How luxury brands can protect themselves online

welcome everyone and thank you for joining us today for a discussion on best strategies for luxury brand protection online before we get started please note that today's webinar recording will be made available on the vogue business website following the panel my name is hilary milnes and i am the executive america's editor at vogue business joining me today is paolo brune chief operating officer at fleet model and alessandro verchiloni sales director for southern europe at opsec security welcome both and thanks so much for being here today thank you larry great to be here hi larry thank you of course so

before we get started with the q a i wanted to um offer some context on today's discussion so the past year has of course seen a sales surge online and with that comes an uptick in counterfeit activity opsec research has found that 35 of customers say that they shifted to shopping online during the pandemic but at the same time customers are still wary of buying bigger ticket items online like jewelry and watches specifically if you look at that category 87 percent of people are comfortable buying these items in store compared to 52 who are comfortable buying them online 65 percent of customers also say the price plays a role in their decision to shop online so coinciding with that counterfeits are on the rise a quarter of customers surveyed by opsec accidentally bought a fake product in the last year and when it comes to where brand trust is lacking customers say that social media platforms and online marketplaces are the least trustworthy places to shop that coincides with the burst of online marketplace growth during the pandemic and social platforms have also been ramping up their commerce strategies in the pres in the past several years so brands are likely to have some sort of presence in these places either firsthand or third party and despite lacking trust in marketplaces and platforms in terms of responsibility customers are looking at brands and retailers to act as counterfeit watchdogs according to the us department of homeland security customers feel that brands and retailers need to do more to protect their own brands online uh all that's to say investing in anti-counterfeiting measures doesn't mean that preventing face is the only end game there are other benefits to investing in this type of technology um they can open up better communication with customers and today we'll also be touching on the content opportunity um some examples philippe modell's anti-counterfeit qr codes also unlock social features helping to encourage a post-purchase community in connection with the customer um and in the future we'll also let customers trace their shoes on the blockchain ensuring product authenticity and transparency and sustainable brand cocoa kind uses qr to share sustainability information with customers post purchase as well encouraging transparency and education in the sustainability space so with that let's bring in our panelists and dive in

um paulo i'd love to hear from you can you explain philippe modell's approach to anti-counterfeiting and why authentication is so important to the brand so let me briefly explain you that we are an athletic brand we produce fashion shoes we were born 1978 in paris and our consumer search for from us from our product authenticity loyalty creative freedom so at a certain point we felt i mean due of course with the increase of the space on the online channel that we were in need to defend such values of ours with our customers because uh they were looking for our authenticity you know our motto is a reason in a sense with italian craftsmanship and we do believe our customers are looking for such values so we decided to get stronger on the counterfeiting and we decided to start an incredible project with the opsec on one side with alessandra in particular and now we are able to um offer to our final customer uh trust that our products are really uh what they can purchase what they can buy on the retail on the online on the brick and mortar is definitely our product so to do this uh we implemented the qr strategy together with an rfid technology we are able today to really track and trace every single step of our production from a raw material to the finished product going through our factories till the warehouse until the the beyond of the customer who wrote our products online we are working to increase these the power of such a tool with the blockchain actually we are working on it in these days in order to be able also to offer our customers not only a better experience on when they purchase our products so they feel really safe in purchasing our product online but to give them all the story of our project we and each and every single product of ours is unique with our unique serial number uh with an anti-counterfeit label uh with a serial um authentic authentication code with such a tool they can enter i mean for us we like to say it's a gate to the social because they can enter our social and we know who they are we know that particular and specific product has been bought but such a customer and we can also offer of course a series of um of services like after sales like returns and like repairing yeah absolutely and um

