NFC for Luxury Brand Strategy: Fight Counterfeit and Market Effectively
Last Updated: May 14, 2020
The global luxury market, which includes fashion, jewelry, cosmetics, cars, and jets have constantly increased its value for many years. According to Statista, the value of the personal luxury goods market globally is worth 281 billion EUR.
On the other hand, luxury brands have a large-scale demand, which has trickled into illicit markets with lookalikes and duplicate products – fake Gucci handbags, Bobbi Brown creams, and iPhone lookalikes are sold openly.
RFID-NFC is a pathway that gives brands more ways to strengthen the brand, streamline operations, and connect with customers to increase revenue and protect the brand. The technology also helps in marketing the products in the digital age.
Popular brands such as McLaren, Johnny Walker, and Pinko have implemented NFC tags to build a strong marketing strategy and fight counterfeit at the same time.
3 renowned labels using NFC
Bottega Veneta, a luxury Italian brand known for its handbags and accessories, leveraged NFC tags and RFID to streamline its operations that could be traced and digitally authenticated. As a result, it instilled a sense of trust in its customers.
Here are a few other brands that used NFC for their products and services, helping their strategic growth in branding and marketing –
1. Burberry introduces NFC tags in its clothing and flagship stores
NFC for fashion, or in other words, wearable technology is now a trend.
In September 2012, British luxury brand Burberry rolled out tech-enabled stores, which features interactive mirrors that react to garments with RFID tags sewn in.
The primary purpose of the usage of NFC tags and RFID is to assist with stock and quality control, while also enhancing the customer experience. These two technologies help customers to view bespoke multimedia content specific to products and services at in-store display screens.
For instance, a customer trying on a Burberry coat with the RFID tag can walk up to an interactive mirror and be met with a video of its origin, a clip from the runway, and even how it was made.
Burberry has also given its customers the option to deactivate the chip in select stores.
2. The prestigious Golden Globe is now digitally authenticated with NFC
According to Lars Hansson, VP Executive Creative Director, RGA, explained, “The awards are high profile and are noticed by so many people that it can put them at risk of counterfeiting. We used this technology to ensure that each award is truly authentic and unique by integrating NFC chips with DIGISEQ to improve the security of the award.”
Upon tapping the trophy with a smartphone, an RSA-based authentication of the award’s source is shown with its details to verify the authenticity.
Selling and marketing strategies for luxury brands around NFC tags
Luxury brands do not follow the usual protocols of branding and selling strategies. None of us remember watching an advert on our TV for a Gucci handbag or the latest Lamborghini model. Why is that?
High-end luxury brands can connect better with their customers, cultivate loyalty, and reward exclusivity by incorporating marketing methods.
Here are a few selling and marketing strategies luxury brands follow around NFC tags –
1. Switch to digital
Most brands these days use an omnichannel brand strategy that not only meets their customers’ expectations but also connects with valuable users.
Luxury brands should definitely not overlook the impact of social media and other digital channels on their marketing strategy.
Technologies like NFC tags help brands and customers to engage in real-time, thus connecting the offline world to the online world. Social media houses such as Instagram, Twitter, and Pinterest are natural channels for luxury brands to showcase products.
Embedding NFC tags on the products can help shoppers to connect with the brand digitally and be a part of the brand’s tailor-made adverts, looks, and events to connect with, thus resulting in quality leads.
Luxury brands have always invested in ecosystems to allow their customers to feel the brand’s cachet and build a strong emotional connection.
Viktor & Rolf built an upside-down store in Milan to proclaim their anarchic approach to design, while Abercrombie & Fitch elevated mainstream preppy clothing and dressed it up as a night-club experience.
While indulging in these experiences, make use of NFC tags to communicate with the customers post-purchase to alert them of such events when they tap on the product. At the event, turn these NFC tags into exclusive RSVP invitations.
Placing the brand into a carefully crafted space and inviting customers is a powerful way to communicate.
4. Make it special
As most luxury brands have moved to the mass market model, high street premium brands need to stand out by ensuring the highest level of quality available in the marketplace.
Carve the customer’s name on the back of the dial of a watch, or give them a free charm featuring their name with a piece of jewelry or handbag to let them know that their purchase is valued.
Small gestures such as these can help in building a loyal customer following.
Luxury brands typically consist of insiders and regular shoppers who follow the brand closely, purchasing items at a timely interval. Create a special experience for them via NFC on the products to keep them engaged.
