By Jan-Maarten Laurijssen, Co-Founder & Chief Operating Officer at Pointer Brand Protection
In a post last week, we discussed some of 2019’s biggest news stories in the world of intellectual property, brand protection and anti-counterfeiting. As important as it is to reflect though, the end of the year is also the moment to consider some of the key trends for 2020 and the new decade beyond. We certainly expect to hear more about the implications of the US-China trade talks and the EU Copyright Directive, but what other trends and stories may be important for brands and how they protect themselves from IP infringement in 2020?
The Impact of Millennial and Gen Z Consumption Habits
While a generation of Millennials (those born between 1981 and 1996) were exposed to the growth of the internet during their youth, the generation which has followed them, Gen Z (born between 1997 and 2010), has grown up with tech fundamentally shaping their existence. Over the next few years, the two generations are projected to become the biggest sources of all consumer activity, meaning that brands and brand protection analysts must understand how their attitudes to IP, along with their consumption habits, differ from previous generations.
Current thinking suggests that for the Gen Z cohort, ethical behaviour and authenticity are defining characteristics. According to one study by the International Trademark Association (INTA), 85% of Gen Z think that brands should have an ethical dimension, while a further 93% have respect for other people’s creations. While this is not to suggest that this generation do not buy counterfeits, it does open possibilities for the forms of public messaging which could be effective. Brands can demonstrate their environmental and humanitarian credentials in ways that the black market cannot, something which should be of note going into the next decade.
A broad category, but 2020 may well be the year when many businesses move from a period of experimenting with new tech into broader implementation. The scope of AI and machine learning looks set to increase in 2020, a development which will affect the interactions brands have with consumers and counterfeiters.
It appears likely that the sophistication of conversational AI interactions will improve, resulting in enhanced communication between businesses and consumers. If these conversational nodes can be targeted towards educational behaviors then this may improve buying patterns. Elsewhere, machine learning will become more advanced in terms of image recognition and matching, data clustering, and web scraping, meaning that data monitoring and IP enforcement will benefit even more from automation which allows machines to fight the fakes in addition to human expertise. We hope that the early promise of Amazon’s Project Zero, which purportedly will rely on AI to scan their 5 billion daily listings for counterfeits, will start to bear fruit.
Blockchain and its use in anti-counterfeiting may be another key area of growth. We have already seen numerous brands take up the challenge of protecting their supply chain through scannable, traceable near-field communication chips (NFCs), but the cost and infrastructure required have proved prohibitive for some. As the technology becomes cheaper, we expect to see it rolled out to many more businesses. Similarly, widescale adoption of a distributed digital ledger system will allow online marketplaces such as Alibaba and Amazon to make good on the promises they have made to explore the possibilities of blockchain to fight fakes.
Eco-Consciousness and Counterfeits
In recent years, many legitimate brands have shifted towards more eco-friendly products. This has reflected the increased public concern about climate change, with the result that companies such as TOMS and Patagonia have invested heavily in local sourcing, sustainability, and eco-friendly materials. In the case of TOMS, their shoes and shoeboxes are made from sustainable, recyclable, vegan materials. So, while many people may argue that not enough is being done at a commercial level to combat climate change, initiatives such as this indicate that things are moving in the right direction.
Unfortunately, however, these brands are also targeted by counterfeiters who are subject to no scrutiny and no regulation. A genuine pair of TOMS using sustainable materials may retail for in excess of $40, while potentially counterfeit examples can be found on Asian marketplaces for just over $5. It seems unlikely that these cheaper versions are made to the same eco-friendly standards.
As mentioned above, Gen Z consumers are about to become more dominant in global consumption, so their attitudes towards both counterfeiting and ecology are important. Research indicates that this generation is more concerned about the future of the earth and will demand products which reflect this. We expect that in 2020 this will become a bigger part of the conversation around counterfeits and IP infringement too. We expect to see more messaging around this issue from enforcement agencies and commercial enterprises; positive communication can show why people should buy genuine, negative can show the effects of not doing so. We expect online platforms will also take up this challenge and will do more to combat counterfeiting on the basis that it also improves their ethical status.
Social Media Expansion; WeChat, TikTok and Beyond
For a long time, online marketplaces and domains have dominated the conversation about the availability of counterfeit and grey trade goods. These platforms have been the easiest way for consumers to shop, and, in many cases, they have also created spaces where sellers of counterfeit goods could anonymize their identities. As online platforms become more pressured into applying rules of transparency, however, we expect to see even more sellers turn to social media in a bid to preserve their trade. It’s certainly a process which has already begun, but 2020 looks set for expansions down new avenues.
Previously, social media platforms such as Facebook and Twitter were a secondary thought for counterfeiters and parallel goods traders, yet with the introduction of more social commerce-oriented extensions such as Facebook Marketplace, they have grown in importance. Social media channels are notoriously difficult for law enforcement to target because communications are private, there are no ID transparency rules, and accounts can be set up using false information. This makes it even more important that brands enlist the support of a specialized partner in providing online monitoring and enforcement, which we expect to see much more of in 2020.
Another thing to watch will be the growth of platforms outside of those which are big solely in the West. Spaces such as TikTok and WeChat are already massively important in Asia, and their size and scope looks set to increase next year. Earlier in 2019, our own Schiphol Airport here in Amsterdam became the first European airport to enable WeChat payment services for Chinese passengers, reflecting the huge growth of the platform and the future importance of its one billion plus users. As counterfeits and IP abuse is common on WeChat and other non-Western channels too, brands need to further consider how they can be dealt with.
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