8 ways brands are using product authentication to boost their business
Secure digital IDs on products provide businesses with the ability to authenticate products with confidence. This capability offers significant benefits to businesses that extend beyond building consumer trust.
Authentication can be used to improve operations, products, and services. Here are eight examples of how businesses are utilising authentication.
Successful implementations of product authentication
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Consumer protection and anti-counterfeiting
Providing consumers with the reassurance that their purchase is genuine is one thing, but with the right digital ID and product authentication implementation, brands can also take control of the problem of fake products. Certilogo's digital IDs, for example, enable brands to intercept faked and cloned product identities, protecting the brand and consumer from counterfeiters and recovering lost sales.
As fake products are intercepted, consumers are directed to sales channels where they can buy genuine products, and data collected in the process helps identify and take action against illegal sales channels. In 2021 alone, Certilogo safeguarded consumers from purchasing €36m of fakes and enabled brands to recover sales that would have otherwise been lost to counterfeiters.
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Trusted traceability
Product traceability is a crucial tool for businesses seeking to enhance quality control, supply chain visibility, regulatory compliance, and product recall effectiveness. Through the use of secure and certifiable IDs, brands ensure the integrity of traced data, providing transparent assurance that the product has been tracked properly throughout the supply chain. This fosters trust throughout the entire value chain, making the brand more appealing to consumers, suppliers, clients, and retailers.
Connected products offer brands visibility to identify issues and optimise inefficiencies, while also aiding compliance with regulations and avoiding potential fines or legal liabilities. By utilising authentication as a consumer engagement hook, the product's traceability is extended well beyond the point of purchase, throughout the product's use and its circular regeneration.
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Consumer engagement
Product authentication provides an opportunity for brands to enhance consumer engagement and generate valuable data for marketing and customer relationship management. It is the most important hook for creating consumer engagement with connected products. For any brand's consumer engagement strategy, incorporating product authentication as an option is vital for achieving high conversion rates.
Consumers place great value on the feature's usefulness and context of trust, making them increasingly willing to engage with the brand. Leading brands leverage product authentication to generate leads, with marketing opt-in rates as high as 39%. Others enrich CRM profiling, deliver campaigns, drive traffic to brand and social-media channels, or solicit feedback through surveys.
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Sustainability and circularity strategies
Consumers are increasingly demanding that brands take responsibility for their social and environmental impact, and are willing to pay more for sustainable and ethical products. Brands that can offer concrete actions to help them establish a responsible relationship with fashion are highly sought after, with 93% of consumers finding connected products with green services useful.
To meet this demand, brands can use secure IDs to provide trusted, transparent, and traceable information about their products. Certified digital product passports enable circular design and services and facilitate sustainable business models based on rental, repair, resale, and recycling. Built-in anti-counterfeiting technology also helps mitigate the negative impact of fake products. In fact, 71% of consumers consider the ability to authenticate a product as the most useful sustainability feature of connected products. By adopting these measures, brands can not only reduce their environmental impact but also grow their business and increase consumer trust.
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Grey market monitoring
Consumer-enabled product authentication provides brands with valuable data. By analysing the data generated from each consumer engagement, brands can understand where and how their products are being sold, and identify patterns and trends that can inform their marketing and distribution strategies. This feature is particularly useful for brands that want to track their products across third-party sales channels, identify overproduction, and monitor unauthorised “grey market” distribution of products outside of the brand’s intended distribution strategy.
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Returns management and manual processing
Authentication can alleviate the need for labour-intensive and expensive manual procedures, such as customs inspections and returns handling. By verifying product authenticity, brands can decrease their vulnerability to "friendly fraud," where dishonest consumers might buy a counterfeit item and return it instead of the authentic one they received to obtain a refund or chargeback.
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Verify consumer feedback
Genuine ratings and reviews are crucial in driving consumer purchasing decisions and can boost sales by as much as 18%. During the authentication process, reviews can be collected and tagged as trusted to differentiate them from malicious, false, or damaging reviews based on bad experiences with counterfeit products. This enables brands and consumers to filter and rely on authentic feedback from actual purchases.
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Gateway premium content and experiences
Secure product authentication enables brands to link individual physical products to digital experiences and services, as well as dematerialised fashion purchases. By implementing verifiable digital product ID solutions, brands can create digital twins for each physical purchase that can be meta-ported and worn in the metaverse. This allows brands to sell NFTs and invite consumers to trade them for physical products, providing new opportunities for exclusivity and exchange of value across both digital and physical domains.
Conclusion
Digital product authentication provides businesses with many opportunities to leverage trust to optimise their business strategies and expand the value of their products. But, on the other hand, brands must be conscious that not all digital IDs are secure and underestimating the security of Digital ID implementations can expose the brand to a wide range of serious risks.
To learn more about how to secure your Digital IDs and Product Passports, as well as how secure product authentication can be used to unlock value throughout your organisation, read our latest white paper “Connected Products: why authentication is a hygiene factor” or contact us to arrange a consultation or a demo.
