Manufacturing and selling counterfeit products (or counterfeiting) is a global problem that concerns legitimate producers and retailers in every industry. Companies have to take the actions to prevent this phenomenon and to minimize the exposure of their goods to the risk of being falsified.
It is necessary to point out that fashion and luxury industry is especially vulnerable to counterfeiting. Thus, counterfeiting in this sector is estimated to cause an annual loss of approximately €26.3 billion in Government revenue to the EU economy that corresponds to 9.7% of the sector’s total sales. In turn, these lost sales lead to direct employment losses of 363,000 jobs. Furthermore, it is a well-known fact that nowadays the majority of the worldwide counterfeit goods is manufactured in China.
Since fakery is not just inconvenient for the brands and not only costs them significant revenues but also causes the loss of goodwill and trademark dilution, most of them try to do their best, rigorously fighting against counterfeiting of their intellectual property. However, there is no single global framework for dealing with this problem. So which of the modern technologies fashion and luxury brands can use in order to effectively protect their goods from being counterfeited?
One of the most important means with which brands can respond to this concern consists in inserting unique serial numbers and using high tech labels that are very hard to copy. For instance, luxury brand Ferragamo now places radio-frequency identification (RFID) tags into the soles of their shoes in order to distinguish between counterfeit and legitimate goods.
The implementation of Near Field Communication (NFC) has become for brands a very simple and effective key to product authentication. Thus, the German company, Bagjack, applies NFC tags to protect its messenger bags. As soon as these tags leave the manufacturing site, they are immediately scanned in an effort to track the bags downstream.
Moncler, for example, starting from the Spring/Summer 2016 collection has introduced for all its products a revolutionary anti-counterfeiting system, which uses the most recent NFC technologies. In this way, customers can confirm the authenticity of the product by visiting the company website, or reading the QR code or NFC code with their smartphones.
However, modifying products themselves very often turns out to be very expensive for the brands. Nevertheless, they can still make use of technology to resist the counterfeiting. There are apps that permit to share and track falsified products (uFaker) or provide location information for prospective counterfeit goods (Black Market Billions).
To sum up, using modern innovative technologies, brands can elaborate very useful strategies in order to avoid high losses related to the manufacturing of the copies that imitate their goods and, consequently, to successfully protect their brand reputation.
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