Challenging times for brand owners
In today’s complex supply chains and demanding market environments, brand owners are facing more challenges than ever when it comes to the protection of their brands and goods. Challenges such as counterfeit and pirated products, gray market practices and unauthorized distribution are part of their daily business.
Counterfeit is growing in value and reach, harming businesses and brand owners across all continents and industries. By 2015, the International Chamber of Commerce (ICC) expects the value of counterfeit products globally to exceed $1.2 – $1.7 trillion USD. The estimated economic costs of counterfeiting in the food and personal care industry are about $50 billion each per year.
As for brand owners, counterfeits are big brand value detractors resulting in considerable financial losses, e.g. lower sales revenues, eroded market share, wrongful lawsuits etc. Besides these direct monetary losses, brand owners are also facing heavy impacts on their brand image and brand reputation. Due to counterfeit products, consumers see less value in authentic products versus cheaper look-alikes, brand reputation is harmed once consumers are let down by counterfeits that don‘t work, consumers‘ health and safety may be at risk, and relationships with distribution partners will suffer.
How to effectively fight counterfeiting
What can brand owners now do to effectively fight counterfeiting? One of the drivers of counterfeiting is the increased complexity of the modern supply chain – internationalization, outsourcing, e-Retailing etc. leads to less control for brand owners.
Brand owners need to secure their assets from source to sale, as counterfeit products can and do enter the supply chain from many points. This includes from the very raw material sourcing stage, at the manufacturing site, across distribution channels and at the final point of sale.
Holistic brand protection solutions can integrate control across the supply chain to combat counterfeits and channel diversions. Brand protection solutions enable authentication and tracing via various stakeholders e.g. company internal audits/authentication controls, third-party inspections and authentication checks by consumers.
RFID technology enabling holistic and effective brand protection solutions
There are various different technologies on the market enabling brand protection solutions, such as holograms, watermarks, 2D barcodes, matrix digital codes, etc. All of these enable asset authentication but compared to RFID technology, these methods can be more easily copied or tampered with.
RFID is very powerful and unique as it provides a combination of brand protection functions – these are authentication, track & trace, and tamper evidence. This multi-functionality enables an integrated end-to-end brand protection solution making RFID a highly cost effective and easy to implement choice for total asset protection along the supply chain.
Key reasons to choose RFID brand protection solutions:
- Unique identification: RFID can uniquely identify a product – the embedded unique serial identifier (UID / TID) verifies that the product associated with a tag is genuine and that it has been supplied through authorized channels
- Highest security: Secure cryptography integrated into an RFID tag offers very high counterfeit and cloning protection
- Size and no line of sight necessary: RFID tags can be very small and can be covertly embedded into products – no line of sight required for being able to read the tag
- Tamper protection: RFID tamper protection can be useful to identify if tampering has occurred or if the packaging has been opened previously
- Traceability: Traceability systems facilitate supply chain management and inspection – helping to assess identity, location, ownership trail and condition of an individual product
- Reading and identifying multiple items at once: Anti-collision permits near simultaneous identification of hundreds of items – hence the ability to count multiple items automatically through packaging and speed up processing
- Consumer self-checks and enhanced consumer interaction/experience: Consumers can verify a product‘s authenticity using their own smartphones to gain assurance on product quality and provenance. Brand authentication apps function in conjunction with RFID or NFC tags carried on the packaging or on the product itself. In addition, consumers can now get access to additional product information, consumer rewards and warranties for buying authentic products, complementary merchandise recommendations and location-based messaging and offers. This allows the capture of valuable consumer data to generate new behavioral insights.
NXP RFID brand protection success story
DUCLOT, the famous and most prestigious Bordeaux wine merchant, protects its unique DUCLOT BORDEAUX COLLECTION CASE using Qual’ID Solutions’ services and NXP’s HF RFID chip. Consumers can tap their NFC-enabled mobile phone against DUCLOT‘s RFID tagged Bordeaux collection case to verify its authenticity via a unique serial identifier on each tag. The RFID solution also offers integrated traceability from vines all the way into points of sale, and consumers receive additional product information, e.g. about the growth variety, the cellars, serving tips etc.
Why NXP RFID solutions?
NXP is #1 in Identification and leading in RFID industry innovations. We offer a full suite of high performance contactless solutions across the full RFID frequency range – enabling a world of smart objects. Our ICODE, NTAG, MIFARE and UCODE product families meet your specific brand protection needs across different security levels and operating ranges. We’re trusted by governments and the banking industry for decades, equally working with multinational clients across many industries.
 Source: ICC/BASCAP – Frontier Economics Report, 2011; G20: group of the 20 most important industrial and emerging countries in the world
 Source: WHO, World Customs Insitute – Datamonitor Anti-counterfeiting for FMCG report, 2013