Does Corona infect brand protection, too?

Possible post-corona scenarios for brands and customers

The current pandemic caused by the coronavirus is changing much that seemed to be set in stone - especially buyers’ behaviours and the view on “what really matters”. Already, it can be said that less is bought, and more and more purchases are conducted online. What does this change mean for brands and brand protection? Even though this can not be answered with certainty, some developments are very likely. Our assessment of the situation is as follows:


Corona speeds up the growth of E-Commerce

More people will start shopping online and especially online marketplaces will grow significantly. Amazon is currently employing 100.000 new staffs - and that is only in the US. This will lead to an even more drastic reduction of stationary retail. Especially companies that were already struggling before the lockdown - like the German warehouse chain Galeria Karstadt Kaufhof - now find themselves facing insolvency. 

One can safely assume that the popularity of online shopping will continue after the corona crisis. Customers who now discovered the advances of online shopping, are unlikely to fully return to stationary retail. 

Not only the quantity, but also the kind of goods that were purchased online have changes during the past months: products that were bought offline - like groceries and drug store articles - are now being purchased online.

Other popular categories are medicine, books, games, electronic devices, workout equipment as well as materials for offices and homeschooling.



(Current development of buying preferences online - source: commonthreadco.com)

 

What does this mean for brand protection?

Not all sectors benefit from the growing E-Commerce sector. Currently, the buying patterns are influenced by economic and sanitary fears as well as sparingness. Mainly goods for daily use and leisure time are being purchased. Bigger, more expensive purchases and luxury goods are of less priority. 

Possible scenarios and examples:

It is possible that less new cars will be bought. Therefore, already purchased cars will be driven more and longer. Resulting from this, the demand for fixes and replacement parts will increase. While searching for the best offer, customers are likely to be tricked by counterfeits or frauds. 

This example can be applied to other sectors as well. Due to the economic recession, many people’s spending capacity will be lower. Resulting from this, more and more people will start looking for seemingly good deals and end up buying from frauds and receive counterfeit goods or lookalikes. 

It is likely that, as a result from this, producers of luxury goods like jewelry, fashion and cosmetics will suffer from sinking prices and fewer sales. The most pessimistic prognosis expects a loss of sales of 35%. Luxury brands are not only victims of counterfeits and lookalikes since this pandemic. However, the crisis is very well able to worsen this problem.

 

Brands are facing more pressure

Europol too expects a rise in organised criminality due to the corona pandemic.

Resulting from the mentioned developments, brands and producers face an increased pressure. Additionally, buying patterns have become more impulsive due to a fear of articles being sold out too quickly. The best example for this are toilet paper shelves that have been empty for weeks. This leads to consumers buying products overhasty from shady shops. Therefore, they hardly recognise fake shops or counterfeit products. Currently, fast deliveries and low prices are the top priorities for many customers.

 

What can you do to protect your brand?

From our perspective, good customer communication and pointed brand protection strategies are essential. Not only, but especially now.

Show your customers where to buy authentic products and how to recognise counterfeits. Use communication and branding to bind customers to your brand.

Counterfeit products are damaging to a brand’s image as well as to its customers, for example through dangerous ingredients. This is why it is now especially crucial to employ strategies for protecting your brand.  We assist you with our experience and our different strategies in all sectors of brand protection.

We detect counterfeit products, frauds and non-authorised sellers for you. Our valid documentation enables you to claim for indemnity. By this, you not only strengthen and protect your brand, but also the overall situation of your company - in today’s crisis as well as in the future.