Diamonds are difficult, but purchasing them shouldn’t be.
Actually, are diamonds a woman’s best friend? Diamonds are viewed as a symbol of love and ‘forever’ in culture, in large part because of brilliant marketing strategies (and the industry-controlling monopoly De Beers exercised for more than a century that raised ethical questions).
Ajay Anand founded “Rare Carat,” often known as the “Kayak of Diamonds,” in response to the strain of buying a diamond without being ripped off (or buying from unethical sources) and a lack of openness in the supply chain and industry.
He was dissatisfied with the approach he used to buy the engagement ring for his fiancée, so he set out to develop a fair marketplace for diamond buyers that would be supported by blockchain, virtual reality, artificial intelligence, and data science.
Before making a purchase, the typical buyer who is seeking the ideal ring to pop “The Question” conducts a substantial amount of research. This may rank just behind their first home or automobile as one of their most costly purchases.
Additionally, a variety of elements, including color, carat, cut, clarity, and fluorescence, can affect a diamond’s price on the market. Since gemologists are frequently motivated to sell particular stones based on commissions or other sales incentives, the market is full of knowledge asymmetry. The actual client is not considered in any of this.
How it works
The online store Rare Carat does not stock or advertise any of its own diamonds. Users enter various parameters (such as price, shape, and carat) on the site, and the platform populates the results with a number of relevant listings for comparison with total pricing transparency and ratings from unbiased gemologists. The user interface is similar to that of Kayak or Expedia, except instead of finding hotels and flights, consumers are looking for diamonds. Through free online information, the website also attempts to inform visitors about the diamond purchase process.
In addition, Rare Carat unveiled Rocky, the first diamond “chatbot” (powered by IBM’s Watson services), to assist customers in their search and buy decisions in a manner akin to that of a physical shop, but with 100 percent impartial transparency.
Rocky assesses diamonds based on their carat, cut, color, clarity, polish, and depth and provides consumers with buying advice akin to that of a true gemologist. Rocky’s sole motivation is to offer clients the greatest rate depending on the criteria they provide.
According to Anand, “Rare Carat’s technology draws on the vast amount of data it has accumulated over the previous four months, including 10 million data points on diamond pricing and characteristics, more than 2 million user queries, and more than 100,000 messages the firm has exchanged with users. Rocky also keeps getting better because of machine learning. Every day, a gemologist assesses the bot’s work and feeds the feedback into IBM’s Watson services, improving Rocky’s ability to identify the greatest offers for consumers.
Rare Carat doesn’t stock or sell any of its own diamonds because one of its top concerns was to maintain its objectivity. The platform functions only as a marketplace, bringing together providers and customers through open information exchange. None of Rare Carat’s revenue comes from commissions; all of it comes from advertising.
Rare Carat does not want to cater to the more affluent consumer base that prefers to shop at stores like Tiffany’s and Cartier for premium jewels. Instead, they want to support the bigger average millennial demographic who are merely seeking to get a good deal and are familiar with internet shopping.
Value Creation & Value Capture Strategy
By offering information and pricing transparency, as well as guidance from human gemologists and a step-by-step purchasing process facilitated by Rocky the chatbot, Rare Carat aims to provide value for diamond buyers. Rare Carat is democratizing the purchasing of diamonds via the use of artificial intelligence, machine learning, data analytics, and virtual reality. Previously, much of this process was veiled in mystery and smoke.
The goal of Rare Carat is to simply assist the typical millennial internet buyer in making one of the most significant purchases of their lives. Their value capture technique is entirely ad-based, with no compensation paid for sending customers to certain businesses, in order to maintain objectivity.
Opportunities and Challenges
Although they have a laudable aim and a good value capture approach, being an ad-based company has several drawbacks. For one, it will be challenging to increase platform income outside the paid promotion. Rare Carat is pursuing a variety of options, including:
- Blockchain technology will provide openness in an industry that is frequently immoral by enabling buyers to understand the mining and processing supply chain from which each gem comes. This technology is the result of a collaboration with Everledger.
- Virtual reality is a new technology that Rare Carat plans to introduce to its platform. This would make it possible for ring buyers to simulate the process of trying on jewelry and comprehend how it would seem to them after a purchase.
- Rocky, their chatbot, will soon have more Watson services, such as Watson Vision, which can interpret reports on diamond quality.
Ajay Anand, CEO of Rare Carat, remarked that chatbots may be very beneficial in the correct business and use case. “We’ve discovered that diamonds are a particularly good fit for the media, especially given the highly organized decision-making that follows the well-known four Cs of diamonds: carat, cut, color, and clarity. Rocky has demonstrated his expertise in the diamond purchasing decision-making process by assisting our beta testers in making the right choices.