Supply Chain Archives

Enabling Product Authentication & Re-ordering by Consumers using Programmable QR Codes

Team o4s on August 31, 2022

The global perfume market opportunity is huge (USD 33.5 billion in 2021, expected to reach USD 47.6 billion by 2027) [1], and makes up about 10% of the overall cosmetics market (USD 380.2 billion). The traction owes itself to multiple factors: rising personal grooming trend “influenced” by social media; increasing demand for both youth-oriented, exotic perfumes, and product diversification by manufacturers trying to attract a larger consumer base. Aggressive advertising by brands adds fuel to the fire. The smoke from this fire attracts a lot of attention from counterfeiters, who want a piece of the pie for themselves.

In 2016, the cosmetics counterfeit market was valued at USD 5.4 billion which has since increased manifolds due to e-commerce trade exacerbated by the COVID-19 lockdown. According to L’Oréal, the consumption of beauty and personal care products, including fragrance and perfume, was strongly impacted by the closure of millions of points of sale (specialty stores, perfumeries, department stores, airport stores, etc.) [2]. This caused a supply shortage in the offline market, and “genuine” consumers turned to online marketplaces to fulfill their needs. These online marketplaces are full of fake cosmetics, and unsuspecting consumers fall prey in the absence of awareness and tools to authenticate products.

The problem becomes serious because the loss to consumers and businesses is not just monetary. Chemicals in fake perfumes have been proven to cause skin inflammation (best case) and liver cancer (worst case). These chemicals enter the body through the skin, where high levels of methanol (present in fake perfumes) convert to formalin which causes liver cancer, dizziness, headache, nausea, stomach pain, and vision problems. Direct contact with the eyes is even dangerous, causing blindness in a lot of cases. [3]

QR Codes To The Rescue

Necessity is the mother of invention, and this need has led many tech companies to come up with product authentication solutions, which are simple and cost-effective to implement, yet difficult to imitate. Unique and Programmable QR codes are one such technology, which not just helps consumers differentiate fake products from original ones but also helps engage consumers, educate them about the latest product offerings, and help them re-order products from legitimate channels. Every QR code has a unique ID and is programmable using cloud-based software. This QR code when scanned by a consumer using a smartphone camera or app, tells the consumer if the perfume is authentic. These QR codes can be applied to the product and packaging during manufacturing in a very cost-effective manner, without denting the margins of the manufacturer/brand. The authentication message on a website/app can be accompanied by additional multimedia for consumer awareness and a link to legitimate channels to re-purchase the product. Consumers can hence buy genuine items and keep verifying them at the time of purchase/delivery.

With competition in the industry increasing from both genuine and fake products, brands need to step up and help the consumers differentiate the genuine from the fake and keep them engaged. When engaged consumers are provided the option to buy products from authentic sources or tools to validate their purchases, then there are high chances of keeping them loyal and increase their lifetime value for the brand. Stiff competition and market dynamics will ensure that only brands that innovate and adopt solutions to solve this problem will thrive, and the rest would perish. Like always, the market will belong to those that go the extra mile to serve the interest of their consumers.

To know more about our Brand Protection Platform or watch it live in action, then schedule a meeting with our Solutions Expert here.

References

[1] (https://www.globenewswire.com/en/news-release/2022/05/03/2434555/28124/en/Global-Perfume-Market-2022-to-2027-Industry-Trends-Share-Size-Growth-Opportunity-and-Forecasts.html)

[2] (https://www.mordorintelligence.com/industry-reports/fragrance-and-perfume-market)

[3] https://www.nst.com.my/topic/lifestyle/2021/12/756556/counterfeit-perfume-ingredients-may-contain-health-hazards#:~:text=Chemicals%20in%20artificial%20perfumes%20have,skin%20and%20enter%20the%20body

Gaurav Bangar

Gaurav Bangar is a Director at O4S. He is passionate about customer experience & has been working with consumer brands for 10+ years advising them on issues at the intersection of business and technology (ERP, CRM, E-commerce, Analytics). Before O4S, Gaurav worked with Microsoft, SAP, and Deloitte.

Future of Brand Protection: Programmable QR codes with App-less Product Verification

Team o4s on August 8, 2022

Consumer brands often come across QR code-based Anticounterefiting solutions that market themselves as the best go-to product authentication platform at minimal pricing. The marketing is so good that more often than usual, brands fall into their trap. This is a fact! This has happened with some of the high-end brands who fell for lucrative offers but were smart enough to distinguish the difference and become our delighted customers.

Fundamentals of QR codes & Relevance in Brand Protection:

Before going in-depth, let’s understand the fundamentals of QR codes, how they work and what are their actual potential. To simply put, QR codes are 2D Matrix barcodes that unlike barcodes have the capability to capture an array of information (It’s actually much more than you can imagine), they can be programmed to perform multiple sets of activities and deployed for various applications, the only thing required is to the capability to visualize and of course technology to create it.

Based on their functionalities, there are four types of QR codes available, Static, Dynamic, Serialized, and Secure. Static QR codes have fixed URLs and cannot be altered once printed while the Dynamic version allows the flexibility of changing URLs at any point in time. The other two types are highly secure, replication resistant, and specifically designed to address counterfeiting issues. The only difference among them is that serialized QR codes can be programmed to perform a variety of application which can be further utilized to offer visibility at every node of the supply chain than just anticounterfeiting action.

