Beauty Brand OZNaturals Fights Counterfeiting and Diversion | Case Study

"We selected the Systech Brand Protection Suite™ because it provides an effective way to allow the customer to ensure authenticity based on our current packaging."

Mike Small, Chief Financial Officer

Customer

OZNaturals creates high-quality, effective and affordable skincare products that combine the best science with the power of nature. The company is committed to using only superior ingredients and the most advanced formulations, while staying true to its belief in the benefits of natural beauty products.

Challenge

OZNaturals has spent the past six years building a global distribution network and now sells in over 80 countries. Previously, the company sold almost exclusively online, and diversion was not an issue. As international sales increased, both diversion and counterfeiting became greater issues. Despite having a tight distribution network with only a handful of primary distributors, OZNaturals has a diversion issue. With their current tracking solution, the company can identify where diversion is happening as well as some of the offenders, but not nearly enough.

In addition, counterfeiting has been occurring for several years and is only getting worse. The company has only been able to identify that the largest culprits are operating out of China. Products AND packaging are being counterfeited, with both counterfeit and real product co-mingled into counterfeit packaging. Counterfeiters are even replicating the UPC codes, lot numbers and sequence numbers from authentic boxes.

This combination of counterfeit and diversion issues has begun to tarnish the brand’s reputation and value within certain marketplaces, creating a hesitancy for retailers to take OZNaturals products from authorized distributors. When retailers find OZNaturals’ products in free trade zones or in unauthorized retail venues, they know that the product is being commoditized. Culprits are introducing both fake and diverted products into the supply chain, and these retailers don’t want to stock a brand that’s been diluted by dubious product in the marketplace.

Solution

Current Approach
OZNaturals deployed a rudimentary serialization solution in which they manually track and trace products to the case and pallet level. Every case gets a unique identity, and they are tracking which customer is getting what product. The manual solution is somewhat effective, but far from perfect.

Despite the inherent flaws of a manual track-and-trace solution, they discovered a lot of fake product in the marketplace. The company realized that if no additional steps were taken, it ran the risk of losing major distribution channels. This became the main driver for OZNaturals to proactively confront counterfeiting and diversion threats head on.

Game-Changing Technology
The first proven line of defense is product packaging. While there are numerous overt and covert technologies available that can be added to a package such as holograms and special inks, most can be easily counterfeited. OZNaturals decided that the ability to utilize their existing product packaging was an essential component of an effective anti-counterfeiting program. The company selected the Systech Brand Protection Suite™ to secure its global supply chain.

Systech’s non-additive product authentication technology is a brand protection game-changer. It turns an existing package QR or barcode into a unique digital e-Fingerprint® that’s impossible to duplicate. Results from an independent study by Salt Hill Statistical Consulting confirmed that the probability of a counterfeit product authenticating as a genuine e-Fingerprinted item is less than one in 55 quadrillion. Using a smartphone app, consumers, distribution partners and field inspectors can instantly authenticate products anywhere in the supply chain. They know immediately if a product is authentic as well as where, when and to whom the product was originally manufactured and shipped.

Next Steps

The Systech Brand Protection Suite will empower distributors and loyal customers to ensure that each OZNaturals product is authentic and being sold as intended. OZNaturals sees the Systech mobile app not only as a facilitator to protect its brand but also to develop customer loyalty. Encouraging customers to authenticate OZNaturals products as they purchase or receive them serves two purposes:

1. Instill confidence in the purchase by providing a quick and infallible authentication check
2. Serve up customer loyalty/reward program offers

How Can Systech Solutions Help Protect Your Brand?

Tell us a little about yourself, and a Systech anti-counterfeiting expert will be in touch to learn more about your unique supply chain challenges.