Luxury brands can increase revenue as much as 40% by incorporating these strategies and putting a luxury spin for each for the most effective results.
Counterfeit goods substantially decrease the company’s profits because of what rookie manufacturers sell is not directly related to the original product. This means that there is a direct steal of revenues from brands.
One of the many reasons why luxury brands’ products are preferred is because of their individualism and uniqueness. Luxury brands’ products give rise to lookalikes and doppelgangers in several high-street brands.
When original items are ripped off, the brand suffers losses directly related to their revenue and brand reputation.
Embedded NFC tags help in authenticating a product, help check its origin, and also promotes a relationship between a brand and its users. NFC for luxury brands guarantees the integrity of the product and authenticates its original identity.
How does it help?
As each tag contains a Unique Identification (UID), it can also store information for product authenticity. A user can easily identify the genuineness of the product with a simple tap of their smartphone.
#2 Enhance customer engagement and loyalty
An NFC tag has the capability to directly engage with the user when it is incorporated into a package or inside an item. The product becomes an engaging channel that allows brands to communicate with their users before, during and after-sale.
With just a quick tap from an NFC-enabled smartphone, users can unlock engaging multimedia content such as open a website, launch an app, or even play a game.
For instance, let’s say a luxury clothing brand has embedded an NFC tag in their line of jeans. Every time the customer taps the NFC, they can be directed to a landing page with exciting offers and programs.
When the customer taps the NFC, they may be invited to an exclusive members-only fashion show unveiling their new collection or sign up for a new product reveal.
Customers can receive product information and enjoy other benefits while brands can benefit from increased sales and brand loyalty with enhanced customer experience.
As soon as the product arrives on the retail shelf, consumer interactions can become a part of a brand’s marketing strategy. Every time an NFC tag is read by a shopper to either check its authenticity or access information, the transaction can be stored.
The resulting data can ultimately help brands quantify interest and learn more about consumer buying behavior.
Post-purchase, consumers can opt to engage further with opt-in profiles, loyalty programs, games, and other personalized services.
Over time, these user interactions can result in valuable insights about product usage and performance, individual preferences, and brand loyalty.
With NFC tags, brands can gauge the effectiveness of each operational process via cloud-based data, in real-time.
Minute details such as when, what, who, and where of each transaction can be created to have a detailed history of each tagged product’s movement through manufacturing, distribution, and retail outlets.
Serialized tracking at every point, at the item level and shipment level, makes it easier to detect gray markets and its end journey. Digital authentication with NFC tags helps combat counterfeits.
Products equipped with NFC tags help optimize inventory visibility, ensure the product is always in stock, and also helps retailers stay ahead with timely replenishments.
#5 Hyper-personalization to deliver the right strategy
Personalization accounts for a brand’s vital part of their marketing funnel. Luxury brands target a specific demographic that is keenly interested in receiving personalized goodies, invitations, and other offers to keep them interested.
NFC tags are the right tool for that. NFC tags bridge the physical world with the digital world, thereby, presenting the opportunity to engage with users correctly.
Leverage NFC tags to send out a personalized high-tea party located in a posh cafe based on the consumers’ interaction levels.
The biggest brands are already shifting their focus to digital for a better reach to their customers including Gucci, Saint Laurent, and BMW.
NFC for luxury brands is the right fit for curbing counterfeit
From cosmetic stores to luxury boutiques, brands have witnessed significant changes throughout the last couple of years.
Luxury brands, especially fashion and lifestyle brands, are a hotbed for innovations and emerging technologies involving NFC tags, RFID, artificial intelligence, and augmented reality to name a few.
The global counterfeit market is slowly growing to be hazardous. Technologies such as NFC and RFID for luxury brands are the right fit to fight counterfeit and piracy.
As NFC is being integrated into every consumer product including wine bottles, cars, and even gourmet products, it will help protect brands. At the same time, it also delivers new value for manufacturers with increased brand engagement, brand awareness, and customer loyalty.
As the world continues to sail through uncertainty in the newly adopted world, businesses are faced with many challenges – shifting business hours, fluctuating supply chains, and protecting their employees – all while ensuring that the public health is a priority whilst taking these decisions.
Contactless solutions will be the new future in a post-pandemic world. Contactless technologies such as NFC tags and QR Codes are on the rise and will continue to be in existence since it promotes zero-touch.