Counterfeiting has become a phenomenon that is pervasive across almost all countries and industries. Based on the Organisation for Economic Co-operation and Development( OECD), the estimated size of the international counterfeit market accounts for US$509 billion, representing up to 3.3% of global trade, and it is expected to represent $991 billion of the global economy by 2022.
Counterfeiters are getting better and better at making product packaging almost identical to the original, making it harder for customers to identify the fake from the real.
Unfortunately, Brand owners are the ones struggling with the consequences of it all, from coping with the loss of sales to re-establishing the reputation that counterfeited products tarnished. An online survey showed that 34% of customers believe that brand owners are responsible for protecting them from counterfeits, and with the supply chain becoming increasingly complex, monitoring fake products and removing them from the market on a global scale is becoming almost impossible, making fraud a more serious threat than ever before.
So how can you protect your brand’s integrity and save your consumers from purchasing fakes?
Introducing: Product Citizenship
So what is Product Citizenship? Analogously to the citizenship that we all know about, a “Product Citizenship” is gained when a product meets the requirements and criteria set by its company, if it lacks certain requirements, it can’t be part of the said brand.
Similar to your ID card, a “product citizenship” will give each of your products an identity that allows it to be identified anywhere by anyone without much effort. However, Do not be intimidated by the term, it is feasible by companies of all types and sizes.
The core concept of Product citizenship lies upon two values: Protect and promote
- Protect: Product citizenship will protect your product and customers from the effects of counterfeit, and prevents customers from getting fooled by imposters, as it makes the detection of the fakes from the real effortless.
- Promote: With Product citizenship, you can get your product to promote and advertise itself without additional work on your part, saving you time and money. All you have to do is to include the information, campaigns, deals, coupons that you wish to promote and entice new and current customers with into the QR Codes; this by itself will revolutionize your product and your customers’ experience of it.
Why do you need product citizenship?
Companies are finding themselves caught between avoiding losing time and resources while dealing with counterfeited products and doing their best to please their customers.The major impacts of counterfeits on brands manifest in :
- Loss of sales :
Based on MarkMonitor research, 47% of brands lose their sales revenue to counterfeit or pirated goods, with one in three reporting a loss of more than 10%.
To make this threat more tangible, the sale loss in the clothing industry alone has reached 31.8 billion USD, this issue extends across multiple sectors with people opting to buy low-priced goods, unaware of it being fake and what damage it can bring to them and the brand. The same research findings showed that 58% of respondents agree that fighting counterfeit to secure and protect their brands will be more challenging in the next five years.
- Damaged reputation:
MarkMonitor’s report showed that four out of 10 consumers who got scammed into buying fake products complain directly to the brand and leave bad reviews on their websites and social media platforms, unaware that the product at hand isn’t the original.
“When we have customers, or new users, who think they’re getting a Beauty Blender for a much cheaper price when they call in and want to talk about that experience, it creates a challenge.”
– Shelley Swallow, Customer Relations Manager of Beauty Blender
Customers who were victims of counterfeit leave negative reviews online and even demand refunds for the damage caused by it, especially if the said product is under pharmaceuticals, beauty products, or any consumer goods that might have put their lives at risk.
This problem can have a disastrous impact on the brand’s reputation since whoever reads or believes these claims will believe that the brand makes low-quality goods, and they may even advise others against buying its products.
- Losing customer trust
In addition to getting a bad reputation, counterfeited products can make customers lose their trust in a brand and switch to another, according to Retail Dive, more than 60% of consumers lose trust in a brand after unwittingly purchasing fakes, Moreover independent research commissioned by Incopro. Proclaims that 76% of UK consumers would rarely and even avoid buying products from a brand if their reputation was associated with counterfeit goods.
How can I implement “Product Citizenship” to my products?
Product packaging is the first thing that a customer interacts with before making a purchase, and in most cases, it is why most people get fooled into purchasing a fake product. There are many ways you can implement product citizenship to your products, the most efficient one is through Smart Packaging.
In principle, Smart packaging is a packaging with extended functions that offer benefits beyond mere packaging tasks.There are usually two types of smart packaging – Active and Intelligent.
The main purpose of active packaging is to extend the shelf-life of the packaged products by maintaining and improving their quality, on the other hand, the “intelligence” of packaging essentially results from its capability of “communication ” with the outside world. The aforementioned is attained through the integration of different technologies, predominantly: QR Codes.
By generating unique product QR codes, you can direct your customers to a landing page where you can share dynamic content and enable them to have a better understanding and insights into your product value.
Moreover, you can use these QR codes to link customers to specific campaign websites, provide them with exclusive deals, discounts, and even future offers. They can be gifted with limited vouchers or get links to demonstration videos that help them enjoy their products to the fullest.
On the whole, customers can access a wealth of information about your product with a mere scan from their Smartphones. It is the only thing needed for this smart packaging to deliver and fulfills its functions of informing, automating, protecting, and marketing your product to your customers.
It is very easy to create a QR code for your product, just visit this free tool, and you can generate one within seconds! This free tool allows you to easily generate QR codes if you have less than 100 products. For larger product quantities, you may want to consider using different software that can generate hundreds if not millions of unique QR codes for your products depending on your business size, such as BrandTag
Benefits of Product Citizenship
Fortunately, Implementing Product citizenship (Smart Packaging) will help you eradicate most of the counterfeited related issues, especially those mentioned above. The following are some major benefits that product citizenship can bring to your brand:
- Authenticity proof
With product citizenship, your customers don’t have to worry about purchasing a counterfeited product, all it takes is one scan from their smartphone to access all the information needed about your product to prove its authenticity. Thus, protecting your products and customers simultaneously, since anyone can identify your products no matter where you are selling them.
- Stay relevant:
Customers are more interested in innovative brands. Therefore, integrating product citizenship on your products will help you stay relevant in your customer’s life while they are using innovative platforms, and strengthen your competitive advantage against your rivals. Most importantly, this technology will connect your company with its existing and potential customer base.
- Connect and gain customer loyalty
With Product Citizenship, you can connect with your customers emotionally. A highly engaged customer buys more, promotes more, and demonstrates more loyalty to your brand. With this technology, you get to build a community, keep your customers engaged with your business and get manufacturers and consumers to establish trust or even regain it if broken.
- Let your product do the work for you!
Besides providing information, Product citizenship ( smart packaging) can be a valuable tool for marketing campaigns where brand owners can foster customer engagement and brand awareness.
With this embedded technology, your product can clear your potential customers from any doubts or questions that might be holding them from choosing your brand, without the need of your assistance or a promoter to voice off the perks.
Product citizenship can help you explore your creativity, and aid you in revolutionizing your customers’ shopping experience, by making a simple purchase more enjoyable and memorable for your customers.
“Having an app that would protect your products and at the same time engage with your customers is like killing two birds with one stone, truly a need!” – CEO of Luxtag, Rene F. Bernard
BrandTag is a SaaS (software as a service) solution that gives each of your products a unique ID for consumers to scan and verify authenticity. It uses blockchain technology to help brand owners and manufacturers to prove their brand story and product transparency with accessible documentation to verify authenticity claims.
While your consumers are scanning your Product QR code, you can gain an insight into their buying intentions and behaviors, helping you in determining your brand’s next marketing direction.
Want to find out more about BrandTag? Check out our previous article, BrandTag – Authenticity, Confidence, Engagement, for a thorough explanation of how BrandTag works for you and your brand!