AI at the Crossroads: How Carat Lane is Redefining Customer Experience in the Jewellery Industry

Join Avnish Anand, former Co-founder & CEO at CaratLane, in an engaging conversation with Research NXT as he reveals the role of AI and technology in revolutionising the jewellery industry. Through this discussion, Avnish shares how CaratLane harnessed data-driven personalisation and cutting-edge innovations to elevate customer experiences and streamline operations. From overcoming challenges in AI adoption to exploring its strategic implications, this interview offers a fascinating look at the practical applications of AI in reshaping the future of jewellery retail.

Key Highlights from the Interview

  • AI as a Strategic Tool for Personalisation: AI has significantly enhanced imaging capabilities, personalised marketing, and customer interaction monitoring at CaratLane. It enables real-time identification of potential issues and creates tailored experiences for customers, reducing dependency on manual interventions.
  • 360-Degree Customer View and AI Utilisation: While a comprehensive customer view can be achieved without AI, the technology’s true value lies in processing and leveraging this data at scale to generate actionable insights and improve decision-making.
  • AI’s Role in Streamlining Processes: From automating repetitive tasks like creative resizing to simplifying complex marketing strategies, AI has become an indispensable tool for driving efficiency and scalability.
  • Challenges in AI Implementation: The risk of over-reliance on AI and the potential for data misinterpretation emphasise the need for continuous human oversight. Regular validation and a balanced approach are critical to avoid significant missteps.
  • Current AI Inflection Point: The rapid advancements in AI capabilities over the past year have unlocked new possibilities, marking this phase as a transformative moment for businesses.

“Businesses must first define their priorities and identify the problems they aim to solve. Only then should they explore how AI can contribute to achieving those goals.”

Could you share a brief overview of your journey as a leader in the industry, focusing on how you’ve leveraged technology across various initiatives you’ve worked on? How have technology and AI evolved in your journey, and how are you integrating them into your current efforts?

Avnish: My journey with technology began in 2007 with CaratLane, where we built everything from scratch, as platforms like Shopify or Magento didn’t exist back then. Being in the jewellery industry, we faced unique challenges since most solutions were tailored for categories like fashion or electronics, not jewellery. This forced us to innovate and create tools specific to our needs.

Although I wasn’t formally trained in technology, my CaratLane experience introduced me to the power of data, marketing, and technology. Over the years, as ecosystems matured, tools for consumer analytics, marketing, and product management have significantly improved. However, in India, many businesses still struggle to maximise these tools’ potential. While companies invest in analytics teams and tools, a deep understanding of their effective usage is often lacking.

One key learning for me has been the importance of tracking critical metrics manually, even when they aren’t readily available in dashboards. Making that extra effort can offer a competitive advantage, especially in a landscape where most rely solely on automated insights.

AI is revolutionising long-discussed concepts like personalisation. Until now, high-quality creatives and messaging have been expensive and resource-intensive to execute at scale. AI is beginning to solve these challenges by enabling more accessible and dynamic personalisation. Although its adoption is still in the early stages, I’m optimistic that AI will transform how businesses deliver tailored experiences to consumers.

At CaratLane, we experimented with such advancements, but there’s still a long way to go. As AI tools evolve, I believe we’ll see widespread adoption of personalised messaging, notifications, and campaigns.

The pandemic accelerated digital adoption and payment systems, but businesses are now realising the continued importance of a strong offline presence. However, digital remains a game-changer, particularly for its ability to target multiple customer segments simultaneously. Traditional campaigns are limited to one-size-fits-all messaging, whereas digital campaigns can run multiple targeted initiatives at once.

Despite this advantage, executing such digital strategies effectively remains challenging, which is where AI and advanced technology come into play. Businesses that leverage digital capabilities alongside offline strengths are best positioned to succeed.

My experience at CaratLane underscored the importance of relying on first principles when expertise is scarce. It taught me the value of integrating technology, data, and digital capabilities into a business, irrespective of whether it operates online, offline, or in a hybrid model. These elements are essential for building a sustainable competitive advantage.