alessandra i think what's interesting here especially is that it's the two-pronged approach you have the anti-counterfeit measures and then also the after sales opportunity that fellow is speaking to connect with customers um so can you tell us about opsec's approach this problem and just what you hear from luxury brands um like pete modell and others uh who are looking for a solve okay so as you know um sales online and purchases online have increased quite a lot during the pandemic but is uh this was a trend that started well before the pandemic and what we see is observer who has eyes online and offline because we are not only producers of authentication solutions but as well watchdogs are online is that this trend is growing and as it's as it is growing up also the counterfeit challenge is growing so we see a number of very good counterfeits appearing on social media on marketplaces and what our brand customers are asking us is how to say a 360 degrees a solution or defense uh to be produced and engineered around their products opsec is a boutique service provider we create and design solutions very specific to the needs and the demands of our clients and their products what they ask us is number one to embed a multi-level security uh authentication technology in their products so that they can use those features to inspect or allow consumers so to authenticate goods at different points to trades those products so the very same solution needs to enable full traceability through the entire life cycle of the product and at the very end allow as well consumer to read that security code and be able to access the consumers the brand site where they can authenticate register or take part to social events or brand events where they will be invited so in short terms what our customers are asking us is really to help them develop a solution that can protect their products and their brand equity through the entire life cycle of their products

yeah and can you uh explain the increase in online purchases coinciding with brand risk you mentioned you know of course we've seen an uptick but this was happening before the pandemic um where are the biggest vulnerabilities for brands online and you mentioned you know 360 across channels well it is a very complex subject is one or uh where is the vulnerability is that the proliferation of marketplaces the fact that social medias are now becoming a real global uh place where people are buying and searching information about products and where they are buying on recommendations in where there is a little policy by social media themselves to prevent the appearance of counterfeiting or illegitimate goods so it is uh development developmentability is evident the challenger to us and to our clients is to constantly monitor these data online uh be able to detect but as well to be able to remove that content and those uh social um those selling posts that is where the challenge is that this is where obserca is very capable in protecting our brand's interest we have a very long experience with enforcement we are part of some of the largest brand owners organization or anti-counterfeiting organization we are lobbing on marketplaces so that they will adopt better processes to remove our goods because the honors to prove the authenticity of goods is on brands and not on the sellers so this is really what is driving us and our clients uh pretty uh furious let's say right and paula from your perspective um on that side of the question how did you recognize that you know as customers would be buying and selling online this is something that that um fleet model needed to invest in and where did you get how did you get started i mean i joined this company one year ago so i already found a path on this road but i mean the decision to have a bid with the external vendor in order to enforce um our strength against the counterfeiting was taken a few months after my arrival and i mean among all the different companies we were discussing with uh i have to say that i mean uh alessandra was telling me more or less what was telling you a few minutes ago and uh this was uh definitely uh one of the points that moved uh fleemodel to follow upset in this project in order to um be uh much stronger than we were since uh one year two years ago on the market of course as i mentioned before we increased a lot our sales during the last year and we saw so many different marketplaces uh selling our products uh now i don't want to enter into details of how many products not authentic we found on the market but i mean um it's as alessandra just said is a something that you have to manage every day that we have to monitor every day that and you have to stand for because again is the brand the responsibility to be sure that the authenticity of the product is strong on the market that is also strong in the head of the perception of the final customer because that's the only way to convince in particular i would say in a luxury environment where i mean money counts and i mean people has to buy in front of the screen or with the mobile in the end and there is no any human relation that you might have in the brick mortar scenario where you can trust much more in a human being selling you some expensive goods so that's a key point for us on the other side of course it's also true that trying to be sure about your authenticity allow us to work on the market in a different way to deal with the marketplace's owner in a different way in order to again go into the direction to be sure that each and every single pair of shoes with our brand is often and as you know a luxury sneaker brand that's an interesting intersection to sit at when it comes to this topic because we have seen the sneaker marketplace industry explode so much over the past several years how do you kind of weigh the opportunity for sneaker brand to get in front of new customers on these marketplaces especially the younger customer where they want to buy and then weighing that with the brand risk that comes associated with that that's a good question i mean we spend a lot of time inside the company to discuss about this point and how to come to the to the point itself and to give an answer ourselves so it's not it's not an easy topic to be to be discussed if you mean it's anyhow i mean fleeing model as i mentioned before was born in paris in 1978 they did not started immediately producing sneaker but actually the first production of the stylist they were highly high heel women shoes but in fact filimo del was one of the first brand producing luxurious thinker i mean uh way before nike and adidas took over from the archives of the dunk on one side and the stands meet on the other side and they were able to build such a request on the market in particularly with the young generation with the millennials approaching 10 years ago phil modell was there and they were producing already shoes for 450 500 us dollar but still sport shoes laser shoes so this was always been the aim of our brand to attract the people on the marketplace uh one way for sure is also as i mentioned before to create a gate to the social so the way we sell our products and we tell our customers really this is a unique piece of art that we produce and we put on the market and it's unique because there's a serial number there's an authentication code and you can check it on the internet and soon you will also be able to check the life of this product from the raw piece of leather till the very finished product that you are unboxing in that moment so that's a good way for us to build a good link with the customer on one side but also to assure them our loyalties and the importance of the quality of the authenticity in our product

