This is a story about sales of online counterfeits and how it damaged a world known CPG brand to the tune of $1.2M/month.
In a recent report, the Commission on the Theft of American Intellectual Property says the annual losses from counterfeit goods cost the United States $29 billion to $41 billion a year. It is an amazingly large amount of money.
We mass production, affordable shipping and premium brands there’s a lot of motivation for counterfeiters to take on leading brands and do any of the following:
- Copycat them
- Break legitimate bulk packages into separate units at premium prices
- Sell at an outrageous uplift
It all started with a desire to know your customers
Our CPG customer reached out to us to leverage our technology to better understand the market, other brands, products and what consumers talk about in general in the space.
The industry challenge with mining consumer opinions is that it’s very hard to mine it. It’s a lot of data, and mining it relies on having a team of experts using text analytics software to look for keywords and phrases. It’s a high effort low return exercise as you need to guess quite a bit:
- Guess the topics that people talk about, including ones that are not on your mind
- Guess ALL the different ways that people talk about the same topic. If we take the example of an electrical appliance battery, you’d need to look for all vairations about it such as “mine doesn’t hold charge” or “battery is weak” etc
- Guess the next hot topic: With new products/features comes new issues
However at Revuze we offer the first all automated, zero setup, consumer insights solution:
- It automatically identifies topics and interests
- It automatically understands that different terms talk about the same topic
- It learns new terms that surface and their meaning
With Revuze our CPG partner was able to identify product issues, consumer trends, new competitors etc.
One day, a new trending topic surfaced, “product authenticity”!
What happens when your customers call you a fake
The team at the CPG customer noticed the strange and new trending topic and immediately drilled down to understand the source of it, what are the actual opinions behind it and around which products it evolved. Luckily, Revuze technology can do that in real time.
The team found that there was a trending online store on one of the large e-commerce sites that was selling counterfeit products at attractive prices. Now that the team was aware they leverage corporate legal department to immediately follow with the e-commerce site to ask it to shut down that store. Between paperwork and information exchange it took about a month to close down that store. In that month the CPG sales declined by $1.2M !
Manufacturing consumer goods and selling them online was never easier. All you have to do is contract a manufacturer and connect them to your e-commerce store and you’re done. With such a low barrier of entry there’s no surprise that counterfeiters sell fake products online more and more. The question is not if it will happen to your brand, the question is when it will happen to your brand. The best you can do to protect your business is to invest in advance warning systems that will let you know as early as possible when it happens, as quick recovery is key.