Protecting Your Customers From Counterfeits – A Brand Imperative For Retailers In 2020

  • September 30, 2019 at 4:20 PM EDT
  • By Retail TouchPoints Team
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By Sanjeev Sularia, Intelligence Node

to the OECD, in 2018 $509 billion
worth of
counterfeit goods were sold globally. This not only damages brands’ reputations,
but also weakens consumer trust and ultimately hurts the e-Commerce industry as
a whole. Unfortunately, many online retailers do not have the knowledge or tools
to filter counterfeit products for every single item sold on their sites. However,
it’s more important than ever for businesses to ensure consumer perception of
their brand isn’t undermined by counterfeit goods.

Brands should consider that any interaction
consumers believe they’ve had with the brand, whether genuine or counterfeit, will
impact their overall perception of and loyalty to the brand. Emerging brands
that are online-first and direct-to-consumer (DTC) are no exception to this
rule, as consumers are less likely to forgive bad experiences from a brand they
are unfamiliar with.


The Counterfeiting Problem

With e-Commerce sales on track to surpass $4.5
trillion by 2021
and incidences of counterfeit goods on
third-party sites becoming more
, all brands need to ensure their e-Commerce strategy
accounts for the revenue loss that counterfeiters pose to their bottom line. Beyond
the millions of dollars lost in sales, every counterfeit good sold online
damages consumers’ perception of the brand.

Once a brand’s reputation is damaged, it is
extremely difficult to regain consumer confidence. Rather than spending
marketing dollars on reactionary campaigns to salvage the brand, businesses
will be most successful if they invest in stopping the problem before it
happens. Just tracking and monitoring where all of its products appear online is
a great start in preventing counterfeiting from happening in the first place. From
there, price tracking is key for spotting irregularities that will give away
counterfeit products.

Controlling The Online Experience

According to a report
from Finder, American workers alone spend at least 1.7 hours a day shopping
online. Every interaction during that time will inform how trustworthy and
convenient customers believe particular brands to be. Consumer brands that differentiate
themselves through the quality of their products are at risk of losing loyal
customers should they begin to believe that the quality or authenticity of the
brand has deteriorated.

Mary Meeker’s latest Internet
trends report
cited that e-Commerce sales have
grown to 15% of all retail sales. Counterfeit goods infiltrating the supply
chain will have the greatest impact on online customers who aren’t able to
physically examine their purchases for discernable differences from authentic
goods, which will cut into brands’ ability to take advantage of the growing
e-retail market. With all the imperatives today’s online brands must focus on —
like web design that prioritizes intuitive search, smart recommendations, and
personalized experiences — it’s critical that preventing counterfeit products
does not fall to the wayside.

Brands working to create the best-designed
online shopping experience often deprioritize the experiences they have less
control over. However, taking steps to protect customers from counterfeit goods
cannot be overlooked as a component of curating the best online experience for
your brand.

Counterfeits Aren’t Just For Big Brands

As direct-to-consumer businesses continue to
grow, they should prioritize protecting themselves from imitations that could
take advantage of unsuspecting customers who may not know how to correctly
identify the brand. While DTC brands may not have the same challenges as luxury
retailers, many newly formed brands in the retail market are faced with having
to ward off imitators that lower the overall perception of their goods. It’s
critical for DTC brands to track similar products on third-party sites from the
beginning, to stay ahead of imitators looking to make a quick buck with similar
products or branding. In this way, DTC vendors can continue to claim their
position as positive disruptors for consumers, reducing price by selling
directly to end consumers, not by reducing the quality of their products.

Today’s brands cannot rely on third-party
resellers to take on the challenge that the counterfeit goods market presents. They
need to have technology and strategies in place to be the eyes and ears of the
brand, proactively seeking out instances of counterfeiting before they hear
about it from a consumer or third-party vendor.

This is a business imperative for brands to
protect consumers and their own reputations. Forward-thinking brands will make
this a top priority and, in doing so, will offer a more complete online
experience, and limit the likelihood of loyal customers purchasing inauthentic
products that hurt their carefully cultivated image.

Sanjeev Sularia is CEO of Intelligence
, a retail analytics and AI price optimization company that
offers the world’s largest retail product index. Prior to founding Intelligence
Node, Sularia was the CFO for, a
fast-growing high-end fashion e-Commerce site acquired by Snapdeal, and CFO
for, a
private label e-Commerce company acquired by Myntra. He is a graduate of London
Business School and a Forbes Technology Council member.



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