Counterfeits: time for companies to come clean

The time has come for brand owners to fully acknowledge when their products are being counterfeited, and enlist the aid of consumers to tackle the problem.

Moreover, companies that invest in the technology to empower consumers will soon find their efforts are rewarded, according to Steve Ablett of OpSec Security.

"There are organisations that try to bury the issue, while others have come out into the open with it," he told delegates at the IP-Protect Expo in London recently.

Once the decision is taken to acknowledge the problem and invest in defences such as security labels, however, brand owners soon find they are able to get a return on that investment over and above brand protection.

A recent survey by PricewaterhouseCoopers (PwC) found that more than 40 per cent of people had purchased counterfeit clothing and accessories while around three quarters said they had purchased the item from a retail outlet rather than online.

"If we are going to educate and inform consumers we need to find some way to engage with them and help them to identify whether a product is counterfeit or not," said Ablett.

Many companies view security labels as simply a cost but - if they tap into the marketing potential of these technologies - it becomes easy to show a good return on that investment.

Holograms and other security labels are already a potent weapon against counterfeiting but, particularly when used alongside barcodes and other unique identifiers, can also be exploited to provide a fantastic amount of information on a company's supply chain.

Companies can also communicate directly with and incentivise customers, for example by entering those who register products into an online draw or by offering free downloads, a bonus which the purchaser of a counterfeit will not get.

A 2D barcode linked to a holographic label, for example, not only gives the consumer the opportunity to validate the authenticity of a product, but also encourages them to register with the brand owner and provide information that can be used as a marketing and promotional tool.

"Some clients choose not to tell consumers that their product is counterfeit," said Ablett, remarking that in certain cases - including a well-known football club - the organisation simply wants to gather as many names as possible for their customer database.

Meanwhile, identifying the IP address of the person scanning an item also provides potentially valuable geolocation data, so brand owners can see which products - and fakes - are selling in particular markets.

Of course, the digital connection forged with the consumer can be used to deliver messages back to them - such as providing some information on the provenance of a purchase or providing additional guidance on spotting counterfeits.

One of OpSec's clients - a high-end apparel manufacturer - was suffering serious brand damage as a result of counterfeiting with a high volume of fakes being 'returned' to the manufacturer because of quality defects.

Adding a label that allowed consumers to authenticate the garments not only helped restore confidence in the brand, but actually boosted sales to the tune of 10 per cent within 12 months, according to Ablett.

That sort of return -along with consumer response rates that outstrip coupon campaigns and even targeted email - makes it feasible to ask the marketing team in a company to share part of the budget for a security label implementation, he added.

"From a marketing point of view the possibilities are almost endless."