HRA Group is a Canadian diamantaire producing loose stones and diamond jewellery, and operating around the world for the last four decades.
It boasts offices and factories in places as diverse as Vancouver, Seattle, Hong Kong, Shanghai, Ontario, London, and Vietnam.
Its website states: “We are not another diamond manufacturing company. Our focus is on the creation of ideas, products, brands and collaborations.”
The group believes “that a diamond company cannot rely solely on its manufacturing abilities to meet the demands of the consumer, but must remain ahead with new cuts, new strategies and new brand concepts to bring diamonds to the market”.
In 2007 it founded Crossworks Manufacturing, a subsidiary to explore the beneficiation opportunities of Canadian diamonds.
Now, though, HRA Group has shaken up the market with the introduction of Dialog.
Co-founder Itay Ariel describes it as “the world’s first diamond subscription service for diamond retailers to merchandise their loose diamond inventory”.
Dialog was created in order to address a number of problems faced by jewellers, problems that have come to a head in recent years.
“Our company has been in the diamond industry for 40 years,” says Ariel, “and recently we had been witnessing the emergence of economic headwinds facing retailers.
“Firstly, the erosion of margins. This resulted in vendors and retailers grinding each other for every dollar. Secondly, the reliance on ‘call stones’ to service the diamond requests of the retailer’s clientele.”
“having the diamond in the store at the exact time the customer walks in the door is far superior to asking them to return the next day”
The term ‘call stones’ refers to the traditional method of selling diamonds – ordering them in for your client, resulting in a waiting period that can at best inconvenience the customer and at worst send them to one of your competitors.
Ariel goes on: “We all know that having the diamond in the store at the exact time the customer walks in the door is far superior to asking them to return the next day or week.
Retailers risk losing that sale as the desire to make the purchase can fade when product isn’t readily available. Dialog was founded to address these pressure points.
“We set out to develop a new model,” explains Ariel, “where vendors and retailers have the same objectives and where both parties are financially motivated by the same outcome.”
This resulted in the introduction of Dialog which entered a lengthy beta period a few years ago, open only to a select group of retailers for testing.
It became available to all with its full launch in November 2020. “It has seen tremendous demand,” says Ariel. “In the first two quarters of 2021 Dialog has grown its active subscription base by over 300%.”
So how does it work exactly? Ariel runs Professional Jeweller through the process.
He says: “As a jewellery retailer, you curate your perfect merchandise selection from the Dialog platform. Diamonds selected are then shipped to your store the very next day and can remain there indefinitely.
“The diamonds are always in the retailer’s store or showcase. The only cost is a monthly subscription fee. All of this is automated and easy to use.”
Both small independents and the larger multiple jewellers can benefit from Dialog’s platform, and prices vary to reflect that.
“Our subscriptions are between $50,000 and $4M per retailer,” he adds, and is also quick to emphasise that Dialog is “not an aggregator of third-party diamonds or a platform to communicate or negotiate with diamond vendors”, but “a subscription service for retailers to choose any diamond inventory they want and merchandise it on-hand in their stores”.
He confirms: “Dialog owns all of its inventory and makes it available for its retail subscription base.”
Shaking up the industry
This radically different alternative to traditional diamond and gemstone sourcing is already proving popular with retailers for a number of reasons.
They feel it simplifies their inventory, allowing them to focus instead on growing their business and dedicating more time to connecting with customers.
Ariel explains to PJ: “By transferring the inventory cost and risk to Dialog, retailers can choose to deploy their funds toward higher yielding initiatives and unlock capital for other opportunities.
“Aged inventory is an eliminated concern for their business. Retailers have the opportunity to curate the perfect assortment of inventory for their business based on what their customers want to buy and not what their vendors want to sell.”
There is one more point that Ariel is especially keen to highlight.
“The retailer does not pay for the diamond unless it sells,” he says. “If an item is not turning, they can exchange it for another – like a library for diamonds.
“Their return on investment and available cash increases and aged inventory is no longer a negative pressure on their balance sheet, all the while having the perfect diamond inventory in their store for their clients.”
“We set out to develop a new model where vendors and retailers have the same objectives and where both parties are financially motivated by the same outcome”
Dialog also prides itself on its trustworthy reputation, cultivated through focus on areas of the business such as best practice, expertise, quality control, inventory selection and efficiency, all of which retailers can rely on without leaving their store.
“As soon as they report the sale on the Dialog platform,” Ariel tells Professional Jeweller, “a similar diamond can be shipped to their store the very next day.”
This possibility for retailers to have stones ready in stock is key to Dialog’s operation and success.
Ariel adds: “Relying on call stones results in the retailer being a price taker and beholden to the limited availability at the time.
“Taking the time to curate a perfect inventory based on what sells will provide the best results for the retailer. And when the retailer wins, Dialog wins.”
The business model is solid, then, but does Dialog have the stones to back it up? Are its diamonds up to scratch? Ariel believes so, and is confident that retailers will agree.
The company offers certified diamonds with GIA, AGS and Forevermark certificates, he explains.
“Because we own all our diamonds, we ensure that they meet the highest standards in quality. Retailers receive exactly the product they are expecting. Notwithstanding, we encourage exchanges until we find the perfect balance of inventory for the Dialog customer.”
Furthermore, the business assures customers that its products are always from a reputable source and always traceable.
All certified and including photographs and V360 files online, the stones stand up to inspection.
Ariel says: “We are compliant with De Beers Best Practices Principles and global Forevermark diamantaire standards; our group is certified by the Responsible Jewellery Council (RJC) and KPMG-audited too.
“We ensure all of our customers and vendors also subscribe to the highest practices of our industry.”
The UK is just the latest of the markets in which Dialog has begun operations.
It is also available for retailers in Ireland, Australia and North America.
While the company will no doubt be looking to expand further in the near future, it has plenty on its hands right now with introduction into the UK market.
“We already work with a core group of independent retailers in the UK,” says Ariel. “This is a new, fresh approach. There is nothing else similar being offered.”
Not only is Dialog offering a unique service to jewellers, its founders believe it is launching at the perfect time in the UK market.
“After Covid and the economic down turn,” Ariel says, “we want to help UK retailers flourish. Retailers need a real selection of diamond inventory in their stores.
“With Dialog, they do not need to invest their capital in doing so. We have the right inventory at the right prices to help the retailers service their clients.
“This will enable each UK jeweller to mount product in store or keep a large amount of loose inventory without the large capital requirements traditionally required to do so.”
“After Covid and the economic down turn we want to help UK retailers flourish”
This, the team believes, could prove especially helpful as the dust settles after the financial difficulties of the pandemic.
Fortunately, the industry is realising the help that the Dialog platform could be to retailers, with its co-founder describing the “tremendous growth” witnessed since launch.
“We are getting new customers every day,” Ariel adds, “mostly through word of mouth. We love the UK market and the commitment to excellence of the UK retailers.
“Consumers are smart and retailers are sensible and knowledgeable. They know the product well and their markets even better.
“The quality of stock we can offer them will enable them to merchandise their stores and enjoy all of the benefits of Dialog. We know that Dialog will be a great fit in the UK market.”
Ariel finishes: “We only want retailers to use Dialog if it truly works for them. Because of this, we provide a risk-free trial for retailers to try it and see if it helps their business.
“These are important brand values that our team always comes back to – to be helpful, to be honest and to be reliable.”