Interview • 21.01.2019

Retailer app identifies counterfeit products and strengthens customer relationships

Secure barcodes on paper labels offer retailers and customers many benefits

Counterfeit goods prompt harmful financial losses due to a loss of sales and profits, decreased tax revenues and by threatening jobs – and this doesn’t just impact retailers and manufacturers. According to EUIPO (The European Union Intellectual Property Office), these losses add up to several billion euros annually across the European Union.

From the customer's perspective, it is likewise frustrating to consciously opt to purchase a branded product and then end up with a counterfeit instead. An innovative solution is designed to enable customers to personally verify the authenticity of a product they ordered. If they use the retailer’s app for this, it affords the seller many opportunities to interact directly with the consumer. In this interview, Dr. Ulf Sparka, Managing Director of inotec Barcode Security GmbH, describes how retailers can take advantage of this granted access.

Smiling man with glasses; copyright: Inotec
Dr. Ulf Sparka from Inotec Barcode Security GmbH
Source: inotec Barcode Security GmbH
"Customers can rest assured they are about to purchase a branded product." (Dr. Ulf Sparka)

Dr. Sparka, how did you come up with the idea of offering your service to retailers and manufacturers?

Currently, counterfeit goods account for annual losses of more than eight billion euros in Germany. The German and European markets are flooded with unbelievable amounts of counterfeit products. This means it is likely that every one of us has purchased a fake product at some point.

That’s also why consumers can’t rely on getting a branded product. If you buy products at the brick-and-mortar retailer down the street, you may still be able to presume that you just purchased an original. However, if you buy items online and the product is shipped from China, for example, you have a valid point in wondering whether you are indeed purchasing a branded product. We can reliably answer this question.

And you are able to do this with the help of labels?

Yes thanks to plain paper labels without NFC and RFID. Maybe they are not terribly sexy, but they work and they are inexpensive. NFC or RFID tags cost a few cents apiece, while paper labels are much cheaper.

How do you know so much about labels and barcodes?

We specialize in sequential barcode labels. We typically label reusable containers or those in open circulation. Food retailing uses container pools for transportation for instance. These containers are usually labeled with a barcode and we provide these barcodes.

There are many different types of barcodes out there.

That’s true but our barcodes are unique. Some milk cartons feature the same barcode for the cash register, for example, so you can identify and track the item. However, we make individual barcode labels. Our labels are absolutely tamperproof.

Are they really 100% tamperproof?

People wonder and ask us the same question all the time because 100 percent counterfeiting protection is a strong claim. After all, banknotes are supposed to be counterfeit-proof due to their many security features. And yet there are many counterfeit banknotes in circulation.

How does inotec solve this problem?

We take a different approach. Rather than being rooted in the printing technology, our security guarantee is in the software. We generate two random numbers, combine them and print them on a label with one number being visible and one being hidden in the background. This number combination is stored in a database. Customers can scan the label with my smartphone and check via an app whether the two numbers match. In doing so, they can rest assured they are about to purchase a branded product.

Woman scans QR code on a parcel; copyright: panthermedia.net/Rateland...
Source: panthermedia.net/Bizoon

What are some other benefits of product authentication for retailers?

The retailer has a direct channel for customer communications if the consumer verifies the product via the app. Retailers can try to build customer loyalty with the help of the app by offering added benefits. Retailers can provide more content such as an explainer video for the product or recommend other related products and services like athletic trunks or training plans matching the running shoes.

Retailers could also turn the purchased product into an admission ticket to different experiences. For instance, those who scanned the code combination are permitted to download pieces of music, watch videos or become a member of an exclusive user club.

You are only limited by your own imagination when it comes to the countless ways you can utilize this access to the customer. This is where marketing departments come into play to shine.

Does this interaction also allow you to collect and use data?

Definitely. The app passes all interactions to a database in the background. Retailers and manufacturers with access to the database - either via a web app or a CRM connection - can subsequently track how their customers are currently using the product and the app. This would allow them to measure a product rollout in the market or the effectiveness of specific sales campaigns in real-time.

You have to admit that there is a catch: both customers and retailers need a special app for this service.

That is definitely a sticking point and obstacle you must overcome by creating more incentives for customers to install and use the app.

Retailers don’t have to develop or adopt a new app. We deliberately designed the product to be scalable. Those who don’t have their own app can use one of our branded apps. Retailers who already use their own apps can simply integrate our application.

What are some options if retailers or manufacturers want to try out your solution?

If you want to start small, you can get fully preconfigured labels. One label roll can label your red running shoes, while another roll tags the blue running shoes for example. This option enables retailers or manufacturers to personally attach the labels to the products.

This is not the best method if retailers or manufacturers offer dozens or hundreds of products. In this case, you would use a roll with 'blank' labels and then clearly link them with a new product and initialize it. This data is then stored in the database and ideally also made available in the ERP system.

Is your solution already in use?

