Many will be looking to the latest tech to support their January fitness kick, including the increasingly popular wearable technology, but with more and more fraudsters tapping into this lucrative market with their fake goods, how can consumers be sure they are getting the real deal? And how can brands be sure that their products aren’t the ones being imitated?
Each year, the latest developments in technology are unveiled to the world, including HDR (High dynamic range) TVs, drones and wearable technology - and this technology is set to get smarter and smarter. This year’s Consumer Electronics Show (CES) 2016 was a hotbed of the latest smart tech innovation, including a first glimpse of Fitbit’s new smartwatch, the Fitbit Blaze.
Whilst most consumers will wait patiently for these ‘must-have’ products to hit the High Street and online, some eager tech fans will inevitably want to get ahead of the crowd by getting their hands on them first. However, with market-leading fitness technology often coming at a premium cost, many consumers will try to track down cheaper alternatives online – but are these offers too good to be true? For example, despite the Fitbit Blaze only currently being available for presale, with the product due to hit global retail shelves in March 2016, online marketplaces such as TaoBao have already started selling them. This begs the question of whether this is the genuine product, or just an imitation.
The counterfeit consequence
According to NetNames’ Counting the Cost of Counterfeiting report, the sale of counterfeit goods in the UK goes up by more than 15% every year, and now costs around $1.8 trillion per annum. The massive growth of online and mobile shopping has played a key part is in this rise, with the statistics highlighting that there was a 15% increase in sales of counterfeit goods online last year.
This shift in buying behaviours is making it much easier for counterfeiters to target popular brands. By using sophisticated technology, fraudsters are now able to replicate a brand’s genuine website very quickly, making it easy to sell counterfeit goods to an unsuspecting public.
This represents a major risk for popular brands, not only in terms of lost sales, but also in terms of reputational damage. NetNames’ research found that as many as 78% of consumers would shun a brand if they found a fraudulent website imitating that of the genuine brand, even though the company itself was not negligent. With a good reputation and a loyal customer base hard won over time, a fraudulent attack of this nature could significantly impact a brand’s image.
Taking action against the fraudsters
There are a number of strategies that brands can adopt to mitigate the risk of being targeted by fraudsters online. These can include appointing a dedicated brand protection manager to raise awareness of these threats, both within the company and externally. Brands must also take centralised control over domain names to rapidly respond to cybersquatters, typosquatters, and rogue e-tailers.
Following ICANN’s (Internet Corporation for Assigned Names and Numbers) decision in 2012 to introduce new generic top-level domains (gTLDs), brands have been offered unprecedented opportunities to protect their intellectual property online. New gTLDs go beyond .com, .net, .org, which means that businesses can now use a ‘dot-anything’ domain extension to build their online presence, increase customer trust and set the brand apart from its competitors.
By developing and implementing a proactive gTLD strategy in this way, businesses can better engage with consumers and direct them to official brand channels. In addition, by adopting a dotBRAND domain name, companies will be able to manage their space on the internet by effectively controlling their own domain name registry and making it easier for customers to find them. By taking action in these areas before being targeted, brands can protect their reputation, customers, trademarks, and ultimately, their bottom-line.
Alongside these precautions, brands should also take steps to educate their customers about the massive number of counterfeit operations now operating online. Businesses can set up informative web pages where consumers are able to determine whether a product they have bought is fraudulent, and if so, allow them to report key information that will help to support an investigation, including the cost of the item and where it was purchased.
In addition to this, businesses should consider commissioning external experts that have the experience and advanced technological capabilities that are needed to advise on domain name strategies, monitor for any threats and rapidly enforce against infringements across all online channels. In order to address the problem on a larger scale, online retailers can also join forces with other brands and industry bodies to pool resources, influence and intelligence. New anti-counterfeiting technologies, including product identification and tracking, can then be shared as part of a multi-layered approach.
The increasing popularity of internet shopping, and the growing demand for ‘commerce anywhere’, has provided fraudsters with a fresh opportunity to target unsuspecting consumers with the sale of counterfeit goods. However, as anti-counterfeit technologies and strategies become more advanced, businesses are now much better able to combat this threat. By proactively forward-planning and thinking strategically, businesses can now protect their intellectual property, brand reputation and online customers much more effectively.
By Stuart Fuller, Director of Commercial Operations at NetNames