BIKERIDERLONDON / SHUTTERSTOCK.COM
Brands need to recognise and respond to the increasing sophistication of the rogue trader’s mind. Elisa Cooper of MarkMonitor outlines some important tips.
In the last few years, the digital world and retail have become firmly intertwined, with consumers enthusiastically browsing, shopping and engaging with brands across a wide spectrum of digital channels.
The digital world allows brands to draw detailed maps of consumer motivation and purchasing patterns, generating reams of big data to provide well-informed insights in an increasingly diverse consumer journey. However, there is little information about consumer motivation and the demographics of those who shop at sites selling counterfeit goods—sometimes known as ‘rogue’ sites.
Key questions can remain unanswered. Is the purchase a deliberate, informed purchase, or an inadvertent one? Are consumers being tricked by rogue sites?
Fashion has been a long-time favourite target for counterfeiters, some of which have followed consumers online to masquerade as legitimate purveyors of desirable goods. Because of this, the fashion world has important lessons to apply to brand protection programmes for any consumer-centric industry, since savvy shoppers increasingly seek genuine purchases online and encounter counterfeiters instead.
A recent MarkMonitor study, from 2014, highlights these lessons. We undertook a study of selected internet users in five European countries and surveyed almost nine million shopping sessions during a nine-month period. We focused on the search terms employed by shoppers in order to understand what they were looking to purchase.
We classified terms such as ‘cheap’, ‘discount’ or ‘outlet’ as bargain-hunting terms and terms such as ‘counterfeit’, ‘fake’ or ‘replica’ as fake-seeking terms, indicating a considered purchase of counterfeit goods. We then examined the aggregated traffic for shoppers using both sets of terms to see if shoppers visited sites selling legitimate merchandise or rogue sites.
In a continuing testament to the increasing professionalism of rogue sites, the findings revealed that one in six bargain hunters is duped by the perceived ‘quality’ of the rogue sites and then unwittingly demonstrated an intent to purchase counterfeit goods.
The look and feel of rogue sites can fool even the savviest of shoppers as counterfeiters have been known to use brands’ latest photography, logos, and advertising campaigns to lend credence to their sites.
To further enhance the legitimacy of rogue sites, most counterfeit goods are priced to appear as legitimate goods that have been put on sale. Discounts of 25 to 50% are often offered, which, while steep, are comparable to end-of-season or ‘blowout’ sale rates. Because these prices are plausible, bargain hunters are lured into snatching up counterfeit goods thinking they’re purchasing legitimate goods.
By focusing on the bargain-hunting behaviour, counterfeiters are able to siphon customers seeking legitimate merchandise away from brands. This results in disappointed customers and a negative impact on brand reputation, costs the company customer service expenses, and has a negative impact on digital marketing and revenue.
An effective online brand protection strategy is essential to ensure that brand integrity, marketing investments and customer trust are not being undermined by unauthorised digital activities.
The strategy has to address all aspects of the issue—distribution, promotional channels and consumer education.
According to market research company the NPD Group, more than 70% of consumers shop online to save money. As consumers increasingly turn to the internet for deals, brands should consider three pre-emptive steps to make sure ‘brandjackers’ don’t come between them and those seeking a legitimate bargain:
Buy search key words such as ‘discount’, ‘outlet’ and other bargain-related terms, and point brand-seekers to sale items or appropriate retailers. Also, closely monitor these search terms to ensure that brandjackers are not siphoning your potential customers away from your brand;
Monitor for the existence of domain names with these bargain-related terms and recover those receiving significant traffic. Point recovered names to landing pages that educate consumers on your company’s philosophy on counterfeits. Do not let the counterfeiters and other brandjackers use domain names like brandoutletstore.com or discountbrand.com and steal your customers. Today’s aspirational customer may be tomorrow’s loyal buyer; and
Consider the effect that the expanded domain name system will have as new generic top-level domains (gTLDs) such as .discount continue to be rolled out.
"We found that brands that had not engaged in litigation attracted more clicks on rogue sites than brands that had litigated actively against counterfeiters."
