Should Consumers Care About Counterfeit Goods?
We know manufacturers care about counterfeits. High quality counterfeits compete directly with the genuine article leading to lost sales. Low quality counterfeits damage the brand. Manufacturers employ investigators to shut down illegal operations, they train customs officials to recognize fakes, and they also employ software tools to seek out illegal online distribution and issue takedown notices. According to Google's Transparency Report, there have been dramatic increases in the number of alleged copyright infringements. The number of “URLs requested to be removed” from search per week has doubled in one year from approximately 6 million to 12 million. These takedown notices are clearly not all about counterfeits but it does demonstrate a growing online concern over copyright infringement.
Understanding The Consumers Mind Set
There is a demographic of consumers who will buy counterfeits for whatever reason but most want the genuine article. Counterfeiters know this and are evolving. They produce high quality fakes (“Super fakes”) that target legitimate consumers online with domains that look like the real manufacturer or authorized distributor.
Manufacturers encourage consumers to buy direct or from an authorized distributor but that's increasingly hard to do online. Consumers looking for a good deal can easily be deceived. If the consumer was deceived into believing the item was genuine and later discovers it was fake (i.e. through a failure or return) there is a loss of goodwill and they may never purchase that brand again.
Consumers should care! Counterfeiters are increasingly duping them. Consumers want to buy (and potentially re-sell) the genuine product but have no way to check if the product is authentic. This is especially true for high value items and collectibles.
Product Authenticity Requires Strong Locks That Can Be Verified By Anyone
The best locks for electronic verification use cryptography or mathematical codes that can't be copied or broken. They are used by our financial systems and military alike. Counterfeiters cannot duplicate them.
There is an elegant, easy to use cryptographic lock in the form of Near Field Communication (NFC) tags. NFC tags are like their cousins, RFID tags, which have been used in product supply chains for years. The difference is the consumer can read the NFC tag with their smart phones, since the phone has NFC built in — similar to Bluetooth and Wi-Fi. It's the same technology used to enable Apple Pay and Google Pay.
Consumers simply tap the NFC tag with their smart phone to verify the product. In addition, the NFC tag can be used by manufacturers as an advertising platform. The NFC tag can hold a URL that can be re-directed to any promotion, anytime.
Does a Consumer Verification Model Help Manufacturers?
YES! Manufacturers have limited investigative resources to tackle the counterfeit problem. Customs officials have a limited impact because they must be trained to look for brand specific design marks and trademarks. With the ability to verify a product positively with a smart phone, consumers can't be duped by super fakes when they want to buy the genuine article.