Virtually all brands—from the utmost recognized to the newly eager—face threats of product counterfeiting and gray market trading. In emerging countries, this menace is bold and audacious with outright fakes appearing in the open marketplace. In developed countries, the problem is equally insidious due to online sales of counterfeit products through e-commerce platforms.
The destructive effects of counterfeiting are self-evident, but there are two other key challenges that concern brand owners today. The need to keep pace with interactive packaging technologies for consumer engagement is certainly one. At the same time, rapidly expanding global supply chains make it difficult to know exactly where your products are and if they are being sold as intended.
The transformations now taking place in the emerging field of connected packaging have the potential to address these product challenges—protection, engagement, traceability—while delivering powerful supply chain insight.
A revolution in engagement-driven brand protection
How many brand owners are willing to ask their customers to check the product they are purchasing to ensure it is genuine? While no formal studies exist, it’s safe to surmise the answer is: very few, if any. Brand owners rarely disclose that their products are under attack.
One way to circumvent this obstacle is to incentivize consumers to interact with the product in return for something of value. There are numerous options to drive engagement:
- INFORMATION – product details, usage guidelines, lifestyle advice
- REWARDS – loyalty program incentives, cash back, sweepstake prizes
What do these sales augmentation tactics have to do with brand protection? Consider the left side of the figure below. As shown here, the engagement portal would only open after the product is verified as authentic. If not, a flag is raised, and the brand owner sends either a warning message or a request for more information.
This approach can dramatically increase the number of checks in the marketplace via a large consumer base without disclosing the nature of the protection program. Consumers are driven to interact with the program because they derive a personal benefit, while helping to fight counterfeiting.
What’s more, customer interaction gives the brand owner significant marketplace insight. There is a substantial amount of business intelligence data that can be mined and analyzed. The collective accumulation of this data would provide brand owners with actionable intelligence to identify counterfeit products in real time, weed out distribution vulnerabilities and modify defense strategies. All this while fostering brand loyalty.
The switch to digital
Traditional approaches to brand protection involved analog offerings where overt visual features such holograms watermarks and color shifting inks represented the mainstay of what was available. None of those solutions could offer the kind of consumer engagement options described here. Instead, the revolution in connected packaging is being driven by digital technologies.
Brand owners should consider these fundamental requirements for a successful program:
- the ability to engage with their customers to provide information or reward;
- executed through a packaging technology that cannot be cloned or reverse-engineered by counterfeiters;
- use the reward-information gateway as a means for brand protection;
- and do all this (if possible) without changing or adding anything to the package.
These requirements represent a very tall order. As it happens, your packaging is already connected and ready to do all the above. This functionality resides in your barcode.
But how? Each printed barcode contains a unique noise pattern that is not discernible to the human eye but can be detected by a smartphone camera. Known generically as fingerprinting, it is this unseen noise that is authenticated using a mobile app. And it is impossible to replicate—even if the package is perfectly copied. No two package barcodes will have the same noise pattern and therefore this feature serves to distinguish each individual package. A simple smartphone scan confirms authenticity and opens the engagement portal.
Interested in learning more about the promise of connected packaging? The blog author (Systech’s Chief Scientist, Dr. Avi Chaudhuri) provides a visionary assessment of what brand owners can achieve by converting to a digital connected packaging program in this Systech white paper.