Brand protection strategies just got smarter
Customer loyalty: the holy grail
As a business leader, you know brand protection is critical. You understand the importance of safeguarding your brand’s reputation – but you also know it’s not an easy task.
Brand protection is a constant challenge for business leaders, and it’s one that continues to evolve at a rapid pace.
This brand protection special feature includes statistics, case studies and quotes from business leaders; it’s designed to empower you to continue to protect your brand’s reputation, now and into the future.
“Your brand is the single most important investment you can make in your business.”
Steve Forbes, Editor-in-Chief, Forbes Magazine
Why brand protection matters
Brands are so much more than a logo or a name – they are an amalgamation of your company’s reputation, quality and consumer trust. And that’s definitely worth protecting.
At its core, brand protection is a risk management strategy deployed by companies to safeguard their valuable assets against misuse, infringement and counterfeiting.
When consumers buy from your brand, they are essentially placing their trust in you – and trust matters. According to a 2022 Salsify survey, in the United States 46% of consumers said they would pay more to purchase from brands they can trust.
Brand protection is a vital element in any business strategy, particularly in a time where brand fraud and counterfeiting are rife.
The expanding global marketplace, spurred on by the digital revolution, has inadvertently provided a playground for fraudulent activities that can be detrimental to brand value and ultimately business value.
According to a recent blog post published by Dennemeyer Group, a leading international patent law firm based in Luxembourg, “Your brand is your business identity. Keeping it safe against copycats, counterfeiters and competitors is vital to the viability and success of your enterprise. Whether your organisation is a multinational corporation or a fledgling startup, without a solid protection strategy in place, your company’s brand image is vulnerable to misrepresentation, tarnishment and even a lack of definition and consistency.”
Brand fraud: a persistent threat
Brand fraud can take many forms, including counterfeiting, trademark infringement, grey market sales, domain name infringement and cybersquatting.
These terms are well within the sphere of experienced brand protection managers. However, the general public is most likely to be alert to the two most common types of brand fraud.
- Counterfeiting, widely considered to be one of the most common forms of brand fraud, occurs when fake goods are sold using a brand’s name, logo or packaging.
- Grey market activity involves the sale of genuine products outside of authorised channels, which can lead to issues such as pricing disparities and a lack of control over the product’s distribution.
The impact of brand fraud is three-pronged: it affects businesses, consumers and the environment.
- Businesses: Counterfeiters create serious problems for authentic businesses.
The Global Brand Counterfeiting Report 2018-20 estimated the global economic value of counterfeiting reached $1.82 trillion in 2020. Chances are, your business has its own concerning data or evidence related to the impact counterfeit activity is having on your business.
Alice Sherwood, author of Authenticity: Reclaiming Reality in a Counterfeit Culture (HarperCollins, 2022) and contributor to The Guardian, cited that one French customs raid alone confiscated enough fake Louis Vuitton fabric to cover 54 tennis courts.
Brand fraud devalues brands well beyond a single transactional sale being lost; it undermines the trust of consumers and damages your brand’s reputation. Erosion of consumer trust can be detrimental to businesses.
As we move into the post-pandemic era, trust and transparency have never been more important. Digital Commerce 360 even says, “Trust is the new consumer currency.”
- Consumers: Counterfeit components and parts continue to create health and safety risks for consumers. Counterfeit products often do not meet the safety and quality standards set by the genuine brand. In the worst cases, this can result in physical harm. Counterfeit medicines and beauty products have caused health issues, even death, while counterfeit auto parts have led to accidents due to their substandard quality.
A long-term study conducted by the Department of Forensic Sciences in Washington DC found that as many as two in three pills examined in the lab were fake. And 75% contained fentanyl: a drug of abuse that’s 80 times as potent as morphine, hundreds of times more potent than heroin and potentially fatal.
Forensic Science International reported: “These counterfeit pills pose a considerable threat to public health, made worse by the illicit market’s disregard of safe limits of drug concentrations and/or drug combinations.”
In addition to the serious health and safety risks that some counterfeit products pose, the consumer experience with counterfeit products can also quickly lead to destruction of brand confidence, trust and loyalty.
Statistics via Outbound Engine reveal that acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5% can increase profits 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
Clearly, it pays to retain and nurture your consumers – which is significantly more difficult without a robust brand protection strategy.
- The environment: Counterfeit production lacks regulation and often disregards environmental standards, contributing to pollution and waste. For example, the production of counterfeit electronics frequently involves hazardous materials, improper disposal of which causes environmental harm.
According to TotalRetail, “After large quantities of counterfeits are seized by law enforcement, the products are often destroyed by incineration. This leads to massive amounts of air pollution.”
