Brand Management in an era of rising fakes & counterfeits. Go Phygital. Have your genuine cake & afford it too!

While the modern discipline of brand management is widely accepted to have started by a memo at Procter & Gamble[1] by Neil H. McElroy, the early origins of branding go back to pre-historic Neolithic times with evidence of branding of farm animals in the middle east. Egyptian funerary artwork shows branded animals followed by pottery, tools and general goods depicting some form of stone seals[2], or insignias. Diana Twede has argued that the "consumer packaging functions of protection, utility and communication have been necessary whenever packages were the object of transactions"[3]. In a largely pre-literate society, the shape of the product and its pictorial markings functioned as a brand, conveying information about the contents, region of origin and even the identity of the producer which were understood to convey information about product quality.

Fast forward into 2020, as Ecommerce surges ahead, as almost the first choice for people to shop anything, with global penetration approaching 49% (1 out of 2 humans). Anywhere, Anytime, Anything rules the roost and is becoming main stream faster than anyone dreamt of, and of course COVID came in to bust any resistance left towards Online. Brands need to fight harder across the entire customer moments of truth - Zero Moment (even the thought to buy something), First Moment (On Shelf On App) and Second Moment (Consume it). Their distinct colour, shape, and packaging have become even more important to allow them to stand out and win across the entire journey. But its not getting easier!

Brands face 3 major challenges –

(1)  Counterfeits – Advances in printing and reprographics has made creation of counterfeits a cottage industry for even the most sophisticated packaging. On the product itself, constant outsourcing of manufacturing to lower cost contractors is now a 3+ decade old phenomenon leaving to anyone’s imagination what the supposed dedicated and exclusive factories are making in the “third shift”. It’s no longer a surprise for brands to find themselves being retailed at below cost price at various thrift or discount outlets and now on the world wide web. Add to this the 1million 3D printers now in circulation, making it easier by the day to produce a lot of products without the knowledge of the brand. Customs data on several brands have revealed 20-30% additional units being exported from the countries of contract manufacturing than they had ordered. 0.5-1.5 Trillion is the estimated size of the counterfeit market of all products which is about 5% of global trade and rising.

(2)  Lack of Track & Trace – Supply Chains & Distribution of goods has transformed well beyond the control of any brand. Faceless resellers, distributors, online retailers now traverse the various web within web of ecommerce from the Amazons of this world to the dark web. Gone are the days of buying only from the authorized dealer or retailer. The package just arrives in a nice brown box with no idea of its journey and origin.

(3)  Direct Customer Engagement – Brands have always remained a step removed from their customers and relied on the retailers to share information and make the final connect. With the above landscape of multi-channel retailing and delivery of the brand, there is a risk of losing control over a coherent interaction with the customer. 

Can the Digitization tidal wave also help brands to tackle these 3 challenges? The answer, is a clear Yes. Breakthrough technologies from companies such as Fasiculus, SICPA, Systechone or De La Rue are helping brands across one or all these 3 areas of lending Authenticity, Visibility & Interactivity to brands right from the package itself. These solutions help brands demonstrate complete trust in brands and products right across the supply chain, delivering a secure package or label which envelopes an authentic product. These phygital solutions are uniquely designed for packaging, labels and printing, wherein they bring together the physical and digital aspects of product provenance.

A holistic solution should bring 3 capabilities -

Authenticity – The phygital label to irrefutably confirm genuineness and attributes of a package through supply chains, from Farm to Fork or Factory Floor to Consumer.

Visibility – Allow businesses to make themselves, their products and supply chains more Transparent and Traceable. Geo-Tag every sku in the entire journey via their Track & Trace solutions.

Interactivity – With Unique codes for every single package (Unitary Level) the package can come alive! Retailer, Brand Owner, Loyalty Marketeer can have a direct 1:1 relationship with each customers or influencer in between. No matter where the consumer bought the product, having the visibility & connect from start to the point of consumption is a holy grail for marketeers.

With all product authenticity, Track & Trace or consumer interactivity solutions, cost of implementation remains a big challenge. Only cost-effective solution requiring low incremental consumables, and leveraging existing label, packaging, printing and manufacturing lines set ups would make the financial ROI threshold. Conducting first principles basis and re-construction of the should cost, will allow digitization with a minimal or cost neutral shift to a transformation of the product labelling or packaging. Fasiculus, in particular, specializes in optimizing using their proprietary Should Cost Calculators. This is how the brand can have its genuine cake and afford it too!

In conclusion, Brand Managers have no choice but to Digitize themselves or rather connect their Physical being with Digital and go Phygital. Its time to neutralize the ease of counterfeiting with irrefutable authentication and provenance, make each SKU visible right through to run the supply chain efficiently and effectively and in total let your package come alive and allow you to have a 1:1 direct relationship with the ultimate Boss – the Consumer.

[1] "Neil McElroy's Epiphany". P&G Changing the Face of Consumer Marketing. Harvard Business School. May 2, 2000. Retrieved March 9, 2011.

[2] Image from Cambridge University Press

[3] Twede, D., "Commercial amphoras: The earliest consumer packages?" Journal of Macromarketing, Vol. 22, No. 1, 2002, pp 98–108