As someone with experience in building and scaling businesses, what role does AI play in fostering innovation and driving growth for startups and established companies?

Avnish: AI, when used effectively, brings transformative changes across various functions. For instance, tasks like creating and repurposing creatives in multiple resolutions and formats, which previously required significant manual effort, can now be streamlined with AI. This eliminates repetitive, non-value-adding tasks, allowing teams to focus on more impactful work.

Additionally, many companies struggle to make sense of the vast amounts of data they collect, often getting lost in its complexity. AI addresses this challenge by extracting actionable intelligence, enabling smarter decision-making. In personalisation, one significant barrier has been the need to create multiple versions of creatives, communications, and content—a labour-intensive process that becomes even more complex with A/B testing. AI simplifies this, making it easier to generate and test variations at scale.

Overall, AI excels in automating manual tasks, enhancing intelligence, and enabling more efficient personalisation. While some advanced applications like AR and VR may not yet be widespread in my category, the impact of AI in driving scalability, efficiency, and more intelligent decision-making is already evident.

In your experience, what factors are critical for ensuring AI adoption aligns with your organisation’s long-term strategic goals?

Avnish: Organisations often face internal conflicts when it comes to adopting AI, as different stakeholders have varying agendas. Some may push for AI adoption simply to enhance their resumes or showcase technological acumen, particularly in tech or product functions. Others may feel threatened by AI, worrying it could replace their jobs. Then, there are those who advocate for AI only if it addresses specific business needs or demonstrates a clear ROI.

The key to successful AI implementation lies in internal alignment and ensuring that AI initiatives are driven by business or consumer priorities—not the other way around. AI should not be adopted merely for its novelty or potential. Instead, businesses must first define their priorities and identify the problems they aim to solve. Only then should they explore how AI can contribute to achieving those goals.

This requires organisational clarity on the specific challenges AI will address, the approach to implementation, and the investments needed. By aligning AI efforts with strategic priorities and maintaining a problem-first approach, organisations can ensure that AI adoption is sustainable, impactful, and beneficial for the business in the long term.

In our earlier conversation, you mentioned working on certain AI-driven personalisation use cases at Carat Lane aimed at enhancing customer experience. Where do those personalisation efforts currently stand, and how do you see AI shaping the future of customer experience in this context?

Avnish: We’ve been working on several AI-driven initiatives, some of which have shown progress, while others remain a work in progress. In the jewellery industry, as with any visually driven category, the presentation of products is critical. AI can significantly enhance imaging capabilities by providing the right perspectives, showcasing designs, and suggesting styling options. While we’ve made advancements in this area, there’s still a lot to refine and develop further.

Another focus area is marketing and customer experience. AI helps us gather intelligence from data, create personalised communication, and improve overall customer interactions. For instance, we’re using AI to proactively identify issues in the customer journey, whether on the website, during chats or calls, or in-store. Typically, customer experience is measured through NPS, which is collected at the end of a purchase. However, jewellery purchases often span several weeks, and issues during this journey might go unnoticed unless the customer complains.

With AI, we’re able to monitor and flag potential problems in real time, enabling immediate intervention by the team. This ensures issues are addressed promptly, enhancing the overall customer experience without waiting for feedback or complaints. It’s like having an AI-powered system observing and ensuring everything is running smoothly, but on a scale that human monitoring could never achieve.

In marketing, segmentation and personalisation have been key focus areas. We aim to create messaging, creatives, and product suggestions tailored to different customer segments. While progress has been made, there’s still a massive opportunity to refine this further so that every customer, whether new or returning, feels their engagement with Carat Lane is uniquely personalised.

This personalisation, powered by AI, holds tremendous potential for both acquiring new customers and retaining existing ones. Especially in an era where marketing costs on platforms like Google and Meta are soaring, AI offers a scalable and efficient way to enhance customer relationships and drive business growth.

From your perspective, what are the biggest challenges businesses face in leveraging data for AI-driven decision-making? What are the biggest challenges businesses face in responsibly utilising data through AI? 