We are still in the rollout phase. We have our first pilot customer, a German manufacturer, who also sells his products in Asia. This manufacturer places emphasis on offering his users the possibility of product identification and authentication but also hopes to learn more about his customers in Asia.

Author: Julia Pott, iXtenso – Magazine for Retailers

related articles:

popular articles:

Thumbnail-Photo: Rewarding customers for sustainable shopping...
29.07.2019   #sustainability #loyalty cards

Rewarding customers for sustainable shopping

Koin Rewards & Fidel bring loyalty and card-linking together

Koin Rewards, the ethical rewards platform built on the blockchain, announced that it has partnered with card linking API Fidel to build a responsible and sustainable rewards program for shoppers.Koin Rewards is working with Fidel to build a ...

Thumbnail-Photo: Consumers demand sustainable fashion but won’t pay more...
28.06.2019   #sustainability #fashion

Consumers demand sustainable fashion but won’t pay more

Top five demands for the industry to become more sustainable

New research suggests over half (52 percent) of consumers in the UK and US want the fashion industry to become more sustainable, with calls for reduced packaging and fair pay for workers among their top demands. But only 29 percent of these ...

Thumbnail-Photo: The POS TUNING Pizza Presenter
24.07.2019   #product presentation #refrigerated shelves

The POS TUNING Pizza Presenter

The presentation solution for round pizzas in the chilling area

At the point of sale, customers can only buy what they see. This is the motto of POS TUNING from Bad Salzuflen, the solution provider for optimized product presentation at the point of sale for almost all product categories.The POS T Pizza Presenter ...

Thumbnail-Photo: Innovation in sustainable packaging design and materials...
08.07.2019   #sustainability #packaging

Innovation in sustainable packaging design and materials

Bosch Packaging Technology and BillerudKorsnäs intensify collaboration

The demand for sustainable packaging among consumers and brand owners all over the world is growing at an exponential rate, which in many cases drives a strong need to replace plastic packaging. Strong partnerships are required to bring about the ...

Thumbnail-Photo: “What do you have that nobody else has?”...
16.09.2019   #data management #digital marketing

“What do you have that nobody else has?”

Exhibitor statements from the halls of DMEXCO 2019 on marketing trends and technology

We from iXtenso were visiting DMEXCO 2019 and looked around for the latest opportunities and technologies for marketers. We asked some companies what makes their solution unique – here are some answers. ...

Thumbnail-Photo: Distract or divert!
10.09.2019   #customer satisfaction #customer relationship management

Distract or divert!

How to engage customers at the checkout

Retailers and retail designers spend a considerable amount of time discussing and juggling a crucial aspect of the customer experience at the point of purchase: the checkout.To be fair, it’s not easy to turn the moment when customers have to ...

Thumbnail-Photo: Choosing the right marketplace for your business: A profitable niche...
17.06.2019   #online trading #marketing research

Choosing the right marketplace for your business: A profitable niche product is key

"Platform strategies are critical for success," says Dr. Kai Hudetz of the IFH Cologne (Institute for Trade Research)

Ebay or Amazon, Zalando or Otto? Retailers have many options when it comes to an online marketplace where they can sell their merchandise. Success for retailers hinges on making good choices.Dr. Kai Hudetz, CEO of the IFH Cologne, gives tips on what ...

Thumbnail-Photo: A pearl among commodities: encouraging impulse buys...
11.09.2019   #pos marketing #customer analysis

A pearl among commodities: encouraging impulse buys

How to make the most of wait times

It’s wonderful if customers come to retail stores to buy things. It’s fantastic if they buy more than they planned to purchase. This offers many opportunities, especially for brick and mortar retailers as surveys show: customers are more ...

Thumbnail-Photo: Get your business ready for E-commerce!
30.09.2019   #e-commerce #customer satisfaction

Get your business ready for E-commerce!

E-commerce Berlin Expo 2020 starts on the 13th of February 2020

The E-commerce Berlin Expo 2019 gathered more than 55000 visitors, 150 exhibitors and 45+ speakers taking part in the annual fair. The numbers speak for themselves - EBE has become one of the most important e-commerce events in Europe. However, ...

Thumbnail-Photo: BOPIS: state of the retail industry
16.08.2019   #e-commerce #customer satisfaction

BOPIS: state of the retail industry

Customer experience in the “Buy online, pick up in-store” process

“Retailers who are winning in the BOPIS game have a mature inventory management system that clearly indicates what is available for BOPIS, but those who prioritize order fulfillment are building the greatest customer loyalty as their BOPIS ...

Supplier

POS TUNING Udo Voßhenrich GmbH & Co KG
POS TUNING Udo Voßhenrich GmbH & Co KG
Am Zubringer 8
32107 Bad Salzuflen
HappyOrNot
HappyOrNot
Innere Kanalstraße 15
50823 Köln
loadbee GmbH
loadbee GmbH
Nikolaus-Otto-Straße 13
70771 Leinfelden-Echterdingen