The Dark Side of the Online Shopping Explosion

The face of shopping has changed. No longer are we heading to malls, or even main street to look for electronics, toys, books, personal goods or even food, but instead simply opening a browser. According to studies, shoppers now make 51% of their purchases online, and the reasons for this are varied. We are using our mobile devices for everything now, including shopping. Our confidence in online security is going up, and e-marketing is getting smarter and more targeted.

These same drivers have created a hotbed of opportunity for piracy, diversion and counterfeiters. According to a recent study reported by CBS news, online marketplaces like Amazon, Walmart and others are all falling victim to fraudulence. In the report, almost 50% of the items purchased in their test were fake. The purchases included Yeti mugs, phone charges and Nike sneakers. Their purchase of Urban Decay makeup reinforced other research that found cosmetics to be the most prevalent fake online purchase, when 100% of the makeup products proved to be phony.

Unfortunately, counterfeiters are smart, opportunistic and relentless. Online, the gray market is flourishing by taking advantage of the very behaviors that make online shopping successful. Online impulse buys are up 60% in the last year and that could be due to the fact we can shop just about anywhere we are. In fact, 44% of smartphone users made purchases through their devices.  And enrollment in 3-D Secure programs like Mastercard SecureCode and Verified by Visa are greatly increasing trust.

So, counterfeiters have a willing, trusting and active set of buyers to dupe. And for health and beauty product counterfeiters, there’s an even MORE enticing pool of buyers. E-marketers know that women make up the majority of online shoppers and they are targeting their proclivities. They will leverage their love of a coupon with email offers, use their trust and loyalty in a brand name to successfully advertise and interact, and the occasional desire for “Retail therapy” is often sated by targeted, branded sales and offers. The tactics used by legitimate sellers to leverage these characteristics make it far easier for a counterfeit product to be accepted, even sight unseen.

Each of these e-marketplaces cited in the CBS report are diligently working to protect their customers, and the brands themselves are all implementing anti-counterfeiting programs. In many cases, their customers safety is at stake and they are not taking it lightly.

But, reports of counterfeiting and the potential damage are getting more and more common. While brands and sellers are certainly trying—it’s just not enough. You can’t just keep adding layers of anti-counterfeiting protection in hopes that it will keep your brand and customer safe.

There needs to be a solution that works, is covert and can’t be duplicated or destroyed. It also needs to work with your existing packaging and the branding that is so loyally relied on by your customers. You can’t accept this as the cost of doing business or hope that retailers will stop it online. Systech’s UniSecure solutions lets you deploy true brand protection, at the individual item level without adding or changing a thing.

Get more insights on the counterfeit problem within the health and beauty industry in our latest infographic.