverman, who took charge of the group in 2017, a level of linguistic understanding “close to that of humans” is necessary to make the distinction, and justifies deploying AI on Etsy.

Artisans vs AI?

The use of AI technology, making it possible to generate all kinds of content on a simple request in everyday language, is also mired in controversy. Objects created using AI (posters, artworks, clothes, etc.) abound on the site, which is dedicated to artisanal products.

After “intense” internal debate, Etsy decided not to ban AI-created products, according to Silverman, although vendors must acknowledge when they use AI for their products.

To allay concerns expressed by its artisan-vendors, Etsy has introduced new rules stipulating that all items on sale must have been subjected to human supervision at some stage of the production, design or selection process. This controversy is part of a broader issue regarding the positioning of Etsy, which began as a site selling artisanal products and is now criticised for turning back on its origins, seeking to maximise profits by featuring a growing number of mass-produced items.

Two years ago, Etsy’s vendors reacted with outrage when the platform increased the fees it charged on each transaction to 6.5%, from 5%.

More than 10,000 of them decided to shut their digital shops for a week in a new kind of “strike,” accusing Etsy of “bleeding them dry.”

“On other platforms, vendors are merchants who are simply looking to sell something, and they can switch from selling X to selling Y at a snap of their fingers,” Silverman said. “Our vendors are artists and designers. Doing business isn’t what they thrive on, they thrive on being artists,” he added, underlining that 99.5% of Etsy vendors didn’t go on strike two years ago.

Silverman, a former boss of Skype, believes that in the end, the interests of Etsy and its vendors are aligned. “Our vendors enlist us to help them sell more, and that’s what we do,” he concluded.