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    June 22, 2021
    8 minute read

    Counterfeit Goods Are a Problem, But How Can Brands Beat It?

    by: Albert McKeon

    As far back as ancient Rome, buyers have been advised to beware of defective and counterfeit goods. 

    But the idea of caveat emptor hasn’t exactly helped sellers combat the copying of their own manufactured goods. Indeed, your brand can feel helpless in the Wild West of ecommerce, where consumers can buy merchandise from millions of digital channels and marketplaces and not always have insight on the provenance of a product.

    The trade of illegitimate goods not only hurts business profits, but some knock-off goods pose a safety threat because of their poor design. Unfortunately, it’s sometimes hard to tell what’s real and what’s fake on a crowded and busy online square. Sometimes, people want fake stuff because it costs less. 

    Consumers spent almost $4.29 trillion online in 2020, up from nearly $3.46 trillion the previous year, according to Digital Commerce 360. Ecommerce shows few signs of slowing in the U.S., even as the pandemic’s grip weakens and gives people less reason to shop online.

    Retail ecommerce sales for the first quarter of 2021 was $215 billion, an increase of nearly 8% from the previous quarter, reports the Department of Commerce. And, according to a 2021 Salsify research report, 43% of consumers expect to shop more online instead of returning to their pre-pandemic behavior.

    More online purchases mean more opportunities for the sale of counterfeit goods. And it means your brand has even greater reason to make consumers aware of the benefits of your products.  

    Fake Goods Decrease Your Brand’s Profits 

    Just as ecommerce sales rise, so does the trade in counterfeit products. In a study of product piracy, the Organization for Economic Cooperation and Development (OECD) and the European Union’s Intellectual Property Office found that trade in counterfeit and pirated goods represented more than 3% of global trade. That might seem like a low figure, but consider that OECD’s most recent estimated value of imported fake goods across the world was $509 billion. 

    This blatant infringement of copyrights and trademarks reduces brands’ profits and the tax revenue of governments. Estimates for lost profits vary widely by industry, but a recent U.S. Customs and Border Patrol bust of a small fishing vessel in California illustrates how much money brands can lose with just one illegal operation.

    Thirty-two million dollars’ worth of phony Air Jordan sneakers, Viagra pills, headphones, and other bogus merchandise were on board, according to the online magazine Input. In 2020, the agency seized 26,503 shipments containing counterfeit goods that had an estimated value of nearly $1.3 billion.

    As the OECD and EU observe in their study, customer trust and loyalty also diminish when consumers believe they’re buying a trusted brand but later realize they’ve been tricked into purchasing fake food, electronics, medical supplies, cosmetics, and car parts — and especially when those bogus products don’t meet government safety standards and pose health and safety risks.

    Too Much Counterfeit Stuff to Chase

    The Office of the United States Trade Representative recently found 39 online markets and 34 physical markets engaging in or facilitating “substantial trademark counterfeiting and copyright piracy.” It’s no wonder brands might believe they can’t possibly keep up with it all. 

    A major U.S. company told the Senate Finance Committee that 72% of merchandise it spotted on online marketplaces such as Amazon, Alibaba, and eBay was marketed as genuine but was, in fact, counterfeit. The company says it annually removes about 600,000 infringing listings from more than 100 global online marketplaces but still can’t stop the sale of goods that mimic their own products.

    Amazon, for one, says it’s stepping up efforts to end fraudulent sales. The retailer says it recently seized and destroyed more than 2 million counterfeit products that third-party sellers had sent to Amazon warehouses in 2020 and that it blocked more than 10 billion suspected bad listings on its website, Ars Technica reports.

    Three Ways to Combat Product Piracy

    Your brand can’t rely on the anti-piracy efforts of others, nor can you play whack-a-mole and chase down every single online sale of copied goods. But you can take three steps that will shape the online perception of your brand’s legitimacy and show consumers they’re buying only what’s true.

    Ensure Your Brand’s Product Content Is Consistent Everywhere You Sell Online

    Of course, that fine-grained level of messaging isn’t always easy to maintain on a large scale when your products are spread across scores of online retailers, social commerce channels, and your own direct-to-consumer (D2C) website.

    It takes dedication and can consume many manual work hours probably requiring the back-and-forth of data entry on spreadsheets.

    But when your brand relies on a solution that automates content distribution, suddenly the chasm between your efforts and the wide marketplace shrinks.

    Indeed, a content distribution system that coalesces all information and identifies data inconsistencies across your product line enables you to uniformly curate content and push out a consistent message, product by product, to all of your retail partners. 

    Original, authentic content puts your stamp on a product and lets consumers know the truth about what they’ve bought, bringing them closer to your brand alone.

    Control Your Product Narrative

    Many consumers have taken interest in how and where products are made. They closely study the sourcing of products and often base their loyalty on whether a brand’s supply chain safeguards worker safety, pays fair wages, and abides by non-destructive environmental standards. 

    While many consumers unsuspectedly buy knock-off goods, many others intentionally buy cheaper copycat merchandise to save money — however, they’re unaware or don’t care about the poor labor and environmental practices behind the sourcing of those products.

    Brands can define sourcing on their terms when they have control of the content of all their legitimate products.

    As Harvard Business Review notes in an article about the counterfeiting problems luxury good companies face, “logos are easy to knock off, but good craftsmanship isn’t. To make fakes less attractive to consumers, luxury firms will need to emphasize a style and quality that is tough to replicate and is independent of the logo. Emphasizing traditional craftsmanship, handmade components, and heritage techniques is a powerful way of infusing a brand with authenticity.” 

    That’s the type of messaging all brands can convey when they control the narrative.

    Leverage Digital Shelf Analytics to Get a Complete, Real-Time View of Data

    The more insight you have about products on your digital shelf — basically, all of the digital touchpoints through which consumers interact with your brand — you’ll have a comprehensive understanding of how shoppers view your products and whether you’re losing the messaging game with the online descriptions of counterfeit products.

    For one, digital shelf analytics gathers customer feedback so you can optimize product content to not only boost sales but also directly address the legitimacy and benefits of your product and dispel sentiment of counterfeit goods.

    The solution should also recommend SEO keywords that will push your merchandise to the top of searches.  

    Win the Battle Against Counterfeit Goods 

    While the vast, murky underworld of counterfeit products seems hard to beat, with automated content distribution, the right words about product sourcing, and effective digital shelf analytics, your brand can let consumers know the real you and win the battle against the phonies. 

    To learn more about how your brand can create the kind of content that will resonate and prove the validity of your product, check out the Salsify case study “One Product, Many Channels: Customizing Content for Retail Distribution Points.”

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