Round table: How the FMCG Industry is Tackling Online Risks to Protect Consumer Safety
We brought FMCG leaders in our INSYNC community together to discuss how to ensure consumer safety online, share experiences around leveraging platform relationships, and offer advice on internal collaboration.
Consumer safety the top concern for FMCG leaders
Companies in the FMCG space depend greatly on brand recognition and customer loyalty for success. Issues that threaten brand exclusivity, reputation, and consumer experience are therefore a serious concern.
A poll of FMCG leaders in our INSYNC community saw 78% claim health and safety to be a top threat they face online.
What dangers are there to consumers?
The nature of FMCG products – items we cook with, clean with, consume, and put on our bodies – means there are potentially severe dangers when consumers purchase counterfeit products.
Lack of testing
Poor quality products, not manufactured or tested to comply with relevant safety standards.
Harmful health and safety consequences for consumers; seized goods found to contain cyanide, arsenic, lead, mercury, and rat excrement.
Products may be used, expired, tampered with, removed from original packaging, or inaccurate in quantity.
What tactics are sellers using to target consumers online?
FMCG leaders shared a range of established and emerging tactics being identified across platforms.
Repacking, returns, and overruns
Counterfeiters attempt to justify the different quality, look, and feel of products or packaging by claiming they are repacked, returns or surplus factory overruns of legitimate product.
Brand equity abuse
Sellers advertise products where, to try and avoid detection, the product itself doesn’t use a brand’s trademarks, but the description or search terms do.
Sellers use brand name to attract consumers to DIY kits, providing materials and instructions to make their own product.
Sellers impersonate legitimate brands with fake, poor quality merchandise which confuses consumers and threatens brand reputation.
Sellers using brand trademarks to sell controversial or unethical products that are outside of the brand’s strategy.
Working with Platforms
How compliant are marketplaces and social media platforms in protecting consumers?
Compliance rates can vary significantly by platform. Certain social media sites take a long time to engage and enforce. Other platforms are more responsive.
Advancements in technology in this area have helped. Brand protection software identifies threats and enforces quickly. Also, the relationships that brand protection providers have with platforms can be extremely helpful.
More established social media platforms such as Facebook, Instagram and Snapchat tend to be more responsive.
New and emerging platforms such as TikTok can be slower and less compliant, and often have less mature processes for dealing with notices.
Compliance can also depend on what the infringement issue is. For example, platforms tend to be more responsive regarding straightforward IP issues, whereas safety issues can take longer to resolve as regulations and systems may not be in place to immediately enforce.
Fake influencers have become a significant problem for many brands on social media platforms, where accounts use Instagram, Snapchat or TikTok, to gain visibility and an audience and then link to external infringing websites where consumers can purchase the product.
It has been known for brands to leverage commercial discussions between platforms and marketing teams to improve engagement.
It’s helpful for brands to have a process in place where they can easily monitor:
- 1. Enforcement for every instance of violation across all relevant platforms
- 2. The compliance rate by platform for these actions.
This way, brands can identify trends and areas where compliance is low, adjusting strategies and applying pressure where needed to improve in these areas.
How are brands working with platforms to protect consumers?
How compliant are marketplaces and social media platforms in protecting consumers?
Many leaders spoke positively about how things can be changed for the better. For example, platforms such as Alibaba used to be seen as one of the less responsive platforms, but that has changed over time to become one of the most responsive.
It shows that if there’s commercial pressure on platforms, collective pressure from brands and a willingness to work together, there is the potential for positive change.
Safety is of paramount importance, and is therefore a topic that should resonate with most platforms, and many claim to have the safety of consumers at the heart of their mission.
If brands and platforms can partner in working towards a common goal, change can be achieved. Platforms also appear increasingly conscious that consumers trust the products sold on their marketplaces.
When it comes to informing change, brands are often more aware of the issues than platforms, governments, and regulatory bodies. They have more data, more experience in the market, and know practically what needs to change to successfully tackle the issues and protect themselves and consumers.
What else can FMCG brands do to protect consumers?
Brands can do more to educate consumers about the prevalence of counterfeit goods, the dangers they bring, and identifiers to help distinguish between fake and real products.
Educate customs, law enforcement bodies on the danger of these products and the severity of the issue. It’s their responsibility to prioritize safety issues too.
What challenges do online brand protection teams face within the business?
Another key point discussed by FMCG leaders was how brand protection strategies had shifted to support the recent acceleration of online sales, and the issues teams have been facing internally with this change.
For many brands, there is still significant adjustment to be done in terms of tackling brand protection issues online. Many FMCG businesses are traditionally accustomed to offline enforcement, and this takes a while to change.
The online side of brand protection can still be siloed from other teams within the business. Engaging the wider business and raising the awareness of the issues faced and the value of online brand protection takes time.
Online teams tend to have better relationships with departments such as ecommerce and marketing, due to the recent shift to ecommerce and the opportunities for collaboration here.
What are some best practices for collaboration with other internal teams?
We asked the FMCG leaders to share their advice on how to overcome some of these internal issues.
- Build awareness and educate other teams about of the kinds of threats brands are now facing, and the scale of them across these new and emerging channels.
- Demonstrate to ecommerce teams how these threats can become direct competition on their digital channels, competing for top results on search engines, targeting the front page and ‘buy’ button on marketplaces. These are real, tangible threats that help develop the conversation and demonstrate the business impact to commercial teams.
- Encourage other teams to be proactive and act as whistleblowers with any suspicions or changing patterns in their data. They are often the real eyes on the ground, with the best access to information that can inform brand protection efforts.
- Act globally where possible. It can be difficult to tackle large scale threats and act strategically without looking at the global picture. Whilst issues often arise locally, if these are dealt with in isolation, you could enforce against legitimate products in parallel, or impede efforts elsewhere.
How can we help FMCG brands work with platforms and protect consumers?
The FMCG leaders agreed that significant progress could be made if brands, regulators and brand protection experts pulled together to form a united working group to continue to share experiences and best practices, and help lobby for change.
At Incopro this is something we wholeheartedly agree with. This is the very reason we set up INSYNC – to drive global, cross-sector change in platform practices that will protect consumers and businesses from harmful products and sellers online.
As part of this commitment, we will continue to facilitate the FMCG leadership working group and continue to host discussions with brand protection leaders. If you are interested in joining the working group, become an INSYNC member – just complete the form below.
FMCG EBOOK: HOW TO PROTECT CONSUMERS & STAY AHEAD OF THREATS
With the growth of e-commerce leading to increasing demand for consumer products online, at Incopro we’re working with FMCG enterprises and online platforms to tackle the threats facing brands and consumers.
Download our mini ebook to understand the key and emerging issues in the FMCG sector, and explore how brands are mitigating threats to protect consumers.
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