Consumer Products Blog
Genuine products, genuine benefits
By Duncan Smith - Last updated: Thursday, May 27, 2010
Single technology solutions
As counterfeiting becomes an increasingly widespread and serious problem, brands are considering implementing systems and strategies to protect their supply chains and ensure delivery of genuine products into the hands of their consumers. Can these investments deliver additional, genuine benefits to both the consumer and to the brand?
That was the question posed at the inaugural session of the Cambridge Network Consumer Products and Supply Special Interest Group (trips off the tongue, doesn’t it? We’ll call it Consumer SIG for short) held at the Hauser Forum yesterday evening. Three lively and diverse speakers presented their views on what turned out to be a thorny and interesting topic.
Ruth Thomson, representing Cambridge Consultants’ Consumer and Authentication Systems businesses, set the scene for the discussion. She described both the consumer trends and the trends in counterfeiting (her slides are here). A strong trend, highly relevant to authentication systems, is the increasing level and immediacy of communication and engagement between consumers and brands. This is becoming a two way conversation as brands create their own online communities where they can discuss and share with their consumers. Meanwhile, the counterfeiters are becoming increasing skilled, and are infiltrating legitimate supply chains and widening their scope to attack high-volume low-cost goods. Ruth challenged the audience to think about the implications of these trends for brands that are investing in anti-counterfeiting technology.
Franck Bourrieres, COO of Prooftag, who have a novel “Bubble Tag” technology at the centre of their authentication system, pointed out that brands are damaged by both consumers knowingly as those unwittingly buying fakes. He suggested that brands should focus on winning back the latter as these are the genuine consumers of the brand. In his experience, the key success factor for brand protection strategy is the number of controls. Although 100% control, as achieved on bank notes, is not possible for many consumer goods, even a few percent will make a significant difference. It is the controls, as part of an integrated system, that make it hard for the counterfeiters, not just the technology.
Colin Peacock is the long job-titled Director of On Shelf Availability, Shrink & Brand Protection for P&G. He said that all of P&G’s many billion-dollar brands are attacked by counterfeiters, in all regions. Even P&G’s soap brands in China are targetted. Echoing Ruth’s earlier point, Colin described a layered approach to authentication strategy: cutting off supply at sources, not just making seizures; reducing demand from consumers and retailers; and removing opportunity- increasing the effort and risk required by counterfeiters, and reducing retailer rewards and excuses for selling counterfeit goods. His wish was for anti-counterfeit solutions to be near-zero-cost and easy to execute.
During all the talks, and in the lively discussion that followed, two major themes emerged. Firstly it is clear to me that no single technology will solve the authentication challenge for a brand – a whole system-based approach is required, with multiple layers. It’s easy to get trapped into thinking about technologies in isolation – for example one delegate pointed out that using smart phones with cameras to authenticate via the web will just move the problem downstream, as the counterfeiters will fake the website. That is exactly missing the point the speakers were making – we need to move beyond this sort of single point control thinking to a systems approach.
The other really challenging point was how to deliver genuine additional benefits to consumers and brands. This is clearly hard for some anti-counterfeit technologists to get their heads around…. surely the benefit is the genuine product? Well, yes of course, but we need to look beyond this if brands, and brand managers, are going to invest. Colin stated that the 80:20 rule applies and that 80% of the value from these systems will derive from the additional benefits, not just authentication. This, too, needs system wide thinking, and also significant marketing input.
It felt like we only scratched the surface of this challenge, which makes me think there is tremendous scope for innovation. If seemingly disparate technologies across a supply chain can be brought together, with good systematic thinking, then there is the potential not only to hurt the counterfeiters but also for brands to deliver highly differentiated, genuine benefits to consumers.
There is a discussion on this topic within the anti-counterfeit linkedin group. You might also want to read our the blog post of our host for the event, Matt Schofield.
The next Consumer SIG event is on July, more details coming soon here. If it is as interesting as this event it will be well worth coming along. I would say that, though, as we are co-sponsor!
For anyone on twitter, you can follow this series of events with #ConsumerSIG.
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