Bad actors are exploiting the COVID-19 crisis by infiltrating the digital channels consumers now rely on. Learn how Brand Protection can provide maximum value – protecting consumers and brands – with a strategic, refocused approach.
Consumer behavior is evolving rapidly, and we should anticipate an enduring shift of purchasing habits online. The increased time spent across all digital channels exposes consumers to increased risks – a level of risk that they would not be facing when visiting physical retail stores.
Fast heading towards a new normal
The ‘new normal’, a phrase that is fast entering common parlance, is being used to describe social distancing measures and other behaviors that will likely be necessary for an extended period. But this phrase also applies to consumer buying habits and the future of e-commerce, with the pandemic likely to have a profound, permanent impact on where consumers decide to purchase the brands that they love.
While tourism has seen a huge slump, the majority of sectors have seen online sales growth as displayed below. Consumers still require the vast majority of products that they purchased pre-COVID-19 – they are just pivoting to new channels to acquire them.
The shift online will not replace offline spend across all sectors but represents a material change in consumers’ expectations of brands. We would have expected e-commerce as a share of retail in the US to drop after the usual Q4 peak, but as seen in the graph below it has continued to grow after the Q4 2019 peak through Q1 2020.
“It’s very likely that these behaviors will continue, even when the coronavirus pandemic eventually subsides. Why? Because ecommerce habits tend to form during periods of intense activity, and those habits already have momentum, they come even stickier.”
– Andrew Lipsman, eMarketer
Bad actors have reacted swiftly to the COVID-19 crisis
Counterfeiters and other bad actors are agile operators, reacting to the crisis by creating new products to meet increased demand, often as lookalike brands rather than direct counterfeits to avoid detection.
Corsearch’s Brand Protection platform, discovered 20,000 units of counterfeit sanitizer sold on 1 Alibaba listing in a month, almost all sold to the US.
Brands otherwise unrelated to COVID-19 and hygiene are equally targeted by bad actors intending to capitalize on increased demand for hygiene goods, such as these fake face masks seen below.
Bad actors have also increased supply of genuine critical medicines in line with news events and are selling at vastly inflated prices; supply has increased as the lockdown has endured. Corsearch has monitored high-risk listings in the US for a painkiller brand between February and April. See the below graph that illustrates this disturbing trend in the US and maps it against key milestones during the crisis.
Price gouging has been rampant throughout the crisis, with standard packs of painkillers such as the brand monitored above sold for up to US$999.
As expected, bad actors have adapted their behavior to avoid traditional detection techniques in the way they list products and the way they utilize digital channels. Businesses need to keep up if they are to protect their consumers and digital revenues.
All types of online brand abuse are on the rise
Brands are seeing ‘traditional’ types of online brand abuse increase, regardless of whether the product’s design or description can be linked to COVID-19.
Listings for non-genuine goods have increased for a wide range of products unrelated to hygiene as counterfeiters look to capitalize on increased online shopping. Since December 2019, for example, Corsearch’s Brand Protection Platform software has detected:
- A 94% increase in non-genuine listings of home appliance products & spare parts since December 2019
- A 51% increase in non-genuine listings of sporting goods and running shoes since December 2019
- A 45% increase in non-genuine listings of high-end, luxury shoes since December 2019
Consumer trust is under threat in the long term
On April 29, Corsearch polled 87 business decision makers and Brand Protection professionals, asking about what they perceived to be the biggest risk to their businesses due to COVID-19 – over 45% said the risk to consumer trust and the consumer to brand relationship. This highlights that they are recognizing the risk that the shift in market dynamic has created.
Criminal activity that damages consumer trust online, such as phishing schemes and financial scams, is now being seen as a critical issue facing businesses. We are seeing businesses that would not traditionally face high volumes of online scams using their brand and IP now entering the crosshairs of online criminals.
Take Morrisons, a leading UK grocery store, for example. During the initial stockpiling period of the crisis, Corsearch analysts discovered a phishing scheme targeting Morrisons’ customers that posed as an online competition to win unlimited groceries. The linked website asked consumers to enter their personal details and was connected to multiple social media pages and accounts, including a Facebook page. The latter accrued over 5.9k followers before it was eventually removed by the platform.
Counterfeiters have responded rapidly to increased demand for many categories and will react to future changes in consumer behavior. There has been a significant increase in all forms of brand abuse that threaten consumers’ trust in brands – businesses need to maintain the valuable relationships they have built through omnichannel touchpoints over a long period of time.
Build the internal case for Brand Protection
Those responsible for protecting consumers should take focus on three key actions that will support awareness and effectiveness in the current climate and beyond.
- Build internal coalition
Build working groups including ecommerce, marketing & security across function and ensure all relevant parties are engaged & aligned
- Communicate to senior leadership
Proactively report value & risks to senior leadership around business outcomes: customer safety, revenue & trust
- Articulate the full business value of brand protection
Where budgets are under pressure or increased investment is needed, it is critical that the full value of brand protection is understood.
Strategic initiatives for your Brand Protection program
With the huge challenges facing all businesses – bricks & mortar retail channels shutting down, workforces operating remotely, and the furloughing of staff – consumer trust in digital channels is critical to survival. There has never been a more important time to protect your brand and consumers online.
In the same poll of business decision makers and Brand Protection professionals, we asked whether their business had altered strategy in the face of changing consumer behavior – over 85% said they had already made changes or were planning to, and only 1% stated they did not plan to make any changes.
The blueprint for Brand Protection success will vary by business and sector, but there are five key levers for actions you should be taking:
1. Align with key sales channels to capture online revenue
Align Brand Protection strategies with ecommerce to focus on key products, territories & platforms
2. Prioritize in line with consumer behavior to protect trust
Focus enforcement on what the consumer sees & buys – prioritize to listing spots & owning key social channels
3. Re-allocate resources from offline to online
Leverage offline budgets to increase online focus. If not possible, consider pooling budgets with other functions
4. Ensure that COVID-19 related threats are addressed as critical business issues
Reputational risk is significant & these issues should be flagged to senior leadership and mitigated rapidly
5. Review monitoring approach to address evolving infringer behavior
Ensure your solution captures threats such as lookalikes and techniques such as hiding text in images
Find out how you can make your brand more resilient during the COVID-19 crisis with our Brand Protection Action Plan
Corsearch can help you successfully navigate this period of uncertainty and enact the strategic levers outlined. Learn more about our sophisticated Brand Protection platform and managed service with a customized technology demo, or talk to one of our experts to find out more about how we can help you capture additional e-commerce revenues while protecting your customers from digital risk.
This blog was originally published on the Incopro website.