In November 2022, Chinese authorities reportedly destroyed a giant haul of counterfeit products purporting to be from brands such as Nike and Louis Vuitton at an event held across 17 provinces and cities. Reuters reported that, in all, 3,000 tonnes of counterfeit products valued at 500 million yuan (US$69 million) were burnt, dismantled or thrown into landfill.
“If there’s one thing that we know about the trade of counterfeit and pirated goods, it is that it continues to increase alarmingly.”
The counterfeit threat and impact is truly global. Fair Wear, a charitable organisation with a mission to improve labour conditions in the garment industry, highlights that counterfeiting is not a victimless crime. “The workers who make the counterfeit items have no way of assuring fair labour conditions. As factories where counterfeit goods are produced are illegal, labour inspectorate, unions and other stakeholders do not have access to the people working there.”
Counterfeit targets
If you sell a premium or popular product, the risk of counterfeiting is very real. Some of the key product categories that are grappling with ongoing brand protection issues include:
- Pharmaceuticals
- Automobile parts
- Footwear
- Fashion and accessories
- Art
- Perfume and cosmetics
- Watches
- Medical equipment
- Luxury food and beverages
- Toys
- Tech equipment and devices
- Leather goods
- Jewellery.
In all sectors, the incentive for business leaders to implement brand protection strategies clearly goes well beyond bottom-line impacts. According to the World Health Organization, roughly 10% of medical products circulating in low- and middle-income countries are substandard or falsified. In sub-Saharan African nations, this share is believed to be even higher, rising closer to 19-50%.
Source: Statista
Combating the counterfeiters
The authentication and brand protection market continues to grow in response to the threats posed. Research and Markets forecast a compound annual growth rate (CAGR) of 8.2%, which will see the market value reach US$5.04 billion by 2030.
What’s the right brand protection solution for your business?
As a business leader, you aren’t alone in looking for brand protection solutions. The challenge can be to find a brand protection solution that actually works, is cost-effective, and can scale. Additionally, leaders should also be looking for a solution that can do even more than just protect your products.
Gaining buy-in within your business for your preferred brand protection strategy is also essential. You need to be able to demonstrate, with results, which brand protection initiatives are worth your company’s time, effort and investment.
The ability to share with your stakeholders tangible statistics and case studies will strengthen the case for your preferred brand protection approach.
Laava® has a range of solutions that meet these needs, and its track record in market is the reason why more and more brands are turning to its innovative solution suite.
View our detailed case study to learn how Laava effectively eliminated counterfeits in premium fruit exports to Asia for one of Australia’s leading brands (and we’re now heading into our fifth season together). And read on to learn how we help to shut down a multi-million dollar grey market trade for one of the Crocs Group brands – a company that will make over 60 million pairs of shoes in 2023.
Class-leading, global brand protection
Next-generation brand protection technologies that are proven in market are available now. Laava is the developer of the Laava Smart Fingerprint® – the world’s first secure and scalable alternative to QR codes for brand protection and consumer engagement. Laava creates trusted experiences for brands and consumers – through smartphone-based product authentication, supply chain traceability and compelling digital experiences.
Laava’s distinctive and revolutionary Smart Fingerprint technology helps protect brands and consumers against the risk of counterfeits, fraudulent activity and diversion – while simultaneously building consumer engagement, brand value and revenue through immersive digital experiences.
“Laava’s patented computer-vision technology is the result of years of research and development in collaboration with peak scientific and cybersecurity organisations. It’s already delivering significant brand protection benefits to companies around the globe, across various verticals,” said Gavin Ger, CEO and Co-Founder at Laava.
HeyDude's brand protection initiative hits the ground running
Not only did HeyDude sell more than 25 million pairs of shoes in 2021, they’ve also been snapped up by footwear retail leader Crocs in an outstanding $2.5 billion acquisition deal.
The innovative team at HeyDude chose to protect their brand by deploying Laava Smart Fingerprints on their shoes, which are in high demand by consumers across the globe.
Christopher Martin, Head of Digital Commerce shares his experience: “HeyDude Shoes are excited to partner with Laava for our brand protection solution for the coming seasons.” Over the last three years, HeyDude Shoes has experienced enormous growth and popularity. Recently, HeyDude has been voted the fastest growing casual footwear brand in the USA by The NPD Group.
“Working with an innovative company like Laava enables HeyDude to bring a secure, scannable product authentication technology that gives customers confidence that their latest pair of HeyDude Shoes are genuine and authentic.
“We look forward to developing this platform with Laava and providing our customers with shoes that can take you anywhere.”
Christopher Martin, Head of Digital Commerce, HeyDude
Biogency’s healthy brand protection strategy
Biogency brings innovative and effective health and beauty products to consumers around the world.
