Counterfeiting is unfortunately still a widespread problem in the supply chain, with the U.S. Customs and Border Protection (CBP) seizing more than $1.3 billion in goods in 2020.
The CBP report, released in September 2021, indicated that handbags and wallets were the most frequently counterfeited type of product at 17 percent of all goods, followed closely by apparel/accessories (16 percent) and footwear (13 percent).
If you’re a luxury buyer, this problem is even worse. Given that luxury goods are a $316.2 billion market that could grow to $352.8 billion in 2027, according to Fortune Business Insights, counterfeiting shows no sign of waning.
In today’s world where consumers increasingly seek out “clean” products in beauty, health and food—meaning items are made without potentially harmful ingredients—apparel and fashion players face higher stakes in their battle to prevent counterfeiting.
To stay “clean,” brands must do their due diligence within the supply chain. This means both understanding the raw materials used, whether examining the source or the entire finished product, and also conveying in-depth materials information to the end consumer.
How can brands protect themselves?
The counterfeit issue can both harm brand market share and dilute a company’s reputation. So how does a brand protect its integrity and bottom line? The standard protocol for many luxury brands is to communicate to their customers that merchandise should only be purchased via authorized retailers or the brand’s own channels. However, fraud can still occur even with this type of regulation.
The most effective way to track the authenticity of a product is for each product and raw material within to have its own DNA taggant, which can be tested at any point from raw material provenance, through the supply chain and into retail. The molecular data imparted by DNA taggants cannot be replicated, altered or forged once applied to raw materials and products.
Using the platform, DNA molecular “tags” can be placed on individual fibers or materials such as leather or in the sewing thread of leather goods. These tags, when placed at the point of origin, can then be tracked and traced throughout the material’s lifecycle with different touch points throughout the process to ensure authenticity up through the point of sale.
The brand can then test virtually any product within the textile value chain, whether upon receipt from their manufacturer or returned by a shopper to the store. Leveraging either Applied DNA’s in-lab or portable testing services, the brand can identify the molecular tag to ensure product authenticity, potentially saving them from lost market share, revenue and possible irrevocable brand damage.
This tagging is especially helpful in customer returns, notably for online sales. It is common for counterfeit items to be returned to the brand in hopes of an exchange or credit towards genuine items. The brands typically have no way of confirming whether the product is authentic and thus, the item can get cycled back into retail, with the counterfeit item being unknowingly purchased by another customer. Should the item be faulty or underperform, it then reflects badly on the brand, which is unaware that a counterfeit was sold through its channels.
To ensure that a returned product is a genuine article, instead of a fake being returned for credit or exchange for a genuine article, brands could test the product’s molecular tag or thread for authenticity. Major fraud tends to happen in the return process as very few security measures can prevent this deceit.
Overall, Applied DNA’s molecular tagging solutions have tagged over 300 million pounds of cotton, and tagged more than 20 million pounds of recycled polyester. These data points are stored in a secure cloud-based database, with product origin details that all stakeholders in the value chain can access.
The bottom line
The question always comes down to the cost of investment. How much will it cost a brand or manufacturer to invest in their supply chain with new technology and completely overhaul their system and will this investment trickle down to consumer sales? The reality is that the cost of using reliable technology such as DNA tagging is pennies on the dollar when considering the long-term payoff of revenue potentially saved from counterfeiting.
However, the question that should be asked is what is the cost of not investing in brand security? Are brands willing to risk counterfeiting or low-quality materials in their supply chain, or the chance that materials they claim are sustainable or eco-friendly aren’t actually so? What is the cost of brand reputation?
Perhaps more important, brands should consider that using DNA tagging for traceability will enable complete transparency with clients and shareholders, leading to a greater buildup of trust with their end customers. Greater trust from the end consumer often translates into more revenue as well as brand loyalty—the most crucial aspect for a long-term successful brand.
Learn more about Applied DNA and its CertainT technology here.