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Protecting Brands From Counterfeit Through Transparency

Paul Woodward
Senior Director, Retail Supply Chain Business

We know that consumers continue to rank trust very highly when it comes to important qualities in a brand. They want to trust that a retailer is providing an authentic quality product and that they are transparent in terms of the sourcing, manufacturing and labeling of that item.

In Oracle Retail’s consumer Retail 4D survey report, it’s clear that consumers find product transparency important.

In the Specialty and Fashion Retail Category - 60% of consumers find openness about product details, including where materials are sourced important, being most important to those with families (64%).

In the Grocery/Pharmacy/Discount Retail Category - 65% of consumers find openness about product details, including where materials are sourced important, being most important to females (67%) and those with families (68%).

Due to criminal and deceptive practices regarding products in the supply chain, retailers need the ability to verify the authenticity of its products to ensure what they are selling isn’t counterfeit and therefore harming their brand reputation. Not only have ebusiness brands been making headlines regarding counterfeit product sales, but recently L.A. has been under scrutiny in both fashion and cosmetic retail.

Counterfeit Goods in the News

Recently, reports of knock-off Gucci and Channel items have been reported being sold at a popular Fairfax district retail shop called Old School and the Kardashian’s have been speaking out about fake beauty products on the market, including $700,000 worth of Kylie Jenner’s cosmetic line that was counterfeit and contained harmful bacterial contamination. In this cosmetic case, fifteen vendors were served cease and desist orders, and six people were arrested. The only way to know you are buying the authentic product is when you buy from the Kardashian’s websites.

So that case may seem simple for a consumer to avoid being deceived, but what about recent reports of Urban Decay’s brand being victimized? Their brand is not only sold on their ebusiness site, but in retail stores all over the nation. Brands like Urban Decay do have brand protection programs in place to ensure products are only sold through authorized channels, yet their popular items are targets of counterfeiting. Experts advise brands to make packaging less generic, so it’s harder for counterfeiters to replicate its look.

What may seem interesting though to consumers is due to the Digital Millennium Copyright Act, third-party ebusiness sites aren’t responsible for monitoring what’s being sold on their site, so that leaves the brands responsible for hunting down counterfeit items that violate trademarks and muddy their name. And although many brand names have specialists responsible for finding and removing counterfeit items from the marketplace, not all fakes can be caught.

It may be obvious to some that when you are finding a new name brand item on a third-party site for significantly less than you can find it in the store, that it just may be counterfeit. I’ve even made the mistake of ordering a pair of Ray Ban’s listed on a nicely branded third-party site, to only find out once it was delivered that they were in fact fake and shipped from Asia. Even in Oracle Retail’s consumer survey report, 84% say that competitive pricing and promotions, first and foremost, is the most important aspect of their shopping experience.

When price is driving such a high number of sales, how can consumers be confident in both paying the best price and getting the real deal? This really means retailers need to step up and protect their brands now more than ever.

Four Tips to Protect Your Brand Integrity

  1. Centralize Product Data on a Single System
  2. Standardize Supplier On-boarding Processes to Include Product Data Collection
  3. Leverage the Cloud to Foster Transparency and Communication
  4. Create and Regularly Test Action Plans for Queries, Recalls and Other Potential Crises

The Oracle Retail Brand Compliance solution provides retailers granular traceability and high levels of accountability to deal with crisis situations, such as product recalls or supply chain disruptions. It also provides the means to effectively communicate out to greater supply chains when problems arise. Having a brand compliance solution in place provides retailers with a framework to not only confidently see which ingredients or materials are being used for full transparency, but the ability to handle a full-scale product recall. Brand compliance ensures that the entire path of an item to the marketplace is clean. When retailers are able to track each piece of inventory in detail, they can then pass trust and confidence onto the consumer about their products, protecting the brand's integrity.


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Comments ( 1 )
  • Pankaj Vishwakarma Thursday, June 14, 2018
    Authorized channel also has many loophole. Counterfeiters will find a way through that also and to stop duplication of product one should use hologram and QR code which is impossible to replicate. Companies spend millions on marketing the product but when it comes to protecting the brand, only their distribution channel is being checked. If the product is protected at the start only by using hologram and QR code, the amount of money spent on marketing will decrease and the sales will increase automatically.
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