The competitive landscape is evolving in front of our eyes. U.S. eCommerce is projected to grow to 8 to 12 percent in 2017, while global eCommerce is projected to grow 21.2 percent this year. Consumer expectations have changed, as they have more choices, more information at their fingertips, and can easily comparison shop. It’s no surprise that the growth of eCommerce and online transparency have increased pressure on retailers to be more competitive, causing brands to lose control of their products online.
Last week, Quad’s VP of Strategic Accounts, Raaid Hossain, and Whitney Gibson, Partner and Chair of the intellectual property and technology protection group at Vorys, held a webinar to provide brands with the tools they need to improve their performance in such a competitive space. Raaid and Whitney discussed the changing marketplace and how brands are being affected by the growth of third-party sellers. Here’s a quick recap of topics covered in the webinar.
Controlling Your Online Brand Image
Brands do not dictate their own brand perception; brand perception is owned by consumers. Today’s consumers have many channels where they can interact with brands – a single bad interaction can tarnish their perception. For example, a bad review of a product on Amazon can easily deter other shoppers from buying it in the future. With the increasing number of selling channels available, there’s an increased probability of challenges.
It’s crucial for brands to provide consistency throughout all their channels, but at a large scale it can be hard to monitor. Traditional methods fail due to the high transparency for consumers but lack of visibility for brands. Brands may not catch small third party and gray market sellers who can be harming them.
Brands must evolve with the changing landscape. Tactics to consider to protect your brand include tracking online ratings and reviews, and controlling your image online through proactive monitoring. This can be difficult and time consuming to do manually. The more that brands can automate these processes, the better they’ll be able to control their online brand image.
To protect your brand’s image, merchandising audits are important to execute. To successfully conduct merchandising audits, brands must ensure they take into account merchandising, pricing, and promotional compliance. To scale in-store merchandising audits, brands can use modern offline data collection through crowd sourcing intelligence from smartphone-enabled shoppers. In an online setting, customers look to pictures, product descriptions, and customer reviews to experience the product; all of these elements must be checked in your online merchandising audits.
Now brands must create a seamless omnichannel integration between the online and in store experience. Online customers cannot see, touch, or smell a product and therefore the overall experience is very different than in-store. Additionally, when it comes to online channels, price is very transparent so customers can easily search for the lowest price product. Because of this, it’s essential for brands to ensure resellers are complying with their brand policies by implementing more technologically advanced processes to allow them to scale and automate brand protection.
Monitoring and Enforcing Pricing Policies
A huge factor that impacts a brand’s online image is the price at which its products are selling for. For example, if a Michael Kors bag is selling far below the brand’s MAP, the brand perception takes a hit and no longer seems as luxurious. On average products in violation of MAP are priced 14.5 percent below MAP. Traditional methods of monitoring and enforcing pricing policies fail because the manual process is tedious, costly, time consuming, and not fast enough to catch violators in real-time.
Again, we turn to technology because it is scalable, can be automated, and can provide evidence such as screenshots. Constantly monitoring the market is important to catch violators in the act and put an end to MAP violations which will in turn protect your brand’s image.
Identifying and Protecting Your Brand Against Gray Market Sellers
Unauthorized sellers (also known as gray market sellers) may also be selling your products through third-party marketplaces or on their own web store. Unauthorized online sellers often think no one can find them and that they can continue selling products below MAP; in fact, 53 percent of unauthorized retailers sell below MAP!
To protect your brand, it is important to create a system for online seller enforcement. Once you find unauthorized sellers, you must cut off their source, and they can be warned to stop selling your products with a cease and desist letter containing trademark claims. If this isn’t effective, you can draft a complaint, and in worse case scenario, you can pursue legal enforcement. At the same time, you want to put measures in place to protect yourself upfront, such as stipulating in your Authorized Reseller Policy that they are not allowed to sell on marketplaces, where the price competition is fierce and violations are rampant.
With the growth of eCommerce, online transparency has made the competition fiercer than ever, and brands need to adapt their brand protection strategies quickly to stay ahead of the game. Automating online brand protection is an effective and quick way for brands to monitor all their online channels. If you’d like to learn more about what we discussed in our webinar, here’s a link to the recording.