definitely and um alessandra i i'm interested to hear in your work um what makes this such a pro like particular topic of interest for luxury brands um and when it comes to brain protection i imagine that this is a category that needs to invest in this um you know type of technology in order to protect their brand online as we said it's the responsibility of the brand ultimately to um you know ensure authenticity what are some of the unique um challenges that luxury brands are facing here duplication lookalikes uh very high quality counterfeits the user or abuse of copyright images that are used by counterfeiters to promote counterfeit goods so it is uh there are many challenges online and there are many ways brands can be compromised online so this is why it's so important for brand owners not only to protect themselves online by leveraging service providers such as opsec but as well to protect their physical product their supply chain and distribution chain because there are many points through which counterfeits or localities can enter distribution so it is important as well for uh luxury brands to start and communicate more with their consumers as a philip model is doing that buying authenticate means to buy sustainable products it means to protect workplaces investments that have been made to manufacture in a fully sustainable way sustain sustainability is becoming a big topic for many luxury brands and only genuine fully genuine products are environmentally friendly so that's uh that would be uh the thing that we are discussing most now with luxury brands yeah and on that how do you measure success um with the brands that you work with what are some of the things that you look at to see you know okay here's progress from six months ago from the past year um how do you define that we have a very good metrics within our system uh on i'm talking about our online brand production services so we create a first snapshot when we start working with brands where we monitor and we detect uh how the situation is so regardless of where how and when a syrian listing was published the first time we give our brand owners a full visibility on what is at the current status or the status quo and from there then we start to measure progress by monitoring the number of listings identified and reviewed and removed the number of infringing listings uh removed and it's uh it's very interesting because you see a decreasing on the number of listings identified and an increasing number of uh removed listings because we start to become very aggressive and when at the level of security and the enforcement on these online listings gets really uh effective then country features are moving elsewhere so we see migration of country features from one channel to the other and the ability of opsec is to follow them through this channel up until the number of listings identified reduces which means that brand is no longer of interest because it's too expensive to counterfeit them and they move to the next brand

great and as we've touched on um you know this goes beyond just eliminating duplicates and counterfeits on the market uh content plays a big role here so paulo look for you should go into a bit more detail on how you fit content um and communication with customers into this strategy uh you know where does that how does that play a role in what philippe modell's trying to achieve here um so i mean again this was an easy point of discussion internal so we are uh making up our mind in the best way and you know i mean things are moving so quickly in such a world of the e-commerce business so we need to be always up to date with the all different decision concerning particularly with the communication so the strategy behind is not easy for a luxury brand because we cannot put egg tags or stickers on the box to communicate what uh the customer will find so uh basically we uh we are communicated inside the product what about our um which is about our and counterfeit label and what are the features that they can unlock uh by using the qr code and what is the rfid feature on the other side are explained on our internet site so we put a small information fundamental information basic information inside the box together with the product and then we explain much more in details what is the feature that protect their uh flimo bell shoe uh that allow allows them to be sure that the flame of the shoe is authentic to the internal side uh so actually as i mentioned before today we are really keen in trying to finish the project relevant to the blockchain alessandra before just mentioned the sustainability of the product and we do agree we are on the same line that a good anti-counterfeit project can really help in being more a sustainable company from an ethic and from a more wider perspective but we do believe also in sustainability therefore we are running already different project on the product and the blockchain will help us to certify uh each and every different approach that we are um aiding on the pro on the sustainable production of our shoes this means that we will put on the blockchain all the information relevant to each product uh with relevance to the sustainability of the material we use to the auditing that we did in the factory we use uh to the uh co2 that we used to produce one pair of shoes but also to ship from our headquarters from our warehouse to the final product so we are looking to use such a tool also to um give one more feature to to our consumer that is a sustainability of products so sustainability of product is also being able to trace and to declare what's being used and what uh what is put on the market by a certain brand and that's what we are going to do with our project on the anti-counterfeit and on the blockchain

