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Physical Authentication: The Crucial Piece of the Online Brand Protection Puzzle

The last twelve months have seen a dramatic increase in consumer reliance on online shopping, which whilst opening up new opportunities to retailers, has also brought fresh challenges. In particular, the surge in online sales has made the billion-dollar issue of counterfeiting even worse by creating more opportunities for bad actors to exploit brands and consumers. 

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Tackling the issue of counterfeits requires a layered approach, encompassing both online brand protection and on-product authentication. Simply identifying and removing bad actors and fakes from online channels is not enough without also removing the issue at the source, as the ease of access to reseller sites or tools which allow for the setting up of e-commerce sites makes keeping pace with bad actors posing as legitimate online merchants a challenge. Reflecting the scale of the issue, just last month Amazon announced it had blocked more than 10 billion suspected bad listings before they were published on the site last year, and separate research carried out by OpSec in 2020 found 28% of consumers have unintentionally bought a product online that turned out to be fake.

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Integrating on-Product Authentication With Online Brand Protection

It’s clear that stemming the flow of bad actors touting counterfeit goods online continues to be a pressing challenge for brands. With this in mind, organizations must take a step back to view the product journey holistically, ensuring that are able to trave vulnerabilities throughout the chain.

With this in mind, true end-to-end brand protection should include the authentication of the physical products. This allows brands to track and identify each individual unit across every stage of the supply chain, from the factory floor to the customer’s hands.

It’s a common misconception that on-product brand protection is separate to – or only the beginning part of – the chain when it comes to the brand protection ecosystem. 

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The truth is physical authentication is the often overlooked piece of the online brand protection puzzle. With authentication measures in place, consumers can feel empowered to do their own due diligence when purchasing products online, and also how to be sure that the product they receive is exactly what they wanted it to be. To this end, brand protection should employ a variety of online and physical methodologies that work in tandem to mitigate every risk, not just the risks posed online. 

The Importance of On-Product Authentication

There are various on-product authentication solutions that can help safeguard brands in both the online and physical worlds. These include human-readable numbers, data matrix barcodes or NFC scans, hangtags, and hologram tagging. These are tagged with metadata that joins up the online and on-product brand protection channels, adding an additional level of security, which can, for example, help enforcement and customs officers verify the authenticity of the products as they pass through the supply chain. 

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The systems that bring online and on-product authentication together can be implemented by the brand protection partner at each site, whether that’s hand applying pressure-sensitive labels on small volumes of products or setting up high-speed automation in facilities that process millions of product units each year. Another option could be that a brand protection partner can print and ship on-product authentication directly to the manufacturing or processing facility, ensuring no foul play takes place during the printing process. 

Each brand will have its own desired outcome from brand protection activities. One brand’s biggest issue might be enabling consumers to better spot counterfeit products when they encounter them online, whilst for others, the focus might be on putting a stop to grey market diversion of its products. However the value of understanding the particular threat landscape within your industry cannot be underestimated, and so it pays to spend time tracking the data to assess the developing trends that come to the fore. 

The Combined Value of Online and on-Product Authentication

By bringing together data from an online system and an on-product system, brands get greater visibility of where products are being diverted. Brands can view the metadata associated with each individual product unit through a fully personalized dashboard configured to the specific brand protection issues they want to solve. This allows them to view yellow flag and red flag data in real-time.

To ensure maximum visibility across the chain, it’s useful if the online system can be accessed by relevant external parties including tax officials and police forces working on counterfeiting cases, with brands able to apply user rights to each external user based on their own unique sets of credentials. 

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When used in tandem, online and on-product authentication solutions can expose merchants and marketplaces that should not be selling the product. Their online product listings will often display the on-product authentication to prove their legitimacy and this gives brands visibility of genuine products being available where they should not be being sold. With detailed information visible from the on-product authentication, brands can also identify the point at which products leaked from their supply chain. 

This is also a crucial component of successful licensing, delivering the much-needed visibility throughout the chain to ensure that a brand’s IP is not being misused by those licensing its trademarks. This can uncover any instances of grey market sales, whilst on product authentication can also reassure consumers that they are purchasing genuine merchandise – an important factor to consider for coveted items that may become collectible. 

The Future of Brand Protection

Combining online and on-product brand protection adds a level of accountability at every stage of the supply chain. The partners in the supply chain that don’t want to become part of the brand protection program are more than likely the weak link in the supply chain. The weak links that are willing to play ball will be taking on the accountability and the onus will be on them to lock down their facilities and fix any issues when they are exposed after the program is implemented. 

As the online shopping boom continues, the threat landscape will continue to grow. This means full end-to-end brand protection has never been more crucial. A brand protection program that combines online and on-product authentication will give any brand the strongest opportunity to safeguard revenues and reputations. 

[To share your insights with us, please write to sghosh@martechseries.com]

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