Unique Programmable & Next-Gen Tech Empowered QR Codes

The product counterfeiting business has grown at a rapid pace to become a trillion-dollar industry. Brands are increasingly becoming concerned about their revenues as well as consumers’ experience with substandard counterfeits. As it is unlikely that they will ever purchase the product again. To deal with the challenge, O4S has designed and developed programmable QR codes which are empowered by next-gen technologies such as the Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML) to make advancements in the field of track, trace and counterfeit identification systems.

Next-gen Technologies deployed to ensure Seamless Brand Protection

O4S’ QR codes have unique identification codes embedded within them and placed over product packaging (in form of a label or etched via laser printer) that facilitate product authentication and efficient consumer engagements. These unique identifiers are usually placed on either primary, secondary or tertiary packaging of products, mostly depending on the nature of packaging and companies’ preferences. End users can authenticate their purchases by scanning the codes at any stage of the retail chain via an app-less platform. The app-less feature is very much appreciated by consumers as it saves a lot of their mobile phone storage space.

O4S’ Technology utilizes a combination of Dynamic + Serialized (Unique) QR codes to help Consumer Brands Tackle Counterfeiting & Build Consumer Trust.

Our QR codes are highly secure with the best technologies running at the back-end. O4S system appends each scan with the information specified by brands usually the phone number, location, and identity of the person scanning the product. The analytics engine uses algorithms to identify the probability of a scan being counterfeit thereby and flagging them. The brand can then get in contact with the person scanning them to identify where the product was bought from and thereby the source of the counterfeit. Watch the video to learn more.

The absence of tools to distinguish between an original and a fake product is the primary factor contributing to rise in counterfeiting activities globally.

Brands are often unsure about consumers’ likeliness to scan and verify products. However, Research suggests that up to 30% of consumers scan a QR code available on the packaging which can be even higher depending on the use case, especially in the case of loyalty programs, rewards, and e-warranty registration. This level of adaptability can be contributed to the ease of use, convenience, and app-less feature.

Our strength lies in empowering consumers to authenticate their purchases and protect the brand against counterfeiting while bringing all stakeholders on a single platform to reduce warranty expenditures, improve product quality, and enhance customer experience. Furthermore, advanced analytics tools offer detailed insights on consumption trends, along with the loyalty program’s effectiveness.

In short, we are capable of programming QR codes to conduct e-warranty registrations, consumer engagements, product verification, and offer advanced analytics to derive actionable insights from the real-time information recorded in the backend.

Three More Reasons To Include O4S Secure QR code on Product Packaging:

Make Product Smart: Serializing each product with a dynamic QR code helps digitize the product and track its movement at a unit level. The data-driven approach enables brands to connect and associate data sources to realize inefficiencies, enhance product quality, and customer engagement. Moreover, it becomes difficult for counterfeiters to introduce fake products into the supply chain and eventually the consumers’ basket.
Keep Feedback Loop Open: Consumers often find it difficult to reach out to the brand to share their experiences which creates a gap in understanding consumer perspective. Reports suggest that 95% of consumers will talk about a negative experience than write a positive review. Using our platform, brands can continuously improve and enhance their products/offerings based on consumer suggestions, reviews, and opinions. We allow consumers to verify their purchases, understand the product journey, and raise a flag on a susceptible counterfeit.
Flexibility & Scalability: A pre-printed label with a serialized dynamic QR code offers the flexibility to make instant changes to the destination of the URL which means brands can keep customizing the landing pages to include more features, communication, and even engage the visitor in numerous activities while keeping them imitation resistant.

To know more about our Brand Protection Platform or watch it live in action, then schedule a meeting with our Solutions Expert here.

How a Combination of Digital & Physical Anti-counterfeiting Solution can be a Game Changer!

Team o4s on August 8, 2022

The unprecedented and unexpected rise of technology over the past few years has had a massive impact across industries. While incorporating newer methods has its own set of challenges, the change that has been brought about by the technology has had far-reaching effects. The biggest impact has been on the consumer mindset and expectations in terms of service. Innovative companies that are re-inventing the supply chain have changed the game for every company in every industry with the consumer expecting more than ever thought possible.

The inability to deliver on any front will immediately lead to customer dissatisfaction followed by a beating that the brand takes across social media. While the changing customer experience could be an evident change that companies are able to identify, it is just the tip of the iceberg.

By combining physical and digital, organizations can open doors for incredible opportunities.

It should be hardly surprising that several aspects of the business are undergoing rapid changes, but one key department that keeps everything running smoothly is the supply chain. Industry 4.0 and Internet 3.0 have changed the supply chain from a purely operational function to an independent function that can impact the fundamental survival of the organization. By combining the digital and physical aspects of the supply chain, organizations have the opportunity to leverage the most innovative technologies and transform their supply chain completely.

What does this integration mean?

Organizations across the globe today use holograms or QR codes as a mechanism to prevent counterfeiting and empower the end-user to be able to identify the fakes. What if the same technology could be used to integrate traditional overt anti-counterfeiting techniques with new-age digital technologies and help you create an entire ecosystem? The cost of implementation would be negligible when compared with the endless possibilities. What exactly would be the digital supply chain? Well, the digital supply chain will leverage the physical technology already used by the organization to create an eco-system that is always online. Using data points that are inserted on the QR code or hologram, a network can be created with a live supply chain giving real-time data of all the products enabling analysis at every step of the process. So, in essence, it simply means using the physical aspects of the supply chain to create a complete digital eco-system.