right and you can see how that level of visibility is really valuable on the brand side um but how does that approach enhance the experience for the customer and how does that align with what you're seeing that your customers want from the brand i think that you know what's really interesting here is that you know prior to this type of technology brands would sell to a customer and then you know that connection and that communication would be shut off so how are you taking advantage of this ability to keep in touch with customers post purchase okay yes okay we believe that our customers are purchasing our product because of our reputation for the style and for the quality therefore when they access our site that will access our site through the qr code on the show we want to be sure that first they perceive this important point for us so first we want to be sure that they perceive that they bought a quality product so we explained their feature and we of course we cannot do uh too many social activities to link the consumer but the way we want is with the information is with the consciousness that we can give them about the quality the authenticity the reputation of our brand so that's the way we wanna uh engage uh our customers through the social through the access and through the this channel of communication that we are building together great and alessandra from your side um how interested are brands and exploring this type of opportunity um and do you see that there's a level of education that has to play a role in you know kind of guiding the brands in terms of what's possible but then also on the customer side uh because i think that there is a level of of interest but customer behavior is still kind of catching up to the idea that this is this is a possibility so it is interesting it is an interesting

question so yes there is a lot of education to be made with brand owners and with end consumers brand owners that will help them understand the full potential of using qr codes to communicate and share content and share experiences with their brand loyal uh clients with consumer with the general public we need to explain them that little black and white thing is a mentor to speak directly with the brand and to be offered a customized experience now depending how complex the project is opsa can offer solutions where when you're reading that qr code you actually see a real picture of what you have in your ranks indeed that then gives the brand the opportunity to say to the consumer hey nice about these uh this product you know that you could match these other product this other product as well or do you know you can register the warranty of this product and as a final note invite them to leave their contact details if they want so to be part or become a part of the family of that specific brand we have other examples with other brands where instead they are sharing content so number one they give a confirmation that what they've bought what the consumer has bodies are genuine and then they start sharing some visuals some they are extending the experience that consumers would have in a real shop so this is the new frontier how to mimic the experience we are all having when we are entering a shop on the street when we are buying online so that that will be the challenge in the future but everything is possible and uh technology evolves and i i'm confident that more con more brands will start to adopt qr codes and security technology to authenticate products in the interest of the republic yeah and how valuable do you see that

being for luxury brands especially going forward as we're seeing you know the proliferation of marketplaces we're seeing social uh platforms invest more in commerce and online is becoming a more prominent channel for these brands um even especially on both sides the brand protection side and then also that post-purchase communication side it is important number one because if the authentication features or let's say the uh the authentication code is communicated to consumers those consumers that haven't bought on my on the brand site can still verify that code and if that code doesn't talk to them they have all rights to return that good where they bought it so number one is that to offer consumers an opportunity to buy not only from the brand online store but as well on other marketplaces it is uh as it happens in the real world but when they receive that parcel at home they have all means to read using their a mobile phone that code and if that code doesn't talk to them doesn't show any content doesn't show any authentication then they can return those codes back so to me we shouldn't see authentication features are only as features to be used that pre uh before products are sold and not only applicable to goods that are sold in real shop but as well as a feature to protect online purchases so i gain a communication brand owners need to increase a little bit their efforts in communicating what they are doing to protect their public

