The intellectual property to create your specific products is arguably the most crucial thing any brand or manufacturer owns. That brand is the key to differentiation and escaping commoditisation – the race to the bottom, for goods that consumers feel are essentially the same as each other. Branding and emphasis on product elevate a business beyond the price-warfare tier of retail.
Unfortunately, brands are not always truly in control of their image. Many find that their products are being resold online by unauthorised or unknown retailers. Often the visual representation of the product is lacking in sophistication, the range is only partially (or incorrectly) labelled and displayed, and old lines are sold alongside new ones. In the worst cases, used goods and even counterfeit goods can appear in searches alongside the latest products.
On top of this, these smaller grey-market retailers may not be providing the quality of service that the brand would expect. The customer experience is therefore degraded on both ends, as the manufacturer has lost control of pricing and branding pre-purchase, has no influence on the smoothness of the ordering and fulfilment, and has no opportunity to rectify any customer service issues.
So how can brands retain their value and control their image online?
Step one is to conduct some analysis. The dangerous reality that brands have to confront is that their products are almost always sold online on various channels regardless of whether they have a view on it or not. Whether it’s secondhand consumer-to-consumer (C2C) sales, independent retail arbitragers who are getting the product elsewhere at discounts and marking them up to sell them online, retailers who are obtaining the product from distributors and wholesalers, or the wholesalers themselves: the product is almost always out there – out of the brand’s control or influence.
The simplest and most direct approach to understanding the scale of the problem is to search for the brand online, on Amazon, Google, eBay, and other relevant marketplaces. Filtering the search for specific products or attributes such as colour can turn up the “long tail” inventory – the products which aren’t bestsellers but are offered in order to ensure a wide range of options for customers. Online, this is often where the danger lies for brands, and where the damage is done.
Once the scale of the issue is established and the quality of brand representation on different channels has been evaluated, the business can prioritise the most critical areas to action.
The next stage involves taking remedial action to address the symptoms identified in step one. This can take many forms, but typically the first place to start is with the supply chain. Identifying and plugging leaks in the supply chain can be challenging, but it is important to reduce the volume of product available to sellers who do not respect the value of the brand.
By signing up to programs such as Amazon’s Brand Registry, brands can control the information and description on the page of all their protected products on Amazon. This means that other sellers, while they can still list against the catalogue, cannot alter the information about the product. Amazon also offers brand “gating”, whereby only seller accounts with good standing are allowed to compete on the listing for a brand’s products. Brand gating is a powerful tool to reduce the danger of counterfeit products being sold on an otherwise legitimate listing. Other marketplaces such as eBay offer similar programs and IP protection services.
Counterfeiting is increasingly problematic for consumer brands on platforms like Amazon. Unfortunately, it’s nigh impossible to stop counterfeits at the source by the nature of the businesses that make them. What can be done is to treat the symptoms proactively before they grow into severely damaging representations of the brand.
Finally, the long term play for some brands will be to sell directly into these channels and establish an official presence. When selling directly to consumers, the manufacturer or brand has total control over the customer experience. This allows you to curate a high-quality, low-friction experience around the purchase as well as around the product itself and gives you end-to-end control from design to delivery and in-life service.
Customers also prefer to purchase directly from the brand where possible. BrandShop research indicates 88% of consumers would prefer to do so where the option is available. That gives brands selling direct an advantage over competitors simply by the nature of their presence being branded and official.
On top of that, given its direct access to the product supply, the brand should easily be able to out-compete the poor merchandising and brand-damaging representations offered by others. Of course, to retail successfully, brands still need the right help and the channel-specific knowledge to deliver best practice listings, user experience, and performance.
In summary, then: brands and manufacturers need to assess the problem across channels, then act to treat the symptoms by enforcing their intellectual property rights and monitoring the supply chain from distribution onwards. Finally, establishing an official presence is a long-term strategy for preventing the problem growing in future.