Why is it the Game ChangeFuture of Supply Chain?

This question can answer itself if we look at only a few possibilities that arise when organizations start using digital and physical methods for improving their supply chains.

Complete Visibility - Using the datapoints embedded on the QR code or Holograms, organizations can track every product, every minute, and at every location. This helps in optimizing the supply chain to eliminate the inefficiencies across the supply chain. Complete visibility across the supply chain will help in improving product life cycle tracking, measuring value loss analytics, compliance tracking, product movement monitoring, and reporting, etc. The increased visibility significantly reduces the chances of disruption. End-to-end visibility of your supply chain gives the organization a 360-degree view of their supply chain.
Predictive Analytics - Organisations can track every single product that reaches the end-user at any given point in time. Organizations can get real-time data of stocks at each of the distributors and retailers, along with the sales data of each stakeholder. This gives the organizations enough data over a period of time for implementing artificial intelligence and machine learning to predict demand. This predictive analysis enables the organization to undertake decisions that helps the supply chain stay a step ahead of the competition (moving from a backward-looking approach to forward-looking approach). Until now, the shipment is released when the retailer or distributor runs out of supply or is about to run out of supply. Using predictive analysis, the product will reach every node in the supply chain just before the demand is generated.
Customer Engagement - Today, the greatest distinction brands can create is through sustained customer engagement. With attention spans getting shorter, organizations need to innovate to keep their customers engaged. Using the physical QR codes and combining it with digital technology, a new eco-system can be created. Brands can deliver targeted messages to customers based on their past purchase history. So, when a customer scans a QR code to get the information of the product, a targeted campaign can be delivered to the customer. Brands can also offer loyalty programs to customers to improve customer engagement. Basic features such as product information, e-warranty, additional information, etc. can be shared with the customer using the integrated solution.
Improved Efficiency - The combination of physical and digital anti-counterfeiting solutions will drastically improve the efficiency of the supply chain. Without making any significant changes to the current manufacturing process, brands can incorporate the latest technologies such as blockchain or machine learning in the supply chain. It also prepares the organization for the future by making the it more robust and open to changes. As per a PwC study, companies with a highly digitized supply chain can expect an efficiency gain of 4.1 percent. At the same time, the boost in revenue due to an efficient supply chain is anticipated to be around 2.9 percent.
Customer Experience - Since we started our discussion with changing customer expectations, let’s shed some light on the positive customer experience that can be delivered using this combination. The end-user can scan the QR code using a mobile camera, and verify if the product is authentic. While this instils confidence in the customer, it also empowers companies to battle counterfeit products. Using this combination delivers a message to the customer that the brand thinks for them, and they are valuable. This helps brands build a long-lasting relationship with the customers transforming them from customer to brand ambassador.

As the competition gets fiercer, brands who are a step ahead will survive. The rigid ones not ready to accept the changing technological landscape may end up being side-lined and forgotten. It is vital for organizations to leverage the latest technologies with the existing framework to develop an end-to-end visible supply chain and develop an edge over the competition.

Get in touch with us to know more about the possibilities for your brand.

Four Must-Have Brand Pillars for Building Unmatched Consumer Loyalty

Team o4s on August 8, 2022

For consumer brands, Customer Loyalty increases market share by bringing new customers through word-of-mouth publicity and drives repeat purchases by existing customers. This helps brands organically scale and drive higher revenue and LTV. Four essential pillars of customer loyalty are a great product, a deep relationship, transparency, and security. While building customer loyalty requires an investment of time and money, more and more brands are leveraging technology to erect these four pillars of customer loyalty quickly and cost-effectively. Early adopters of technology experience exponential returns on their investments, and laggards face the risk of being obliterated.

The Four PILLARS of Customer Loyalty

When it comes to customer loyalty, this quote by Elbert Hubbard summarises it well:

“An ounce of loyalty is worth a pound of cleverness.”

The reality of your brand is how customers perceive you. And if your customers become loyal to your brand due to the trust it inspires, they don’t just come back to buy from you again or simply recommend you to others; they insist that their friends do business with you. Loyal customers also spend 67% more than new customers [1]. Bottom line: Customer loyalty can directly impact your company’s success, as retaining customers is not just less expensive; it also results in more sales.

But customer loyalty is not ONE thing. Customer loyalty is a result of building many different “pillars” that lay the foundation of your brand. While you need to get many things right, the most crucial is a great product, a deep relationship, transparency about all aspects of the development, and confidence throughout the buying and consumption process.

