Innovation in the packaging industry is happening at unprecedented speeds. Next week in Chicago at Pack Expo, innovation will be front and center as the industry gathers for the first all in-person event in four years.
With the theme of innovation in mind, in this blog, we examine two groundbreaking technologies to see how they stack up against counterfeiting. The onslaught of counterfeit products in the market has compelled brands to turn to security labeling technologies to protect their products. However, the technologies vary in protection performance.
Holograms are extremely popular. They are utilized by sporting goods companies, high-end fashion products, and credit cards. Holograms’ eye-catching shifting colors and changing images are great for attracting consumers’ attention.
So, what exactly is a hologram? A hologram is a three-dimensional image formed on a film or other surface. Any image can be turned into a hologram. Some labels have a generic background image or a product or company name. For example, take a look at your Mastercard credit card, and you will see a holographic image that says Mastercard or of a dove or eagle with color-shifting properties.
The projection for global growth in ecommerce is about 12.7% through 2025. In 2022 this growth will account for an estimated $5.545 Trillion. The dark side of ecommerce growth is that counterfeiting has also flourished. Counterfeiting is expected to exceed $3 Trillion in 2022, including online and in-store purchases.
While a hologram can identify a brand, it cannot effectively protect a brand. Holograms can provide overt security features by which consumers identify a specific product or brand. Unfortunately, holograms must be combined with additional features such as micro-text, UV-sensitive, or other specialty inks. These added features require either special equipment to read the covert technology or trained staff to find it. In either case, this detective work requires additional expenses for brand owners. The cost for the trained policing force and specialty equipment may equal or exceed the cost of the counterfeiting problem.
Holograms are designed to be difficult to copy. There is no question the trained eye can tell the difference between a genuine hologram and a fake. But what about the average consumer? Some consumers see a hologram and believe the product must be genuine because there is a hologram on the package. Regrettably, this is not always the case.
Additionally, brand owners implement holograms for an entire product line rather than for each individual item in the product line, which makes items impossible to track.
With the increase in ecommerce and the rise in fake goods, counterfeiting has become quite lucrative thus counterfeiters have become more sophisticated. Replicating a hologram, although not simple, is possible.
The best brand protection is with 100% unique and random marking technology combining overt and covert security in plain sight. A smart label creates consumer interaction and allows instant product authentication. With an intelligent label, the consumer can scan the label using a mobile device to determine if the product is authentic. This can be done before the purchase or once the product is received via courier. This method enables consumers to police counterfeiting. A smart label also allows the brand owner to track the product within their supply/sales channels to the consumer.
The markings on an intelligent label are 100% random. Each label is serialized and has a unique design, so there are no static images to replicate. As a result, even the most sophisticated counterfeiter will not attempt to create a single fake label at the item level. Because there is no special equipment to purchase or policing force needed to authenticate a product, intelligent labels also significantly reduce the cost of brand protection.
Unlike a hologram, smart labels can be integrated with a track and trace system, from which the brand owner can derive even more benefits. The system allows tracking of items throughout the supply chain. The data collected from intelligent labels are accessible via the cloud and can identify customer and market trends as well as provide an early warning of counterfeited and diverted products.
A smart label provides several advantages over a hologram, particularly the capability to place unique and distinct overt and covert marks that can be authenticated using mobile devices. An intelligent label also lowers the cost of counterfeit protection and engages the consumer.