Brands use security labels to verify the authenticity and integrity of their products across the supply chain, from manufacturing to consumers. They are key to ensuring that products are genuine and haven’t been tampered with before use.
Threats from the counterfeit market are widespread and difficult for brands to avoid. 50 out of 96 product categories are now affected by fakes, according to the Organisation for Economic Co-operation and Development, and fakes account for over 2% of global trade.
Your customers want to know whether they have a dupe or a tainted product in their hands, and your brand is inextricably linked to their experience — setting expectations that start with the label you choose.
A strong brand tells customers what to expect from a product. But problems arise when others attempt to co-opt your company’s hard-won reputation by applying your brand (or elements of it) to their products.
At a Glance: Security Labels Are Your Brand’s First Line of Defense
Counterfeiting and gray market diversion are growing threats across nearly every product category. Security labels give manufacturers a powerful, cost-effective tool to verify product authenticity, protect consumers, and maintain brand integrity throughout the supply chain.
Key Takeaways:
- Counterfeit products can damage the reputation of a brand, and although counterfeits are rampant across most product categories, security labels can make products harder to copy.
- Tamper-evident labels signal to consumers and distributors when a product has been opened or compromised.
- Track-and-trace technology helps brands monitor their supply chain and detect unauthorized gray market diversion.
- Serialization gives every product a unique identifier, forming the foundation of most brand protection programs.
- The right security label strategy balances genuine risk with cost; not every product needs every feature.
Why Are Brand Protection Labels More Important Than Ever?
Particularly in a challenging global economy, and one where technology like 3D printing and AI can deceive consumers more than ever, there is a growing need for brand protection. Taking steps to mitigate counterfeiting ensures that product revenue goes to legitimate players, while shielding consumers from harm and the impacts of deception.
Experienced companies have always jealously guarded their brands. But many aspects of the modern marketplace also present challenges for brand protection:
- Black market counterfeit products are sold every day on countless e-commerce sites.
- An equally large problem exists with gray market sellers offering branded products that they are not properly authorized to sell.
- Convenient shipping and easy electronic communications have made it easier to move products to markets for which they weren’t intended.
- Nefarious individuals and organizations can set up spoof websites and social media accounts to mimic a brand online and mislead customers.
- Printing technology allows counterfeiters to replicate packaging and labels with higher fidelity than ever before.
- Artificial intelligence tools can generate convincing counterfeit brand assets — logos, product imagery, and even customer communications — at a scale and speed that was unimaginable just a few years ago.
Counterfeit goods may cost the global economy as much as a quarter-trillion dollars. And it’s not just handbags and fragrances that are being copied: Makers of food and beverages, electronics, and — perhaps most troublingly — pharmaceuticals are increasingly falling victim to counterfeiters. Each time a counterfeit product is sold, the original company’s reputation erodes, and its brand weakens just a little bit more.
Sales on the so-called “gray market” can also lessen a company’s trustworthiness and revenue. Gray market sales occur when products are diverted from their intended distribution channels. For example, products bound for South America may be redirected to North America, where an unauthorized reseller can undercut authorized resellers on price.
Gray market activity can hurt a company’s brand because it prevents the company from controlling where and to whom its products are sold. When a product is sold into an unintended market, warranties, usage instructions, and regulatory compliance can be jeopardized.
How Do Security Labels Help with Brand Protection?
Security labels use a combination of overt and covert features that indicate to consumers and the rest of the supply chain the legitimacy and safety of products, while protecting the brand’s image.
Your brand’s reputation touches every part of your operation, and the efficacy of your security label is no exception. A comprehensive brand protection plan can include tactics like trademarking and patenting. As label printing experts, we’ll focus on the ways you can use security label technology to protect your brand, especially from counterfeiting and the gray market.
Security labels draw on an arsenal of hidden and obvious features to help brands uphold the integrity of their products throughout the supply chain, including:
- Overt features (holograms, color-shifting ink)
- Covert features (microprinting, invisible ink)
- Digital features (serialization, QR, RFID)
They also help customers verify the authenticity of their purchases.
What Kind of Label Security Features Do You Need to Protect Your Brand?
The security label you choose should align with the reasons you’re working to protect your brand in the first place. For instance, you may not need tamper-evident features for products where the chain of custody is trusted, like a pill bottle that goes straight from a pharmacist to a patient.
A “kitchen sink” approach may be reassuring, but as with every business decision, you must balance cost with genuine need. Many technologies can serve multiple purposes; an expert in label printing and brand protection can help you choose security features that fit your budget while countering those who would subvert your brand.
For a deeper understanding, here’s what your brand protection expert might recommend and what they mean:
- Serialization, which provides a unique identifier for each item in a brand protection program, is almost always the starting point.
- Color-shifting ink, which looks different from different angles. These effects sometimes require a tool or device and can be difficult to reproduce.
- Track and trace technology, such as RFID, GPS, and barcodes, can carry unique brand identification information and help you track your inventory.
- 2D barcodes, such as Data Matrix, increase data capacity and complexity useful for appropriate brand protection programs while QR codes can engage a brand’s consumers in their security efforts.
- Microprint and “invisible” printing, in which words or other markings are printed either too small for the naked eye to read or with inks that become visible only under specific conditions.
- Specialty technologies, such as holography, lens effects, and diffraction. The best of these optically variable devices (OVDs) are so detailed and intricate that even the most adept counterfeiter will not succeed in copying them.
- Tamper-evident features that make it apparent when a label has been removed or when packaging has been opened.
How Do Brand Protection Labels Help Me Own My Brand?
Your brand label is one of the clearest ways you can own your brand by showcasing your authenticity and throwing off copycats. Distinguish your real product from the rest in ways that align with your brand, adding complexity like holographics — or more subtle features, like a unique varnish — can achieve similar brand protection results.
If your company has been around a while, your brand may be the result of years of customer experiences, marketing experiments, and product improvements. If you’re launching a new product, your brand may be the thing that sets you apart from competitors. Either way, the strength of your brand is critical to your company’s success.
The stakes for protecting your brand have never been higher. Get a security label recommendation based on your product environment by talking to an expert today.
By: Lori Campbell, President
Lori Campbell is President of The Label Printers and a recognized leader in the printing industry, with more than 40 years of experience in sales leadership, operations, and strategic growth.
Since joining the company in 1982, she has advanced through roles across the organization, gaining a comprehensive understanding of customer needs, production, and business management. Appointed President in 2018, she helps oversee the company's strategic direction and long-term performance.
Lori has been a frequent speaker at industry events and served 14 years on the Board of Directors of TLMI, the leading trade association for the industry. She holds a Bachelor of Arts in Political Science from Eastern Illinois University.