Authentication as a necessity for sustainable strategies
Do you think authentication is just a matter of original or fake products? There is much you need to know.
Authentication is becoming an increasingly important part of doing business. It impacts not only the economy of a company, but also the customer relationship. Furthermore, authentication also plays an unexpected role in the transition to sustainability.
Authentication and counterfeiting
Counterfeiting is a huge problem for many industries, especially luxury brands. According to the Organization for Security and Cooperation in Europe (OSCE) up to 10% of the total global trade is from counterfeit goods, with the largest category being fashion.
Fortunately, product authentication is a powerful tool to fight it. We see it firsthand: in 2021 alone, brands using Certilogo authentication solutions intercepted €36m worth of counterfeit products before customers bought them, thus enabling them to recover these stolen sales.
Today, technology makes product authentication easy and immediate. Thanks to QR codes and NFC tags, a common smartphone is enough to immediately know if a product is original or fake, or find out more about the entire supply chain.
Trust and customer experience
Traceability and brand transparency are excellent drivers of brand loyalty.
A customer who can access information on the product and related content will feel more involved in the company's philosophy, more empowered, and, above all, more confident about how they are spending their money.
All this leads to greater trust in the brand which, in turn, leads to loyalty. Yet customer loyalty is something that companies should nurture over time. To do so, they need to offer a positive customer experience.
The keyword here is engagement.
Customer engagement is the ability to connect with the customer, understand their needs, and offer products, services, and content that goes beyond their expectations. It also means starting a conversation with them. Today, thanks to social media, push notifications, and other technologies, companies can speak directly to customers. They can ask questions, propose surveys, collect feedback and find out what consumers really think. On the other hand, customers can write reviews, ask questions, and create content. It is a reciprocal exchange that brings many benefits to both. Indeed, a study by Bain&Company showed that companies that excel in the customer experience grow revenues 4%–8% above their market.
How authentication helps a company improve its customer experience:
- it supports trust,
- it adds value to the product and empowers exclusivity,
- it enriches the user experience,
- it helps to start conversations and collect feedback,
- it helps to know customers better, by collecting data.
Authenticity and sustainability
Authentication also has a key role to play in sustainability. In recent years, many brands have made commitments to become more sustainable, but these commitments are not always credible. Authentication can help in different ways:
- It ensures transparency and traceability
As we've already seen, authentication technology allows a company to share information about a product: from raw material to manufacturing, from carbon footprint to disposal. This has two consequences that are relevant in terms of sustainability:
- customers have all the information to make responsible purchases;
- suppliers along the supply chain are forced to adapt to the brand's production standards and values of sustainability or social responsibility to avoid being replace with more aligned competitors.
- It adds credibility to a brand's sustainability claims
It is easy for a company to say that it is sustainable, but is it really so? Understanding the real commitment is difficult. It is not uncommon for brands to hide the environmental impact of their production behind ambiguous or incomplete messages (greenwashing). But consumers are becoming more skeptical: they need (and want) proof of a company's claims. Authentication helps brands by providing evidence that their sustainability actions are real. When a product is authenticated, the customer can be sure that the information is reliable.
- Authentication reduces the damage caused by fakes
Let's go back to counterfeiting for a moment. We tend to believe that counterfeit products only harm the economy. Actually, these products often contain materials that can be hazardous to consumer health and the environment. Authentication reduces the circulation of these products and their impact.
- It supports a circular economy.
Today’s economic model is linear: a product is created, sold, used, and then thrown away. Unfortunately, the fashion and textile industry produces a large amount of waste, but only 1% is recycled. The reasons are different. For example, the recycling of fabrics is technically difficult. Then, customers are not educated about the correct disposal. However, it is the linear model itself that no longer works. This is why the circular economy is becoming more and more popular.
In circularity business models:
- products must ‘return back home’ to the brand at some point along their lifecycle;
- products can be reused and resold through the second-hand market.
Authentication is key to efficient sorting and processing, and, most of all, it ensures that a second-hand product is original. Both are fundamental for an effective circular economic model.
Most of the information and statistics in this article are taken from the white paper “Connected Products: Empowering Fashion’s Sustainable Future” by Certilogo.