While these tactics won’t prevent counterfeiters from targeting your brand, they can insulate your brand from some of the more common methods used by brandjackers. However, the key to an effective brand protection strategy for any industry category is vigilance, effective prioritisation and consistent enforcement.
Brands need to recognise and respond to the increasing sophistication of the rogue mind. An obstacle all brands face is the scale and complexity of the problem. In our experience, a single counterfeiter may operate 40 to 60% of all rogue sites that target a particular brand and generate up to 70% of the traffic to sites selling counterfeit versions of the brand’s merchandise.
Shutting down such a network is an effective way to disrupt, and even potentially cripple, the counterfeiter’s business—and send a powerful message. The ability to combat counterfeiters at scale is a powerful weapon to disrupt brandjackers’ business operations.
Although many successful brand protection programmes are spearheaded by a single department, the ideal approach should be coordinated, cross-departmental and automated. Smart brands develop brand protection strategies for the digital world that go beyond the legal department or brand protection group, to involve brand management, marketing, customer service, loss prevention, risk and supply chain management.
Be sure to search for counterfeit goods in distribution channels such as e-commerce websites, auction sites and marketplaces, as well as in promotional channels, including social media sites, within mobile apps, and across email channels. Track down abusers before they become repeat offenders, and head off any potential problems with reputation, brand confusion, or diverted site traffic and its associated click-stream and revenue. A proactive strategy will make you a harder target.
There will always be those who are in search of inexpensive, counterfeit goods, but brands should make it easy to find legitimate merchandise and not be waylaid by counterfeiters. Consider adding a page to your website that lists your legitimate re-sellers. List your policies about discounting and guide your consumers so they know where legitimate goods are found and where they need to exercise caution. Let them know, for example, if you only sell through brick-and-mortar stores and not online, or if you don’t discount.
We advise redirecting defensive holdings such as brandoutletstore.com or discountbrand.com to content that describes your position on discounting and gives information about where legitimate goods can be purchased.
For those that have applied to run their own .brand gTLD registries, also consider building a trusted place where legitimate goods can be purchased either directly from you or through your authorised partners, re-sellers and distributors. While the costs to implement will be significant, the rewards have the potential for changing the way consumers understand what constitutes legitimacy on the internet.
When the law works
Many brands have carried out effective litigation efforts against counterfeiters, targeting the operators of rogue site networks and securing court orders directing that the rogue sites be handed over to the brand owner.
What effect does this have on consumer traffic to rogue sites?
We examined the bargain-hunting traffic to rogue sites in our study, based on the brands that the internet users clicked on, and divided those brands into ‘litigating’ and ‘non-litigating’ brands, based on public records of brands’ litigation against rogue sites.
We found that brands that had not engaged in litigation attracted more clicks on rogue sites than brands that had litigated actively against counterfeiters. In other words, more bargain hunters visited rogue sites featuring brands that were not actively targeting online counterfeiters. Bargain hunters were less likelyto click on a rogue site related to a brand that had litigated effectively against counterfeiters in digital channels.
While not definitive, this analysis indicates that active enforcement efforts, including litigation, can be highly effective in deterring consumers’ ability to find fake goods online, and deserves more study.
Brands that forge a close relationship with customers across a variety of channels reap the rewards in loyalty and repeat business. Taking steps to ensure that brandjackers do not come between the brand and the consumer translates into continued positive return on investment in the digital world. A brand protection strategy that addresses all facets of the problem—distribution channels, promotional channels and the consumer—is crucial. Only by adopting a comprehensive, centralised, and strategic approach will brands succeed.
Elisa Cooper is vice president of domain product marketing at MarkMonitor. She specialises in the field of online brand protection and domain name management. She is also a member of ICANN’s Business Constituency, the International Anti-Counterfeiting Coalition and the Online Trust Alliance. She can be contacted at: email@example.com
counterfeit goods, MarkMonitor, gTLDs, .brand, domain names, brandjacking