Etsy And Google Test AI Shopping Tie Up For Demand Recovery

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• Etsy and Google have launched a new agentic commerce experience using the Universal Commerce Protocol, allowing shoppers to buy directly from Etsy inside AI powered search and the Gemini app.

• The integration is designed to keep the full purchase flow within Google surfaces while still connecting buyers to Etsy’s marketplace of unique and handmade goods.

• This launch highlights Etsy’s role in helping shape how AI driven shopping and search may work for both consumers and merchants.

For investors watching NYSE:ETSY, this partnership comes at a time when the stock trades around $45.73, with multi year returns showing declines of 64.7% over 3 years and 79.9% over 5 years. Shorter term performance has also been weak, with a 20.2% decline year to date and a similar 20.1% decline over the past year.

The Google collaboration gives Etsy a fresh way to reach buyers where they start product discovery, inside AI chat and search rather than only on its own app or website. Investors may watch how quickly this experience scales, how visible Etsy listings become within Gemini, and whether it eventually shows up in traffic trends or buyer activity over time.

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📰 Beyond the headline: 4 risks and 3 things going right for Etsy that every investor should see.

This Google partnership plugs Etsy directly into AI-powered product discovery, which is where a growing share of shopping queries now start. Instead of relying only on its own app, Etsy can surface its long-tail of handmade and vintage items within Gemini chats and AI Mode in Search, with checkout kept inside Google’s interface. That could matter for a business that has been leaning on Etsy-funded coupons and higher marketing spend to re-engage buyers, because UCP-powered agentic commerce may provide a fresh traffic source that is more intent-driven than traditional ads. At the same time, Etsy will sit alongside large retailers like Walmart, Target and Shopify merchants inside the same protocol, so the quality of ranking, recommendation logic and ad load inside AI Mode will influence how much value it actually sees.

• The UCP launch directly ties into the narrative that AI-powered search and recommendations can support renewed marketplace demand by placing Etsy’s unique inventory inside conversational shopping journeys.

• Heavier integration with Google could challenge the narrative if it raises customer-acquisition costs further or fails to improve buyer engagement, given existing concerns about rising marketing spend and softer GMS trends.

• The role Etsy has played as a co-developer of UCP, and the competitive exposure to Amazon, Temu and Shein outside this ecosystem, is not fully reflected in the narrative’s discussion of future traffic sources.

Knowing what a company is worth starts with understanding its story. Check out one of the top narratives in the Simply Wall St Community for Etsy to help decide what it’s worth to you.

• ⚠️ UCP places Etsy alongside larger retailers in the same AI shopping flow, so weaker placement or paid ad competition could limit traffic gains and pressure marketing efficiency.

• ⚠️ Analysts have flagged several risks for Etsy, including weaker recent GMS trends, falling active buyers and higher marketing intensity, which could weigh on profitability if new channels do not convert effectively.

• 🎁 Early participation and co-development of Google’s agentic commerce standard gives Etsy a seat at the table as AI-driven shopping formats evolve, rather than having to adapt from the outside.

• 🎁 Risk and reward analysis points to both flagged risks and identified potential rewards for Etsy, so this kind of partnership may be one of the levers that supports the positive side of that equation if it attracts incremental, high-intent buyers.

From here, you might focus on how visible Etsy listings are within Gemini and AI Mode searches compared with large mass-market peers, and whether management starts to reference UCP-driven traffic or conversion in future updates. Any commentary on marketing efficiency, especially given Etsy-funded coupons and past fee increases tied to higher ad spend, will help you judge whether this partnership is supplementing or simply reshuffling demand. It is also worth tracking how quickly Google onboards additional retailers, since that will shape competitive intensity inside the protocol over time.

To ensure you’re always in the loop on how the latest news impacts the investment narrative for Etsy, head to the community page for Etsy to never miss an update on the top community narratives.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ETSY.

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