Make a Great Product - The first step to gaining customer loyalty is creating a great product. This comes from years of market research and deep insights into customer needs. Deep insights lead to empathy, which helps you create products that solve the requirement and are easy to use and enjoyable for your customers. This is the first and the most crucial step in building a loyal customer base.
Develop a Deep Relationship - Without a doubt, the essential elements of any good relationship are making a connection by displaying your empathy for customer needs, being reachable to customers throughout their buying and consumption journey, and being open to and acting on customer feedback. Listening to customer feedback also feeds into the loop of developing great products as per evolving customer needs and aspirations. 75% of consumers expect brands to contribute more to their well-being and quality of life.[2]
Be Transparent - Customers today demand transparency that goes beyond your website, annual reports, or product labels. Brands are expected to provide information about sustainable supply chain practices and how they give back to the community they operate in. Brands which are meaningful and viewed as making the world a better place outperform the stock market by 134%. [3]
Confidence in buying Genuine Products - A secure environment builds confidence. The most critical aspect of security is the guarantee of the product's authenticity and assurance of its quality. It's getting increasingly difficult for consumers to tell the difference between an original product and its counterfeit. 70% of consumers who bought a fake product did so without knowing the item was affected at the time of purchase—[4]. Most consumers are also unaware of mechanisms they can use to contact the brand and report spurious products. While it is easy to look the other way, the responsibility for ensuring that customers get authentic products and have a means of validating them lies on the brand, even more so now that tech-enabled solutions have made it reasonably easy to provide such tools in the hand of consumers. Customers have multiple touch points during your product's entire buying and consumption journey and leave much digital footprint over multiple systems you own and control. While 87% of Americans are willing to have various details of their activity tracked in exchange for more personalised rewards and brand experiences [5], there is a lot of concern around data being misused and privacy being breached. 56% of US consumers are NOT confident that brands have their best interests when they use, share, or store their personal data. [6]

Current (ineffective) approaches to building Customer Loyalty

More often than not, business leaders understand their customers well and know how to make great products. They also know how to touch a nerve in their communication and advertising to get customers to try their products. However, brands face challenges in developing deep relationships by listening and responding to feedback, bringing more transparency about their practices, and taking measures to make their customers feel more secure. This is easier for B2B companies since they have limited customers and high margins, budgets and tools at their disposal to cater to these needs. Consumer brands have hundreds of thousands or millions of customers, and building internal capability to do this cost-effectively at scale becomes a challenge.

To build deep relationships, brands are experimenting with new technologies like chatbots on popular messaging platforms, social media, etc., to provide a channel for their consumers to voice out their feelings and provide feedback, but the journey is often broken. Multiple channels are confusing to customers and brands alike. While standards like GS1 set out guidelines to provide more transparency about products and practices to consumers, it is often limited to the information printed on the labels (usually mandated by law). Product authentication mechanisms are typically absent or easily copied by adept counterfeiters. Redressal mechanisms for counterfeit products are limited to writing an email to a dedicated address without much visibility into concrete actions.

Leveraging Technology to build Customer Loyalty

This is where tech companies like O4S come in and help brands effectively solve these problems. O4S provides a SaaS platform that can help brands connect directly with their consumers through:

Smart Packaging to complement a great product
Direct engagement to develop deep relationships
Provenance to provide transparency
Product authentication mechanisms to build confidence

These are some of the measures that make customers feel secure and build trust in the brand. Each product is provided with a randomised Unique ID for every unit in the form of a Programmable Dynamic QR code. This Dynamic QR code is either pasted on the product (and its packaging) or printed during manufacturing. QR codes are programmed (in batches) to contain important information (manufacturing details, sustainable sourcing certificates, sales channels, etc.) to promote traceability at the desired levels. Once in the hands of the customers, these QR codes can be easily scanned using any smartphone camera (or QR code reader applications) and can provide the necessary traceability, along with options to re-order the product through legitimate channels, reach out to the brand for any grievance, and authenticate the product at the time of purchase (or delivery). Printing or applying QR codes is also more cost-effective than some of the other popular product authentication mechanisms available today in the market.

Brands can get up and running with this technology within a matter of few weeks, and see results in months instead of years. Brands can collect feedback “in the moment” of purchase, use it to understand customer needs better and implement it in the product development lifecycle. Brands can provide more visibility into their sustainable practices and show consumers how they positively impact the ecosystem in which they operate, which customers deeply care about. Once the customer can verify that the product is Authentic, coming to them from a legitimate channel, and won’t harm them (or the ones they love) in any way, they feel secure and trust the brand.

All of this contributes to customers becoming loyal proponents of the brand. And if your customers become loyal to your brand due to the trust it inspires, they don’t just come back to buy from you again or simply recommend you to others; they insist that their friends do business with you.

You can write to us at hello@o4s.io or submit your details here to know more.

Author

References

[1]:https://www.business.com/articles/returning-customers-spend-67-more-than-new-customers-keep-your-customers-coming-back-with-a-recurring-revenue-sales-model/)

[2]:https://www.havasgroup.com/press_release/meaningful-brands-2017-reap-greater-financial-rewards-as-they-outperform-the-stock-market-by-206/

[3]:https://havasmediagroup.com/building-meaningful-is-good-for-business-77-of-consumers-buy-brands-who-share-their-values/

[4]:https://www.researchgate.net/publication/335161367_Understanding_experienced_consumers_towards_repeat_purchase_of_counterfeit_products_The_mediating_effect_of_attitude

[5]:https://cdn2.hubspot.net/hubfs/352767/Loyalty%20Report%202018%20Files/Bond_TheLoyaltyReport%202018%20US_Exec%20Summary.pdf

[6]:https://www.acquia.com/newsroom/press-releases/once-they-commit-us-consumers-are-loyal-life-says-acquia-survey

Impact of COVID-19 on Supply Chains

O4S on April 9, 2020

None of the industries across the globe have been spared from the devastating impact of COVID-19. The entire world is experiencing lockdown with schools, offices, shopping malls, and manufacturing units, among others getting shut down. This event has deeply affected our daily lives and supply chains that were helping companies to ensure timely deliveries of both essential and non-essential items. While the global leaders struggle to make decisions regarding the containment of the COVID-19, supply chain leaders need to assess the impact such disruptions can have on the global supply chains.

