A new meta search wants to bring greater transparency to online diamond buying
It’s an interesting quirk that the jewelry e-tail sector is almost as splintered as the jewelry retail sector. Blue Nile is obviously the biggest player, but other players do significant business, including Signet, Tiffany, James Allen, Brilliant Earth, Ritani, and—surprisingly—Costco and Overstock.
Making sense of this maze spurred Ajay Anand (pictured)—who previously founded Systmapp, an application used by the United Nations—to create Rare Carat, which proclaims itself the “Kayak for diamonds.” (Kayak is the travel meta search engine that compares prices on travel sites.)
Anand, a graduate of the University of Pennsylvania’s Wharton School, found himself frustrated when shopping for an engagement ring last year.
“I liken it to buying shampoo from Amazon,” he says. “You would never buy a shampoo from Amazon that doesn’t have reviews and has less than three stars. And that’s just a $10 item. But here you are, spending tens of thousands of dollars on an item and you are still in the dark about it.
“So I thought: Just give me a list of the reputable vendors in the industry and let me search them. Why should I have to do the searching? I was so shocked and even a little annoyed that no one had built something like this. Why is no one seeing this opportunity?”
The site uses an algorithm, powered by IBM’s Watson technology, that rates online diamond deals on a scale of one to five. That’s mostly based on price, but Anand has found that most e-tail diamond pricing is relatively close, and “brands matter, too” for consumers.
Anand admits the 10-person company currently has no real business model. Still, he’s encouraged by the initial response—fueled by an online article in Forbes—and he’s working on refinements to turn his site into more of a one-stop shop for diamond shoppers, such as a chat bot to guide consumers through the process.
Ultimately, he says his site is about bringing more transparency to the diamond market—which he feels it badly needs. He points to clothing manufacturer Everlane, the poster child for the growing movement for retail “radical transparency.” When the price of cashmere dropped, the company emailed consumers it was lowering prices.
“When buying diamonds, there is a huge information dissymmetry. I think that with diamond retailers, the intention is not to clear all that up but to stay this confusing product that you need someone to walk you through. The intent is to create margin, but I don’t think that’s a smart long-term play. It creates this unease.
“I don’t think there is anything wrong with the diamond industry. It just needs to be more open and honest. I don’t have a problem if someone else is making money, as long as there is a service you are providing. There are all these things I’m willing to pay for, but I have to get the sense that’s all I’m paying for. People need to think: If I go to Blue Nile, here is the markup. I don’t mind paying extra for higher service levels, but people have to feel they are getting a fair shake.”
(Photo courtesy of Rare Carat)