green and paul i know you spoke a bit about um how this relates to philippe mendez uh sustainability strategy do you see that being kind of the next priority for the brand um as you're investing more in online brand protection and communication around um details and authenticity um what do you see coming next here where are you looking i mean uh alessandro just gave us a perfect scenario what's going on and definitely this is the uh way and this is the the path that we will be following in the next year so um authenticity on one side the sustainability on the other side that they will for sure go uh straight together in the future of any luxury brand and of course also of uh philly model new production a new model on the market i mean the way uh the power that these two uh tool can give to the brand in particular but in general to the economy to everything that is around our world is of course something very important everybody wants to be a part of again the way those tools will help us in engaging the customer communicate with them taking care about the after sales give a trust to the product that the customer has bought from us on the internet but also in a retail store will go together with the power that the sustainable product can transmit to the brand itself right and um and how do you see blockchain playing a role i know you spoke about that coming up um what's the potential there i mean the blockchain of course is something that should grant everybody that the information that we store that we collected on the way during production that we store on the blockchain are those that are really belonging to the product so blockchain is a way to certify a fact belonging to a life cycle of a certain product so fact that we are using a qr code and rfib allow us so today to track and trace every single changing end of the product again from the manufacturing to the final delivery the blockchain will testify that all those information are really belonging to a certain production and to a certain brand uh of course uh this is a another way to um tell a story to our customer and tell a story which is uh authentic which is a really belonging to the manufacturer to the craftsmanship behind each and every single product of philippe model absolutely and that's a huge asset um we're almost enough time but alessandra i'm interested in your perspective on the responsibility and where it lies here i know we established that it is a big part on the brand side but do you see that changing at all in the next few years um whether by uh government policy and reform on that end or marketplace is taking on more responsibility or do you think that this will continue to be something that um brands will have first and foremost control over well the hope is that governments uh the european community will start really understand that what happens online should happen or business held online should really follow the same rules we are all following in the real world so there are big debates especially in europe about uh how the european community can protect brand owners and consumers from the global load of counterfeit goods so my i'm confident we will soon see new regulation come to uh fruition for both brand owners service providers like us in the general public the same is happening in the united states there is a black list published every year on marketplaces that there are measures and laws that are approved and will come soon to interforce about protecting consumers buying online so yes the honors is on brand owners that to protect their goods but the ecosystem is not made by cons brand owners only is made by governments it's made by associations who really need to work together to persuade market places that they have to behave and be in business are following the same rules other businesses are operating in the real world are following right well it will

definitely be one to watch um and we're out of time for the panel discussion um thank you both for the great conversation before we wrap uh here are the key takeaways so brands need a 360 degree view of their supply chain and matching tools to grasp the full scope of counterfeiting these tools have to work across platforms and channels to be effective and with more people shopping online and more brands looking to online platforms for growth this will only become more relevant as we've mentioned as alessandra mentioned this isn't something that was born during the pandemic but it really brought to light issues and vulnerabilities in the supply chain and the importance and the growth going forward of online marketplaces and social platforms um second customers look to retailers and brands to be their watchdogs as we've just said right now the onus is still on brands and retailers to protect their customer relationships and the trust that they have from customers on the market to prevent counterfeits and communication and transparency around their approaches can really help here going forward this might change government might step in but it's still something that brands need to be thinking about and working on a daily basis in order to ensure that they are not at risk and finally there are more use cases to brand security tools than straightforward anti-counterfeiting while that is the basis and it might be the impetus um it's it can be also very much a game of whack-a-mole so it really um will benefit brands to build in a content strategy that adds to the overall customer experience and also just adds and educates the customer on their brand and their product um and so that brings in traceability that brings in the blockchain and that post-purchase opportunity is really interesting and will come into fruition over the next few years so that was our discussion thank you paul and alessandra so much for joining us it's a pleasure thank you it was very much great thank you and thank you to our viewers um as a reminder this webinar will be available to vote business members shortly after we drop and then for all information on our membership program please visit voguebusiness. com membership thank you do you