With the pandemic creating havoc across the globe, more and more companies have been forced to throttle down or temporarily shut manufacturing and assembly unit. In order to reduce Supply chain costs, companies are having to pursue strategies such as lean manufacturing, offshoring, and outsourcing. With further globalization and integration of Supply Chains, risks such as this have far-reaching consequences. There needs to be a shift in the mindset to take into account risk management and ensuring business continuity. Companies need to be able to monitor all aspects of their Supply chain right from manufacturing until the product reaches the hands of a consumer, this would help them get the complete picture. In times of crisis, they are able to prioritize efforts to tackle the challenges, assessing customer needs, inventory availability within the reach of logistical hubs among few.

Amid the COVID-19 pandemic, a business opportunity for predatory criminals looking for fast cash has spiked up. With the high demand for personal protection and hygienic product across the world these criminals have started producing counterfeit products which play with the lives of people in these trying times. Authorities around the world seized nearly thousands of counterfeit surgical masks, sub-standard hand sanitizers, unauthorized antiviral medication making them the most commonly sold medical product online. On one hand, consumers are becoming victims of this racket because there is no provision to validate the purchase on the other hand Companies with low visibility of their product movement across the supply chain do not have 360-degree control over their chain. At this time, when governments across the globe are advising people to use sanitizers to avoid contamination. Many cases of selling fake sanitizers have come up and we need to be worried about it. We cannot be sure if the food items that we are purchasing are even original, which has its own repercussions.

The current outbreak offers valuable lessons for companies worldwide, and particularly Indian companies that focus on short term profits with lean supply chain strategies, contributing to supply chain vulnerability. The whole COVID-19 situation would be an eye-opener for decision-makers to reconsider the existing supply chain structure and design them based on new performance measures such as resilience, receptiveness, and reconfigurability. Experts suggest an ideal way to tackle the current situation and avoid future business disruptions is Digital Transformation. Not only corporates, even companies that belong to the machinery field such as metallurgy, mining, oil and gas need to consider converting their existing traditional approach into tech-enabled processes.

O4S on February 27, 2020

Liquor or alcohol is considered as a sunrise product with its demand and production rising at substantial rates. It is estimated that the consumption of alcohol has increased by 70% between 1990 to 2017. People across the globe consumed 35,676 million litres of liquor per year in 2017, a number which was only 20,999 million litres per year in 1990. As per a recent study conducted to analyze the trends in alcohol consumption in 189 countries, it is estimated that the consumption of alcohol will continue to rise in the next 5–10 years.

One of the surprising revelations of the study threw light on the fact that consumption of liquor was reducing across Eastern Europe, but has been increasing in middle-income countries such as India, China, and Vietnam, among others. The per capita alcohol consumption reduced in Europe from 11.2 litres to 9.8 litres between 2010 to 2017, while during the same period it grew from 3.5 litres to 4.7 litres across Southeast Asia.

The story in India has not been any different with 8.9% annual increase in the consumption of liquor in the last six years. India is the third-largest liquor market with an estimated worth of 1.46 Trillion Rupees. The growth in social drinking and expanding middle class are a few of the top reason for the increase in consumption of liquor in India. However, with the rise of liquor consumption, there has been a significant increase in the production and sale of counterfeit liquor.

Counterfeiting in the liquor industry

The fraud in the liquor industry can vary vastly in the severity ranging from dilution of premium gin, vodka, or tequila with water to substituting the original product with cheaper alternatives including dangerous substitutes such as methanol or rubbing alcohol. The liquor industry’s problems with counterfeiting do not stop at a financial or brand-equity loss but can result in severe repercussion leading to loss of lives.

Some of the major fake liquor tragedies of recent times were loss of 32 lives in 2015, 40 in 2013, and hundreds of victims in 2011 in West Bengal. The loss of life can lead to a massive impact on the brands too, as was seen in 2018. Vat 69 and Smirnoff were banned from selling in the National Capital for two years due to the company’s alleged usage of duplicate barcodes which could be misused.

The existing liquor taxes and ‘sin taxes’ imposed on liquor lead to a rise in price and are considered motivation for counterfeiting. High prices are also considered motivation for the buyers to purchase cheaper substitutes knowing that it could be dangerous for their health. However, against the common belief, most buyers are not aware that they are purchasing counterfeit alcohol.

A Global Phenomenon

Counterfeiting in the liquor industry is not just an Indian problem, but a global catastrophe. As per a study published by the International Alliance for Responsible Drinking, 28% of total liquor in Brazil, 34% in Mexico, and 66% in Mozambique was counterfeit. In 2013, Russia sold 9.9 million more bottles of Whiskey than officially imported. It is also estimated that 30%-50% of total alcohol sales in Russia is that of illicit vodka.