Looking for a brand protection solution that offered stronger security than the QR codes used by their competitors and emulators, the Biogency team approached Laava in 2020.
Their aim was to protect their innovative business from counterfeiters and establish a visible mark of trust capable of readily distinguishing the genuine article from fakes. They also wanted to highlight to consumers their commitment to authenticity and safety, as part of a strategy to continue to strengthen consumer loyalty.
“It was essential that Biogency stand out from the crowd, with an integrated solution that would drive a clear return on investment and build brand value. Our counterfeit issue now is minimal as a result of our partnership with Laava.”
Jimmy Tang, Sales and Marketing Director, Biogency
In 2023 Biogency launched further products featuring Laava Smart Fingerprints and introduced further Laava features.
Brand protection in action
Leveraging the power of Laava’s data analytics and insights engine
Brand protection teams and marketing teams alike are leveraging Laava’s sophisticated analytics engine to:
- gain valuable insights into consumer scanning behaviour, including the date, time and location of every item scanned
- analyse the effectiveness of different marketing campaigns, product labelling and calls-to-action
- identify and investigate anomalies
- direct investigations or forensic action.
Laava customer Reid Fruits recently conducted a season wrap for its integrated brand protection campaign in Asian export markets, uncovering incredibly useful insights, such as:
- Most consumers in China used WeChat to scan their products.
- Most consumers in Vietnam used the Laava web scanner.
- Scanning activity was highest in Hong Kong.
- Scan activity correlated closely with cherry season, when the fruit was at its best.
Laava has also recently delivered some incredible insights into the kinds of content that resonates with consumers, as well as their content consumption behaviours. Thanks to integration with Google Analytics, Laava is now serving up insights into consumer scrolling, dwell time and out-linking – for a number of consumer products brands. This complements work Laava has been doing with test cell development and trialling of different on-label designs. The insights gained are revealing. Laava is in the process of documenting further case studies on these campaigns and capabilities – so stay tuned!
And of course, all of these insights and consumer engagement capabilities have been carefully designed to fully comply with consumer privacy legislation – something every brand needs to keep top of mind.
Delivering outstanding consumer registration insights and outcomes
For another Laava customer in the computer accessories sector, we trialled four test cells with different calls to action – ‘scan to register’ or ‘scan to win and register’ – in two different colour combinations. The objective was to leverage the power of connected packaging to drive consumer registrations – for remarketing and consumer insights purposes.
Using the data collected, our customer was able to determine that the combined offer (‘win and register’) resulted in the highest scan rate, as did the stronger colour combination. The data will inform their future label design and campaign planning.
Also compelling was the conversion rate: an impressive 79%. That is, of all the consumers who scanned the Laava Smart Fingerprint, almost 80% went on to register. When our customer compared that conversion rate with the results from other invitations to register, the difference was marked. Laava’s engaging digital platform, combined with an attractive label design and clear CTA, came out the clear winner.
Laava is in the process of documenting further case studies on these campaigns and capabilities – so stay tuned!
And of course, all of these insights and consumer engagement capabilities have been carefully designed to fully comply with consumer privacy legislation – something every brand needs to keep top of mind.
Elevate your brand protection strategy with Laava
In today’s global marketplace, digitally connected in every way, CMOs, CIOs and brand managers are in a constant war against counterfeit and other forms of fraud. The damage to businesses, consumers and the environment is not just worrying: in fact, the results can be catastrophic.
The range of technological solutions on offer is only growing – and every business leader will have their own checklist of priorities to make their choice. However, our experience has led us to some conclusions on what are the most important considerations in assessing what is a valuable brand protection investment.
- Is the technology proven? Does the company behind it already have success stories, including ongoing customer relationships?
- Will it work anywhere in the world, to accommodate your consumers in the global marketplace, who speak different languages and prefer a range of platforms?
- Is it scalable yet affordable?
- Is it completely, 100% secure for your company and your customers – as well as attractive and engaging to ensure that consumers take up the offer?
- Is it easy to deploy and to integrate with your existing systems – and easy for consumers to use and understand?
- Will it be possible to combine and layer protective measures as success builds?
Laava offers all those significant security, brand protection and customer engagement benefits, and grows in line with the needs of our customers. Our product suite, which includes the Laava Smart Fingerprint and is now expanding to meet new customer needs, provides the trusted gateway for brands to prove their claims, assure consumers and engage directly at point of purchase and beyond.
Interested in continuing the conversation for your business? Tap into the Laava team’s significant experience and let’s take your business’s secure connected packaging strategy to the next level.
Learn more about Laava
To take your first step towards harnessing the power of secure connected packaging to drive consumer engagement, contact Laava today.
