Product Verification — Protecting Brands From Imitation

By Ben Ahrens Published on Jan. 09, 2023

With innovative tech in the digital space, bots and scammers will have no place. As bots and scammers attempt to take advantage of the online marketplace, companies are turning to new technologies to protect consumers and ensure that only authentic items can be bought or sold and that each transaction is legitimate. Buying retail confidently means implementing verification, where you won't have to think twice.

What is the authentication process?

The authentication process relies on a combination of biometric identification, analysis of product design elements, supplier audits, and sophisticated data analysis methods applied to the entire product lifecycle. This helps guard against counterfeiting, control the unauthorized distribution of products, and confidently guarantee authenticity. It also allows retailers to accurately track inventory levels while preventing over-stocking or under-stocking — a common pitfall of fast fashion.

Biometric identification's increasing role in authentication

In 2020, Amazon revolutionized the retail experience by introducing Amazon One — a biometric device allowing customers to pay at their stores using just the palm of their hand. Subsequently, major financial services companies like Mastercard began rolling out technologies beyond old methods, such as card swiping for payment security and customer experience enhancement. The application of biometrics in retail promises future advantages with personalized products and other uses yet to be explored.

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Established retailers are in a prime position to leverage biometric authentication for their customers, allowing them the convenience and peace of mind associated with protecting their data. Biometric technology has been widely accepted due to its user-friendliness. Through these programs, shoppers could utilize biometric scanning at checkout while enjoying loyalty benefits simultaneously — the ideal combination of efficiency and security.

As customers become more tech-savvy and digital technologies advance, retailers are quick to adopt new methods for consumers to shop safely. Recent years have seen biometrics emerge as a reliable solution in continuing the fight against fraud, making payment transactions more straightforward and providing an additional layer of security.

How is blockchain technology being incorporated?

Many luxury brands now use blockchain technology as part of their authentication process, creating a secure record of all transactions involving their products throughout their entire lifecycle. For example, Plug and Play-backed startup Brij is one use case in which they utilize custom QR code-activated digital experiences for their products. In particular for loss prevention and authentication for luggage and luxury goods to provide peace of mind for consumers that their interests are genuinely what they say they are.

blockchain authentication in high end sneaker collecting

Additionally, artificial intelligence, or AI, is being used by some companies to identify fraudulent activity that may have slipped through the cracks. AI algorithms look at data patterns from previous purchases to flag any suspicious behavior or inconsistencies that traditional methods may have overlooked. Taking a look at another startup within Plug and Play's ecosystem, YoFi is a platform that enables users to better understand their customers, their intentions, and the best way to interact with them. According to a recent study by cybersecurity firm CHEQ, around 35% of online Black Friday shoppers in 2021 were bots and fake accounts. As online commerce continues to expand and evolve, so too have malicious activities. Many remain undetected as they rapidly move from tickets for exclusive items to any merchandise they can profit from. Unintentional or intentional duplicate identities distort data which plays a significant role in assessing success metrics like inventory levels, marketing efforts, and customer loyalty — making digital identity verification key for businesses looking to stay competitive.

Retail authentication is causing a paradigm shift in the fashion industry

The shift from fast fashion to sustainable, slow fashion practices is a movement that has been gaining traction within the fashion industry in recent years. The fast fashion model, built on producing low-cost clothing and accessories quickly and in high volumes, has come under fire in recent years for its negative environmental and social impacts. Consumers are increasingly looking for clothing and accessories made using sustainable, ethical production practices, and retailers are starting to respond with more sustainable offerings. While the shift to sustainable fashion is still in its early stages, there are signs that it is gaining momentum. As consumers become more aware of the negative impacts of fast fashion, they are increasingly looking for alternatives, and retailers are starting to respond with more sustainable offerings.

Slow fashion also prioritizes quality over quantity, which means clothes are made to last longer. Some slow fashion principles include buying vintage, using natural fibers, and repairing clothes instead of throwing them away. Slow fashion is a more sustainable and ethical alternative to fast fashion, characterized by low prices, disposable clothing, and mass production.

One way to help cut back on fast fashion is by authenticating luxury goods through companies like Brij. This will ensure that only authentic items are sold, which will, in turn, reduce the number of counterfeits in the market. By doing this, consumers can be confident that they are buying a quality, authentic product, and not a cheap imitation. Hopefully, this can help reduce the demand for fast fashion, as consumers will be more likely to invest in high-quality pieces that will last longer.

How a lack of authentication is affecting brands today

dum dum lollipops to show what is authentications purpose

A clear example of how a lack of authenticating buyers affects businesses can be seen in a recent Bloomberg article about Dum Dums lollipops. Dum Dums have seen an influx of shady resellers on Amazon lately, with mysterious entities selling bulk orders at lower prices than the company's official listing. It's a sweet deal for some but a sour experience for many.

This is a classic example of price-arbitrage in action — taking advantage of Sam's Club's discounted 500-pack, which costs about $15, they can resell this product on Amazon for a dollar cheaper than the official price of $26, which only includes 400. It may appear strange for shoppers to receive boxes from Sam's Club instead of Amazon, but when they get 100 extra treats, they're less likely to report the shipment as fraudulent.

Dum Dums' parent company, Spangler Candy Co., has been a beloved family-owned company for years. Still, recently their products have popped up across Amazon so quickly that the business can no longer keep track. This issue costs them greatly in lost sales and legal fees every year; however, technology such as YoFi's authentication methods to confirm sellers and customers could help protect businesses from similar issues like this one.

The future of authentication for retailers

In short, businesses increasingly rely on cutting-edge technologies to protect customers from scammers and bots to ensure that every digital transaction involving retail items is authentic. By leveraging the power of AI and blockchain technology, companies can ensure that their users have access only to genuine products in the online marketplace.

NEXT: How Slow Fashion Brands Build a Greener Fashion Industry

In a world of constant change and adaptation, it's challenging to keep up with the latest trends — let alone ensure that you're getting what you paid for. There are new technologies that create a more secure marketplace for both buyers and sellers, and as authentication becomes more sophisticated, companies will be better able to protect consumers and ensure that only authentic items can be bought or sold. This will give customers peace of mind and increase confidence in the digital marketplace, leading to increased sales.