Fake bottles have also been found to be manufactured and used in many parts of the world, indicating that counterfeiters may even have industrial-scale capabilities. The problem of fake wine has been rampant in China, with estimates hinting that close to 2 million fake bottles were being manufactured annually in China. In the UK, 50 million litres of counterfeit alcohol have been seized in a single year by HM Revenue and Customs (HMRC). Financial losses in the UK are estimated at around £218 million a year due to the sale of fake liquors.

Counterfeiting of liquor has also claimed many lives on a global scale. A simple search of ‘death from counterfeit alcohol’ throws up several reports with an alarming number of fatalities. Fake alcohol has claimed 140 lives in Indonesia, 72 in Siberia, 100 in Libya, 60 in Iran, and across most countries in the world. With such a massive problem, stakeholders across the world are working on and trying to find a solution to combating this menace.

Next-Gen Solutions

With counterfeiters becoming tech-savvy and even setting up manufacturing plants as we saw in the case of Russia, it is time for organisations to look towards upcoming technologies to solve one of the oldest and dreaded problems of the liquor industry. Tech-based solutions certainly have the potential to become the saviour the industry needs!

The first step should be to secure the supply chain by serializing every liquor bottle that leave the factory. This can be done by simply embedding a QR code containing multiple sets of information on the product packaging which can then be used to track the product during its entire journey in the supply chain. This QR codes can then also be utilised by the end consumers to authenticate their purchase.

The QR code allows your organization to closely track the inventory. Thus, enabling you to optimize it to maintain optimum stocks across distributors and retailers. This information will also empower your organization to garner a greater understanding of its distribution network. Using these QR codes is simple and scalable with minimal addition to costs. The costs are negligible compared to the revenue losses due to the sale of counterfeits.

The same solutions that are used for preventing the sale of counterfeit liquor and securing your organization’s supply chain can also be used to create an ecosystem beyond the bottles. These can be used by the marketing function of your organization to turn your products into platforms and interact with your customers like never before. This opens new opportunities for customer engagement and delivering a better consumer experience.

Conclusion

The problem of counterfeiting in the liquor industry is equally alarming as in any industry. Repercussions being beyond just usual loss in revenues. Fake liquor reaching the end-user will not only put the consumers’ lives in jeopardy but will also have an irreparable impact on the brand. The solution lies in a 360-degree approach with all the stakeholders including the government and the consumers working together to fight counterfeiting. Using next-gen technological solutions and ensuring consumer awareness are the fundamental steps that can address the grave issue of counterfeiting in the liquor industry.

How a Combination of Digital & Physical Anticounterfeiting Solution can be a Game Changer?

O4S on February 17, 2020

By combining physical and digital, organizations can open doors for incredible opportunities.

What does this integration mean?

Why is it the Game ChangeFuture of Supply Chain?

This question can answer itself if we look at only a few possibilities that arise when organizations start using digital and physical methods for improving their supply chains.

Complete Visibility - Using the datapoints embedded on the QR code or Holograms, organizations can track every product, every minute, and at every location. This helps in optimizing the supply chain to eliminate the inefficiencies across the supply chain. Complete visibility across the supply chain will help in improving product life cycle tracking, measuring value loss analytics, compliance tracking, product movement monitoring, and reporting, etc. The increased visibility significantly reduces the chances of disruption. End-to-end visibility of your supply chain gives the organization a 360-degree view of their supply chain.
Predictive Analytics - Organisations can track every single product that reaches the end-user at any given point in time. Organizations can get real-time data of stocks at each of the distributors and retailers, along with the sales data of each stakeholder. This gives the organizations enough data over a period of time for implementing artificial intelligence and machine learning to predict demand. This predictive analysis enables the organization to undertake decisions that helps the supply chain stay a step ahead of the competition (moving from a backward-looking approach to forward-looking approach). Until now, the shipment is released when the retailer or distributor runs out of supply or is about to run out of supply. Using predictive analysis, the product will reach every node in the supply chain just before the demand is generated.
Customer Engagement - Today, the greatest distinction brands can create is through sustained customer engagement. With attention spans getting shorter, organizations need to innovate to keep their customers engaged. Using the physical QR codes and combining it with digital technology, a new eco-system can be created. Brands can deliver targeted messages to customers based on their past purchase history. So, when a customer scans a QR code to get the information of the product, a targeted campaign can be delivered to the customer. Brands can also offer loyalty programs to customers to improve customer engagement. Basic features such as product information, e-warranty, additional information, etc. can be shared with the customer using the integrated solution.
Improved Efficiency - The combination of physical and digital anti-counterfeiting solutions will drastically improve the efficiency of the supply chain. Without making any significant changes to the current manufacturing process, brands can incorporate the latest technologies such as blockchain or machine learning in the supply chain. It also prepares the organization for the future by making the it more robust and open to changes. As per a PwC study, companies with a highly digitized supply chain can expect an efficiency gain of 4.1 percent. At the same time, the boost in revenue due to an efficient supply chain is anticipated to be around 2.9 percent.
Customer Experience - Since we started our discussion with changing customer expectations, let’s shed some light on the positive customer experience that can be delivered using this combination. The end-user can scan the QR code using a mobile camera, and verify if the product is authentic. While this instils confidence in the customer, it also empowers companies to battle counterfeit products. Using this combination delivers a message to the customer that the brand thinks for them, and they are valuable. This helps brands build a long-lasting relationship with the customers transforming them from customer to brand ambassador.

