Counterfeiting is one of the fastest-growing and most profitable industries in the world, experts say.
Product piracy applies to just about every type and grade of consumer goods: Shampoo, cosmetics, cigarettes, food, DVDs, perfume and pharmaceuticals are just some of the recent targets.
Accounting for 5 percent to 7 percent of the world trade market, phony products are a $600 billion industry.
And it’s an industry that can be hazardous to the health of your business as well as your own health.
Often made in developing companies with lax regulation and controls, knockoff products have been linked to organized crime or criminal activity, posing serious threats to consumers and companies alike while draining economies, say the experts at Acsis, a supply-chain logistics company. Counterfeiting has become the crime of the 21st century, Acsis says.
More than 1 million counterfeit electrical products have been recalled in recent years, including extension cords, power strips and batteries—products that not only can destroy electronic devices but pose a serious fire hazard, says the Electrical Safety Foundation International. According to the U.S. Chamber of Commerce, 64 percent of counterfeit electrical products are purchased from legitimate shops and retailers. However, many illegitimate power adapters continue to be sold online.
Counterfeiting becomes an even more insidious problem when it involves pharmaceuticals, including products that have been diluted, are falsely labeled or contain no active ingredients. In January 2010, the Food and Drug Administration warned consumers of counterfeit Alli capsules (for weight loss) sold over the Internet. Rather than orlistat, the active ingredient in Alli, the counterfeits contained a controlled substance called sibutramine, a potentially dangerous medication that officials say should not be used without a doctor’s recommendation.
While it would seem simple to warn business owners to stay away from seemingly shady deals and encourage them to buy from only reputable manufacturers and distributors, it’s not that black and white, Acsis’ chief technology officer said.
“In an economy where everyone is trying to save money, it is often hard to pass up what looks like a great deal,” said company CTO John DiPalo. “It’s important to remember that in nearly every instance, counterfeited goods are often made with inferior materials and not held to the high standards as the original. Despite this well-meaning intention of trying to spend less, in the end, it’s just not worth the risk.
“In an age when all parties are responsible for the product once it leaves their four walls, it’s no surprise that true product visibility throughout a supply chain is not only a necessity but a means of survival.”
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Today Best Buy announced layoffs and store closures, as results continue to disappoint.
None of the businesses are too hot, but there’s one are that REALLY stands out as bad.
Entertainment (which is games, DVDs, etc.) is getting crushed. After falling 14% YOY last Q4, it then fell another 20% this Q4.
One bright spot is actually a very bright spot for the total economy and that’s appliances. This is a sign of more housing activity, and everyone should be happy about that.
As to the key point, anyone who has ever been into a Best Buy knows how much floor space was devoted to entertainment media, and area that seems to be on the permanent decline.
- CITI: Trade In Your Best Buy Stock For One Of Their Cheap Big Screen TVs
- Citi: We Checked Out The Shopping Malls, And This Is What We Saw
- Best Buy Misses Q2 Estimates
Netflix has made no bones about the fact that it’s competing (hard) with HBO, and it seems that the sentiment is the same on the other side. According to CNET, HBO has stopped providing Netflix with DVDs of its shows. Of course, the freedom to purchase from other legitimate resellers has enabled Netflix to keep the discs flying, but it’s no longer able to source ‘em directly from the Box Office’s warehouse. The deal supposedly went into effect at the start of this year, but it’s unlikely that you’ll ever notice; as the story goes, Netflix will have to pay slightly more to procure them elsewhere, but it’s mostly a symbolic move by HBO to ruffle the feathers of Reed Hastings and co. Oh, and if you thought the same luxuries found in HBO Go would ever find its way to Netflix’s streaming department, we’d ask that you share a little of your optimism with the rest of the world.
HBO to Netflix: you’ll need to buy our DVDs elsewhere, pal originally appeared on Engadget on Thu, 05 Jan 2012 14:47:00 EDT. Please see our terms for use of feeds.
iPhone/Android: This Saturday, December 10 would be a good day to go shopping. Amazon’s offering 5% off (up to $5) for select items if you barcode scan them using its Price Check app; the offer can be used three times.
To get the discount, you’ll need to check prices on a qualifying item in one of these categories: Electronics, toys, sports, music, and DVDs. After putting it in your shopping cart with the Price Check App, you’ll have 24 hours to buy it (you can do it from the Amazon website or other Amazon apps) and get the 5% discount automatically applied.
As we’ve noted before Amazon Price Check is a really versatile price checking app you can use to look up products using your voice, photos, barcodes, or old-fashioned text search.
The promotion starts at 9pm PST December 9 and runs through 11:59pm PST December 10. So go download the app by the weekend, if you haven’t already.
I don’t understand Google Shopper. Not because the function—searching for books, CDs, DVDs and more by using the cover art or barcode—is confusing. But because they already have a visual search app built into new Android phones, Goggles.
Goggles does the same thing: You take a picture of something, like a book cover, and it searches for it. I get that Shopper is slightly different, with more of a direct Amazon-competitive slant, since you can bookmark products to buy them later (presumably through Google Checkout).
But why not just integrate that into Goggles? Why the hell does this separate other product exist? Like Fake Steve says, WTF is going on over there? Android and Chrome OS? Wave and Buzz? (Okay, Buzz and Wave aren’t an entirely fair comparison, though try explaining them to a normal person.) Now Goggles and Shopper? Am I just missing something? [Google]
The anticipated growth of internet-enabled TVs in the next four years would likely increase the popularity of digitally downloaded movies, TV shows and video games while dampening sales related to DVDs, blu-ray discs, video game discs, and other physical content formats, according to Retailer Daily.
While internet-enabled TVs are only expected to account for about 3% [...]<img src="http://feeds.feedburner.com/~r/marketingcharts/~4/HIb4XajC-yc" height="1" width="1"/>
this is on Fifth Avenue between 43rd and 44th streets in New York City.
In thinking about retail … this helps illustrate the tremendous challenges they face.
- online switching costs are pretty much zero — just type another URL; these two stores are physically touching — just walk next door
- they carry much of the same inventory from plasma TVs to computers to home stereo equipment to software, CDs, DVDs, etc.
- they both sell Apple iPods; consumers have already decided to buy an iPod for Christmas (for some reason), which store do they walk into? what differentiates the store with the blue awning from the one with silver letters? they both have “black friday” discounts but the price ended up to be about $1 from each other; both have geeks on staff, one called Geek Squad and the other Fire Dog
- and then there’s Amazon.com which is tax free and offers free 2nd day shipping.
THIS is a challenging marketing problem for retailers such as the ones pictured!
UPDATED: December 2013
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
Collaborators – Digital Profs
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