Avnish: AI is a powerful tool, but it’s important to recognise its limitations. People shouldn’t expect AI to define and solve problems on its own. It’s not a magic wand. The heavy lifting—defining problems, identifying use cases, and determining what you want AI to achieve—still requires significant human involvement. AI can assist as a servant, but it cannot replace the strategic and contextual understanding that humans bring to the table.

Even in areas like personalisation, journey analysis, and segmentation, while AI can provide valuable insights, the quality of the outcomes depends heavily on the expertise and thoughtfulness of the people using it. AI is only as effective as the people guiding it.

Privacy is another critical consideration. AI can process and track vast amounts of data in ways previously impossible, which requires organisations to be highly vigilant and ethical in how they manage and utilise this data.

Finally, a significant moral challenge with AI is its potential to make certain jobs redundant. For individuals who haven’t had the opportunity to learn more advanced skills, this can be a real threat. As leaders, it’s crucial to prioritise upskilling and reskilling efforts, ensuring that the workforce evolves alongside technology. AI should be an enabler, not a replacement, and it’s our responsibility to ensure that its adoption creates opportunities rather than displacing people.

Reflecting on your experience, what are some of the common challenges organisations typically face during their AI implementation journey? What guardrails would you recommend to ensure a smooth and effective implementation process?

Avnish: AI, while highly intelligent and capable, still lacks certain human nuances and contextual understanding. This gap can sometimes lead to significant issues, especially when data is misinterpreted. For example, AI could misread customer data, leading to incorrect insights or actions. Since AI operates at scale, a single error could potentially impact millions of customers, magnifying the consequences.

Over-reliance on AI without human oversight is a common pitfall. It’s crucial for human teams to consistently monitor and validate AI outputs to ensure accuracy. This ‘eye test’—cross-checking AI’s conclusions with human judgment—remains indispensable. AI excels in the science of problem-solving, but the art of understanding customers and interpreting nuanced situations still requires human involvement.

Take customer service chatbots, for instance. If AI misinterprets a query, it can result in a frustrating experience for the customer. Similarly, in marketing, a misstep in an AI-driven campaign could lead to widespread repercussions for the brand. These scenarios underline the importance of maintaining a balanced approach, combining AI’s capabilities with human oversight.

While AI can handle complex problems at scale and offers tremendous value, businesses must recognise its limitations. Regular validation and an understanding of both the potential and risks of AI are essential to ensuring its responsible and effective use.

Since a 360-degree view of the customer is often cited as a top priority in marketing tech, have you been able to achieve this at Carat Lane? Or do you think it’s a myth, even with advancements in AI and new-age technology?

Avnish: Achieving a 360-degree view of the customer doesn’t necessarily require AI—it’s more about collecting raw data, which existing technologies can manage effectively. Where AI becomes indispensable is in leveraging this comprehensive view.

At Carat Lane, for example, a typical customer takes three weeks to make a purchase, involving numerous interactions and transactions. Managing this for lakhs of customers is impossible manually, and that’s where AI plays a critical role. AI processes and analyses this vast data, enabling intelligent interventions and generating actionable insights.

Without using AI to interpret and act on the 360-degree view, simply having the data serves little purpose. AI transforms this data into meaningful insights, empowering businesses to make better decisions and enhance customer experiences.

Do you see the current phase as an inflection point for AI, where the convergence of advanced data collection and AI capabilities is unlocking real, impactful use cases? Is this the moment where AI moves from concept to reality, enabling us to utilise 360-degree data effectively and solve problems beyond human capacity?

Avnish: I believe we are indeed at a significant inflection point for AI. Over the past year, AI capabilities have advanced dramatically, opening up new possibilities for meaningful impact on both customers and businesses. As more companies adopt AI, the technology will continue to evolve, driving the emergence of new use cases and greater sophistication.

This is a pivotal moment in terms of how AI will transform consumer experiences and business operations. While the change is already underway, it may take another year or two before we see the full extent of its major impact.