Get in touch with us to know more about the possibilities for your brand.

How Companies Benefit from Blockchain

O4S on February 11, 2020

The supply chain today comprises a series of decision-making processes that are largely taken in discrete siloes within different departments such as marketing, product development, manufacturing, and distribution, and finally into the hands of the customer. Digitization has the potential to bring down these walls, thus helping the chain to become one completely integrated ecosystem transparent to all the players involved.

Companies have started to realize the core business value of traceability and Supply Chain visibility, which in turn would help them increase efficiency and cost savings targets. However, first they need to overcome the mistrust which are generally associated with product identity and traceability. Blockchain, which is a type of distributed ledger technology, has increasingly gained market traction in supply chains for several isolated used cases such as product provenance and track ad trace of products across the supply chain. When implemented effectively, blockchain can connect and enable increased business efficiency, higher transparency, and enforce accountability among the participating nodes. With better and more reliable data business decisions can be optimized. Across industries, there has been a growing number of pilot projects where use of blockchain technology has successfully helped in streamlining supply chain transactions through the provision of visibility and reliability of transaction information.

It is the transactional transparency, tamper- evidence, along with trust which blockchain provides which can help take the entire supply chain management a step further.

Companies are faced with significant challenges while digitizing their supply chains such as:

Coordination of the process with digital transformation across multiple and often disconnected supply chain partners
Lack of connectivity
Data reconciliation processes is heavy on Cost Incurred
Ineffective solutions for handling large amounts of inconsistent data.

While other technological options are there which help manage supply chains, with blockchain, different parties that necessarily do not have a trusted relationships with each other can communicate on the same platform. What blockchain does is that it stores every transaction or exchange of data that occurs in the network, this potentially reduces the need for third parties as all parties in the network now can access and share same data, in a chronological order. Blockchain helps eliminate a costly and complex effort towards data reconciliation which is a prerequisite for most systems today.

Blockchain alone does not solve the human challenges or the need for digital transformation, however when implemented effectively it can act as a powerful tool to encourage new ways of working, increasing accountability and trust. Additionally blockchain has a few more value additions to the existing system, which may include:

1. Substantial gains in efficiency and a reduction in manual processes which are needed for cross- party data reconciliation.

2. Increase in product provenance and consumer confidence for quality, societal, and environmental impacts.

3. Deeper market penetration and easier new product/markets development.

4. Reduced risk of the proliferation of counterfeit products and risk mitigation from lower-quality components.

5. By Leveraging innovation Brands can increase efficiency and eventually work towards change management

When considering the feasibility of blockchain for a specified use case, various costs and trade-offs should be considered. Further, supply chains in different stages might be more suitable and feasible for leveraging blockchain than others.

How Hazardous can Counterfeiting be in the Automotive Industry?

O4S on December 10, 2019

When was the last time you were allured to buy an expensive watch of Rado available at a lower price? Did you give a second thought as to why the said brand is offering something at such a low price, or you simply gave into your desire of owning a Rado irrespective of whether it is a genuine product or a counterfeit one? Well, the problem of counterfeit products goes far beyond everyday FMCG goods. It even impacts crucial industries such as pharmaceutical and automotive, where fake products can have fatal ramifications.

The Counterfeit Menace

Counterfeits can be defined as products that are fraudulently imitated to take advantage of the superior value of the original product. Counterfeiting in lay man’s term is known as ‘fake products’ or unauthorized replicas of the real product. Counterfeiters manufacture and distribute substandard products under the original brand’s name. It is illegal and by purchasing these goods, consumers in a way support these activities.

In India, the counterfeit market alone causes massive tax losses of INR 40,000 crore and the entire market is estimated to be valued at INR 1 lakh crore. Counterfeiting is so rampant in India that in Kerala these goods are sold as ‘gulf imports.’ Counterfeiting exists due to consumer demand for cheaper alternatives and huge discounts.

In terms of looks, these fake products closely resemble the original ones. The only differentiating factor between them is the price. These goods are priced quite low which compel consumers to fall prey to such products. Counterfeiters thrive on the aspiration of a consumer wanting to own a high-end brand.

Counterfeiting is also vastly seen in the pharmaceutical industry, wherein the counterfeit medicines with the same brand name and packaging but not manufactured by the original manufacturer are sold as real products. This could prove fatal for the patient if they consume these drugs which may not yield desired results. The same disastrous effects of counterfeiting are also witnessed in the automobile industry.

Problems in the Automobile Industry

The automobile industry in India is one of the fastest-growing sectors. In fact, it is often known as the indicator of economic growth and development. As more middle-income consumers aspire to buy vehicles, the automobile sales and the auto parts after-market segment have seen overwhelming growth until recently.

The automotive industry in India has been a major victim of counterfeiting. According to sources, the counterfeit auto parts industry is valued at a whopping INR 22,000 crore. Such a massive scale of counterfeiting has a direct and severe impact on the Original Equipment Manufacturers (OEMs). Counterfeiting is dangerous in the automotive industry as it risks the lives of the passengers.

