December 19, 2019
By Kelly Smith
‘Tis the season for shopping, with millions of consumers turning to e-commerce sites during the holiday season to place orders. This year, Cyber Monday reached a record-breaking $9.4 billion in sales, up nearly 19% from last year. However, with an increase in online shopping comes the inherent risk that counterfeits enter the mix.
In 2018, 84% of consumers said they would never buy fake goods as gifts intentionally; however, almost half of consumers have done so by accident. When shopping online—where 60% of product searches on Google surface fake goods—the inability for consumers to verify authenticity leads to a greater number of counterfeit products entering the market. In particular, during the holiday season, when consumers expect to find slashed prices and too-good-to-be true deals, supply chain compromises can often go unnoticed, racking up a number of costs for brands.
As global counterfeiting intensifies, with a market share expected to reach $1.82 trillion by 2020, companies are called to reinforce their supply chains and shut down unapproved vendors in effort to protect consumers and their bottom line. Here’s how:
In 2018, 84% of consumers said they would never buy fake goods as gifts intentionally;
Today’s high-volume, high-velocity manufacturing operation operates across numerous factories around the world, introducing a myriad of opportunities for compromise. In fact, a manufacturer with $10 billion in annual sales loses as much as $450 million to gray market product diversion, with compromises often going unnoticed due to a lack of visibility into the supply chain. Conversely, operators equipped with traceability technology are able to track products on an individual level, identifying when batches fall off the supply chain in order to shut down points of compromise before they become established areas of gray market diversion.
The modern consumer has high expectations for the brands with which they interact, demanding high quality, ethically sourced goods. In a recent survey, 75% of respondents considered transparency helpful in strengthening the trust between businesses and consumers. Yet, an inability to verify the integrity and authenticity of products impacts consumer confidence in brands, leading many once-loyal customers to switch to more transparent brands. For instance, 75.2% of consumers in Canada surveyed in 2016 stated they were willing to pay 1-5% more for zero food fraud certified products; the other 24.8% were willing to pay 6% or more. In order to meet consumers rising expectations, brands therefore not only require the ability to track products on an individual basis, but also necessitate access to a secure, Blockchain-enabled database that can provide stakeholders relevant information on product genealogy—empowering consumers with the granular-level data they seek.
Data is the lifeblood of the manufacturing operation, with Industry 4.0 playing an increasingly important role in factory processes. Through true Industry 4.0 insight, manufacturers are enabled to capture holistic records of products, correlating equipment data to specific items in order to unleash factory-wide insight. Such technology is utilized by leading brands in order to break down the data silos traditionally present in factories that often allow counterfeiting efforts to go unnoticed. By unleashing backward and forward traceability, an advanced traceability solution empowers manufacturers to achieve the supply chain-wide insight required to verify product integrity and authenticity across suppliers and distributors, thwarting counterfeiting efforts of nefarious actors.
As counterfeiting efforts intensify, it is critical for companies to ensure their supply chains remain secure at every checkpoint. At Ashton Potter, we deliver product security and traceability at scale through the unique combination of high security printing, ProLinc® technology, and white glove integration services, enabling brands to activate global visibility across their complex supply chains and prevent counterfeiting.
Ready to protect your supply chain from nefarious actors? Speak with an expert today to learn how ProLinc can help stop product diversion and protect your supply chain.
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Tags: counterfeiting, data, traceability