Mass serialization 'failing' in consumer products sector

For all intents and purposes, mass serialization should be having a positive impact in the consumer products sector, but the uptake of the anti-counterfeiting technology has been muted, a new paper suggests.

Despite mass serialization being widely adopted in the pharmaceutical industry, specialist coding firm Systech has found there are five main reasons why the unique 2D barcode is receiving a lukewarm response in consumer products.

The report, Serialization Reality Check: where are all the numbers?, says mass serialization has failed to make inroads to drive brand protection and customer engagement because consumer companies have concerns over the implementation, adoption, ownership, security and value of the technology.

The most common concern expressed by brand owners is the impact it would have on packaging. "The real estate on brand packages is one of the highest valued properties, accounting for nearly every square millimetre down to perfection in terms of content and creativity," says the author, Systech senior global partner Avi Chaudhuri.

"To throw in an extra barcode not only disrupts the look of the package but also creates concern about the consumer's ability to find and interact with the barcode."

Consumer company executives and industry professionals have told Systech that changing the package artwork to incorporate an extra unique barcode is a nightmare and the barcode may not even standout, which would require additional marketing effort to engage consumers, while mass serialization is associated with extra production costs and reduced production efficiency.

There is also the concern that consumers are not willing to engage with or adopt serialisation barcodes, with the report claiming that QR codes are already ubiquitous and are experiencing consumer fatigue. Furthermore, marketing efforts to educate consumers are seen as costly, also leading to the lack of mass serialization implementation.

Executives mentioned there are questions around who will own or run the loyalty and consumer engagement programmes. Here there are issues with serialization vendor services and the associated mobile apps, as well as concerns around what would happen if a vendor went bust.

Security concerns also play a large part in the lack of mass serialization in the consumer market – notably that serialisation barcodes can be cloned and that they can direct consumers to fake websites. "The substantial investments necessary toward deploying a mass serialization programme only to have it undercut by a rather simple act of code replication on the part of a counterfeiter represents an unacceptable risk," the white paper says.

Finally, there is the issue of value. According to Systech "the value proposition in an endeavour is directly related to the expected benefit and inversely related to the cost of the exercise…. both parameters fail to reach an acceptability threshold in the minds of corporate stakeholders when it comes to mass serialization."

Furthermore, the report adds: "The pain being experienced by the pharmaceutical industry [where regulatory requirements for serialization are being introduced] is very telling and does not bode well for a voluntary embrace of the same effort in the consumer product sector where there is no similar regulatory drive."

Systech concludes that the lacklustre approach to mass serialization in consumer products actually created an opportunity for new anti-counterfeiting technologies in this space.

"What is needed is to provide a full solution that is secure, protects products and is enabled for consumer engagement," says Chaudhuri.