According to a FICCI-Cascade report, nearly 20% of the road accidents occur due to the presence of these poor-quality spurious spare parts in the vehicle. Let us look at some of the most commonly found counterfeit products in the vehicles:

Brake Pads - Fake brake pads made out of compressed grass and sawdust have been detected. This reduces the braking ability as these fake ones disintegrate under pressure.
Airbags - Airbags that are meant to save the lives of the passengers in the vehicle during a collision have been found to be counterfeited. The fakes ones, unlike the original ones, do not meet the required specifications and are not appropriate to save lives.
Engine - Counterfeit engines do not deliver optimum performance and also pose a fire hazard. Fake filters also lead to excessive pollution.

Wheels, steering, electrical components, and even body parts are counterfeited to be sold at cheaper prices compromising the safety of the passengers. Using counterfeited auto parts can drastically impact the performance of the vehicle. There is a drop in the engine power, especially when accelerating heavily which heats the plugs and cause them to melt leading to engine damage. These counterfeit parts are neither approved by safety authorities nor are tested for safety making them a huge safety hazard.

The source of these counterfeit auto parts exists not only in India but also in China which is a major manufacturer of these spurious products. So, while OEMs produce the auto parts using state of the art technology and premium quality raw materials to ensure safety, counterfeit products are made with the sole intention to make more money. Poor checking, lax regulatory frameworks, and inadequate intellectual property protection add to the misery.

Counterfeit products not only impact the consumer or the company in terms of finances, but it also tarnishes the brand image of the original manufacturers. The customer who purchases a product assuming it to be an original product is bound to be left dissatisfied with the performance of the counterfeit products. Automobile brands end up losing the brand equity that is built over the decades.

Problems in the Automobile Industry

Counterfeiting can be prevented only with collective action by car manufacturers, government agencies, and consumers. The concerned government agencies also need to devise strict laws that punish those involved in counterfeiting. A more vigilant agency dedicated to preventing counterfeiting and better coordination between agencies will be essential. Additionally, consumer awareness will also play a key role in ensuring that the end-user in the supply chain detects and avoid counterfeit purchases.

Car manufacturers who already conduct raids should increase the frequency of such raids to detect fake products stocked by the wholesalers and traders. The industry needs to work collectively and not make this about protecting their own brand image. Additionally, companies should consider using advanced technologies that allow them to monitor their products across the entire supply chain.

At O4S, our product tracking solutions will help you secure the entire supply chain from your manufacturing plant right up to the retailers. Your consumers can also scan the QR code on the product to ascertain the authenticity of the product. Reach out to us to know more about customized solutions available for your brand.

Mark

Supplytics

Gynger

Original4Sure

O4S Insights

In News

Fast Moving Consumer Goods

Pharmaceuticals

Agriculture

Consumer Electronics & Durables

QR Codes To The Rescue

To know more about our Brand Protection Platform or watch it live in action, then schedule a meeting with our Solutions Expert here.

Gaurav Bangar

Fundamentals of QR codes & Relevance in Brand Protection:

Unique Programmable & Next-Gen Tech Empowered QR Codes

Next-gen Technologies deployed to ensure Seamless Brand Protection

O4S’ Technology utilizes a combination of Dynamic + Serialized (Unique) QR codes to help Consumer Brands Tackle Counterfeiting & Build Consumer Trust.

The absence of tools to distinguish between an original and a fake product is the primary factor contributing to rise in counterfeiting activities globally.

Three More Reasons To Include O4S Secure QR code on Product Packaging:

To know more about our Brand Protection Platform or watch it live in action, then schedule a meeting with our Solutions Expert here.

By combining physical and digital, organizations can open doors for incredible opportunities.

What does this integration mean?

Why is it the Game ChangeFuture of Supply Chain?

Get in touch with us to know more about the possibilities for your brand.

The Four PILLARS of Customer Loyalty

Current (ineffective) approaches to building Customer Loyalty

Leveraging Technology to build Customer Loyalty

You can write to us at hello@o4s.io or submit your details here to know more.

Author

References

[1]:https://www.business.com/articles/returning-customers-spend-67-more-than-new-customers-keep-your-customers-coming-back-with-a-recurring-revenue-sales-model/)

[2]:https://www.havasgroup.com/press_release/meaningful-brands-2017-reap-greater-financial-rewards-as-they-outperform-the-stock-market-by-206/

[3]:https://havasmediagroup.com/building-meaningful-is-good-for-business-77-of-consumers-buy-brands-who-share-their-values/

[4]:https://www.researchgate.net/publication/335161367_Understanding_experienced_consumers_towards_repeat_purchase_of_counterfeit_products_The_mediating_effect_of_attitude

[5]:https://cdn2.hubspot.net/hubfs/352767/Loyalty%20Report%202018%20Files/Bond_TheLoyaltyReport%202018%20US_Exec%20Summary.pdf

[6]:https://www.acquia.com/newsroom/press-releases/once-they-commit-us-consumers-are-loyal-life-says-acquia-survey

Processes Involved in Warehouse Management

Top Warehouse Management Problems

1. No inventory accuracy in the warehouse

2. Inventory location and layout

3. Utilization of space

4. Faulty picking process

5. Fluctuations due to seasonality

Counterfeiting in the liquor industry

A Global Phenomenon

Next-Gen Solutions

Conclusion

By combining physical and digital, organizations can open doors for incredible opportunities.

What does this integration mean?

Why is it the Game ChangeFuture of Supply Chain?

Get in touch with us to know more about the possibilities for your brand.

The Counterfeit Menace

Problems in the Automobile Industry

Problems in the Automobile Industry

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