Haute tech: innovations made to protect designer goods

Words by
Simon Brooke

6th January 2017

As the sales of counterfeit products continue to rise, luxury brands are turning to technology to tag their designs in an effort to deter fake knock-offs

If you bought a piece from this year’s Spring/Summer Moncler collection, you’ll find that you’ve received a little extra something with your purchase that you didn’t bargain for. Don’t get too excited, though — it’s just a microchip. 

However unglamorous this might sound, the good news is that the tiny piece of technology is there for a good reason — and it’s bang on trend. For the past few years the Franco-Italian brand, famous for its quilted jackets and blazers, has been increasingly concerned, like others in the luxury sector, about counterfeiting.

In July last year, the European Commission reported that lost sales, due to fake clothes and accessories, amounted to 10 per cent of the luxury industry’s revenue in Europe.

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To combat this, Moncler is now including RFID (Radio Frequency Identification) chips in its products. Armed with this technology as well as QRcode and a Near Field Communication (NFC) tag, customers can visit code.moncler.com to check that their purchases are genuine. 

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Brands such as Hublot are taking preventative measures against counterfeiters

Brands such as Hublot are taking preventative measures against counterfeiters

A growing number of luxury companies are looking to other types of cutting-edge technology to verify their bona fide products and to counter the growing sale in fakes.

“The parallel market is huge and it has increased as more luxury companies have been outsourcing production — in some cases these producers will create more of a product than the brand contracted them to produce and then they’ll sell off the excess themselves,” says Greg Furman, CEO of the Luxury Marketing Council.

Luxury customers are also more likely now to sell items they don’t want any more online, so there are more luxury products available on the web that can’t be verified. Technology has, in part, created this problem and now it’s being asked to help solve it.

Salvatore Ferragamo is also embedding RFID tags into its bags and shoes. These tags will track the item, giving the group better control in the fight against fakes, it says. Watch company Hublot is reportedly using what are known as digital certificates — electronic passports that convey information about a product via the internet — to verify its watches. 

Luxury whisky brand Johnnie Walker Blue Label is working with a company called Thinfilm to produce a “smart bottle” ­— used on its Winter Edition 2016 whisky — that features slim electronic sensors. These can be used to show where the bottle is in the supply chain and whether it has been opened before the customer has bought it. Customers can scan a bottle with their smartphones and Johnnie Walker can send them information.

Belstaff has started working with MarkMonitor, a company that scans the internet using search terms that will turn up counterfeit items on websites, social media platforms and mobile apps. The company then informs the retailer that it has traced counterfeit goods to its site. MarkMonitor claims to have eliminated hundreds of thousands of fake goods listings every week.

“Luxury brands are highly vulnerable to online attacks, which can severely undermine marketing investments and put brand reputation, customer trust and revenues at risk,” says Charlie Abrahams, senior vice president at MarkMonitor. “These attacks make unauthorised use of trademarks in deceitful paid search ads, URLs, misleading websites, mobile apps and spam email in order to divert traffic to competing or even illicit sites. 

Pay-per-click scams and SEO manipulation all enable likely fraudsters to claim affiliation where none exists, link legitimate brands with undesirable content or steer consumers to sales of unauthorised, pirated and often counterfeit goods.”

The technology uses sophisticated detection algorithms, including photo detection, graphics recognition and scoring technology, to scan millions of web pages, social media sites and mobile app stores, plus eCommerce and auction sites, to identify potential brand abuse.

Moncler-Man
Moncler is now including RFID chips in its products

Moncler is now including RFID chips in its products

“We’ve been going after counterfeiters  pretty aggressively,” says Gavin Haig, CEO of Belstaff. “We’ve closed more than 2,000 sites and 350 social media profiles such as Facebook and eBay. We discovered that around 800 sites were run by one Chinese man alone,” says Haig. 

“We’re sending a strong message about our determination to fight counterfeit goods to consumers on our own platform and in after-sales care, as well as promoting it in the media. It’s a message that we want customers to share with others. Luxury brands need to support each other.”

Launched last year, the Coalition Against Illicit Trade (CAIT) represents companies that use technology to fight against counterfeit and contraband goods. “The luxury market is a massive target for those in counterfeiting,” says Craig Stobie, Director Global Sector Management & Development at labelling company Domino and one of CAIT’s founding members. He is a fan of what are called “open standards,” in security technology.

“The advantage of using open standards is that anyone can access them,” he says. “You might have a very sophisticated tag, but it would probably require a special device to read it. It’s easier if consumers have a code that they can check themselves as this opens up the process to more participants.

For instance, you might be able to scan something with your phone. There’s also a place for covert technology that only the brand themselves can have access to. This is called asymmetric obfuscation cryptography.”

Arjo Solutions works with what it describes as “some of most famous luxury brands in Europe,” in particular, perfume and cosmetics companies, with more approaching it all the time.

“They’re looking for security in the supply chain,” says Herlé Carn, Brand Protection Director at Arjo Solutions. As well as security tags and marks that can be used with an electronic reader the company also creates secret security technology, based on the forensic make-up of a product or its packaging.

“While they are on the production line, items are scanned to procure an accurate digital characterisation of the product’s unique surface. Products and documents are therefore innately secured. Our secure software 
then enables the creation of a unique digital identity, called the 
Signoptic™ Signature,” says Carn.

Irina-Shayk-for-SOLARIN
The Solarin smartphone from Switzerland's Sirin Labs uses military grade encryption technology to deliver a highly sophisticated level of security

The Solarin smartphone from Switzerland's Sirin Labs uses military grade encryption technology to deliver a highly sophisticated level of security

These unique signatures are added to a database and the specific details used to create a code, similar to a fingerprint, to uniquely identify a particular product. It can then be traced and authenticated using the code and a special reader. 

A product that doesn’t have the code can be regarded as either fake or as smuggled. But it’s not just manufacturers of luxury products that are looking to technologies to protect themselves and their customers. This summer saw the launch of the Sirin Labs Solarin, an ultra high-end mobile phone that uses military grade encryption technology.

Luxury brands are vulnerable to online attacks, which can put brand reputation, customer trust and revenues at risk

Coutts, the bank of choice for hundreds of thousands of high-net-worth individuals is aware that not only its clients’ wealth, but its particular profile makes it a target for fraudsters. The bank has recently begun to use biometrics, in other words metrics that relate to human characteristics and behaviour. 

“I could log in with your correct user name and password, but because 
we have a database of information that is unique to you, such as how and when you normally log in, even the way in which you type in those log-in details, the system can tell that I’m not you and so it’ll deny access,” explains Joe Norburn, Head of Digital at Coutts.

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Belstaff have taken an aggressive approach against counterfeiters

Belstaff have taken an aggressive approach against counterfeiters

Brands taking preventative measures against counterfeiters - Belstaff

Although it naturally has to be tight-lipped about much of its security procedures, Coutts is using technology such as big data (millions of bits of information about each individual person gleaned from all over the web) and artificial intelligence (computers teaching themselves) to create more sophisticated online protection for its affluent clientele. 

Later this year it will launch a sophisticated update of the random-number-generating device that many customers use for online banking.

Norburn is aware that combating fraud affects more than the bank’s profit and loss sheet. “The prize of thwarting fraudsters with technology is much bigger — it’s about developing a better, more trusting relationship with the customer.” That’s something every luxury brand should remember.