A Growing Counterfeit Problem
According to Research and Markets’ Global Brand Counterfeiting Report 2018, there were more than 323 Billion USD in global financial losses from online counterfeiting during 2017. Luxury goods represented 30.3 billion USD of these losses.
Today’ cloud- and IoT-based services take a different approach to solving this problem as compared to standard NFC labels, static tags or QR codes. The new generation of trusted NFC tag services is cryptographically secure, combining NFC technology and a cloud-based authentication platform to add unique and trusted identities to products and objects. Trusted tags are available in a variety of form factors to accommodate nearly any object. The authenticity of the object is ensured by tapping the tag with an NFC-enabled smartphone or tablet. Data read from trusted tags has additional security and privacy attributes that change on every tap, making the tap unclonable. Deployment is streamlined because no additional readers or other equipment is needed.
A New Defense
Unlike past anti-counterfeiting solutions, today’s IoT-based authentication services empower the brand and its customers to collaborate on fraud-fighting measures.
Customers get involved at the point of sale, using a mobile app to authenticate the purchase of their premium product. A large distillery in Tasmania has taken this approach for protecting its world-class whiskies, gins and other liquor products. During the bottling process, a trusted tag is attached to each bottle’s label. A secure communications channel is used for all cloud authentication activities, , including verifying the tag and authenticating the provenance of the product down to the actual bottle number.
Additional Brand-Protection Benefits
IoT-based authentication services also bring trust to customer conversations and more engaging and interactive user experiences. In these applications, the same NFC technologies used to combat counterfeit products are leveraged to deliver tailored communications and personalized marketing experiences to consumers in a trusted and closed, privacy-preserving environment. This is particularly important for children’s products in industries including gaming, toys and music.
IoT-based authentication services are also ideal for customer loyalty programs as well as sweepstakes and other promotional events. Traditional NFC tags have been vulnerable to fraud in these applications because they are pre-encoded with NFC data formats for launching URLs on NFC-enabled smart mobile devices. A person tapping this type of tag at an authorized touch point cannot be distinguished from another trying to access the server using a URL refresh or URL sharing. In contrast, IoT-based brand protection services generate a unique URL for each tap that cannot be copied, cloned or shared. This ensures that a customer is physically present to receive a loyalty offering, win a prize or earn a discount or other loyalty award.
Today’s IoT-based brand-protection initiatives enable manufacturers to ensure the provenance of their products and give consumers the confidence that the products they are purchasing are authentic. These highly secure and scalable authentication solutions use NFC technology to empower both manufacturers and customers alike in their fight against counterfeiting, while opening a safe communications channel for brands to engage directly with consumers as part of their brand loyalty strategy.