React, The Ecommerce Foundation and Scamadviser.com recently organized an interactive workshop about the Future of Brand Protection. Together with several brands amongst which Adidas, ASICS, Calvin Klein, Cluse, G-Star RAW, Jacob Douwe Egbert Coffee, Rosefield, The Bulldog and Tommy Hilfiger, ideas were shared on how brand protection will develop towards 2025.
Key Trends influencing Brand Protection
The participants were spread across multiple working group and each was asked to define key drivers of change for the brand protection industries. Amongst the key trends identified were:
- 3D Printing: Certain industries are already impacted by 3D printing. For example, 3D designs for spare parts for Bugaboo strollers can be freely downloaded. If every household owns a general applicable 3D printer, the same may happen as happened in the 90’s with software; an explosion of copyright infringements.
- Market Places: Market places are becoming more compliant. Their “Know Your Customer” processes are improving as well as the speed with which infringing products are taken down. As the power of marketplaces grows, the question is to what extend this trend will continue. Alibaba’s long-term goal is to become the 5th economy worldwide. Do brands (and governments) have enough power to keep enforcing compliancy?
- Social Media: As marketplaces enforce more, criminals are fleeing to social media channels like Facebook, Instagram and Pinterest. Here they try to reach consumers en mass and entice them to buy fake products from their websites, seller accounts or even directly using the payment infrastructure of the social media platform.
- Off the Grid: Social media are not only used to sell to consumers, counterfeit producers also use closed groups to sell to wholesalers and retailers of fake products. Next to social media, the Dark Web is increasingly used to facilitate the supply chain of counterfeit goods. These channels cannot be found using traditional methods.
- Cryptocurrency: While Facebook’s Libra coin is not yet live, it would give a tremendous influx on shady transactions as Bitcoin and other cryptocurrencies already have done. Being globally supported and impossible to track, it will boost criminal transactions.
- Flash sales: In response to faster identification and take down processes, counterfeit sellers are shifting to setting up weekend stores as enforcement takes 2 days off. Already a trend is visible towards one-day and even one-hour flash sale sites where for a very short time illegal products are offered making identification and prosecution much harder.
- Regionalization: With all the trade battles going on, it is difficult to predict if the globalization trend of the last decades will continue as regional and national sentiment increases. A dark scenario in which regions or nations no longer uphold IP rights from companies from other territories, is not considered unrealistic.
- GDPR legislation: the news consumer privacy laws have proven to be a great bottleneck for prosecution of criminals as data which may lead to individuals may no longer be shared. It is unsure enforcement of the GDPR laws will be toned down or rigorously applied.
- Voice commerce: The rise of voice commerce may make it more difficult for brands to position themselves. Voice initiatives are currently controlled by platforms like Apple, Alibaba, Amazon and Google and lack brand experiences and direct contact. Voice commerce may limit the value of brands considerable.
- AR/VR: On the other hand, new technologies such are augmented reality (AR) and virtual reality (VR) may allow brands to create entire new worlds to connect with consumers and build their brand.
- Consumer Behavior: Consumers’ attitude towards counterfeit products may change. As the importance of sustainability, transparency is increasing, so may be the wish of consumers to ‘buy the real thing’ which supports the circular and sharing economy.
Brand Protection in a Brave New World
The overall feeling is that the need for brand protection is not diminishing, only shifting. Artificial intelligence is often named as “magic hammer” to fight the sales of counterfeit goods. However, while identifying fake product may become easier, off the grid channels, cryptocurrency and flash sites introduce new challenges where human investigation remains necessary.