NEW YORK — Montblanc is fighting mad. Eight pallets of product were stolen about a year ago, and recently some of the luxury brand’s writing instruments ended up at Costco.
“They bought it from somebody, but if you are a consumer, and buying products from unauthorized sources, you just don’t know what you are getting,” asserted Karsten Martens, president and chief executive officer of Montblanc North America, a division of Compagnie Financière Richemont AG.
Now Montblanc, Cartier and other divisions of the Richemont luxury group are intensifying efforts to combat gray marketing, as well as counterfeiting, which is estimated at being a $500 billion business.
Before the raiding parties hit the counterfeiters and unauthorized dealers, a lot of legwork and investigation is required to get the goods on the bad guys, and that’s where the new technology comes in. A company called GenuOne, based in Boston, has two divisions, GenuGuard and GenuNet. With GenuGuard, “We make legitimate products recognizable in a covert way,” said Tom Taylor, director of GenuGuard.
It’s kind of like fingerprinting the real products while they are still in factory production. For example, GenuGuard puts special inks or dyes, which can be visible or invisible, in the fibers of a label, or on the product itself, or on the packaging. Then there is a handheld reader that shines an ultraviolet or infrared light on the item or package and measures a reaction. The GenuGuard marking system costs “pennies per unit,” the company said.
Other methods of detection for different kinds of products also are provided by GenuGuard. With Cartier, said Taylor, the back of a watch might be infused with a kind of “nano bar code,” or small metallic markers with identifying information.
The fight against diversion often involves keeping track of merchandise, and that’s done by serializing each unit and tracking that unit to find it, Taylor said.
“You have a covert serial number embedded in the product, or it could be right in front, like in the tongue of a sneaker. Once the shoe is found, say, in a flea market, where it is not supposed to be sold, then you buy the product and use the serial number to track where its previous distribution point was. That way you can find the culprit. Serialization gives you the ability to track where you sent it, the channel of distribution and the type of store or geography,” Taylor said.Taylor recounted a case of a sporting goods company that sold only to pro shops, but found its merchandise in a mass merchant as an end-aisle display. The sporting goods company bought the product, looked at it with a reader, found the serial number and determined which pro shop was recirculating the goods. The pro shop had excess merchandise and was dumping the goods at the end of the season, its executives figuring the margin obtained by selling to the mass merchant was more than they would have gotten by slashing prices to clear out the goods themselves. Serial numbers, recorded at each stop in the pipeline, can help deter such diversion.
The Internet can be a big channel for any fencing operation. But, according to Jeffrey Unger, president and ceo of GenuOne, there are new features in his firm’s GenuNet service that save customers time and money by automating many of the processes associated with identifying, tracking and responding to brand infringement, counterfeiting or product diversion on the Internet. GenuNet software is designed to find every instance where your products are being sold on the Internet, he said.
“It will help you learn about the site where it is being sold, who owns the site and the selling price,” which could be undermining the brand’s true selling price, Taylor said. “For this, all you need is Internet access and a browser, and you go to GenuNet’s Web site,” said Unger.
According to Suneer Maheshwary, product manager for GenuNet, his company’s “crawler technology” mines the Web for specific information. The service starts at $400 and can go up to $1500 per month, depending on the complexity of the service package or number of modules ordered. Modules monitor different types of infringement violations.
GenuOne recently signed an agreement with eBay, whereby the GenuNet Marketplace Tracking module queries eBay, providing customers with advanced search and filtering capabilities, e-mail alerts and the ability to send item listing discontinuation notices and warning letters directly to sellers who infringe on a company’s property rights.
Aside from Richemont, GenuOne said New Balance, Titleist, Bacardi and Kodak, as well as consumer electronics, computer hardware, textiles, apparel and pharmaceutical companies, purchase its services.“GenuNet creates monthly reports [that reveal who is selling a company’s products on the Internet],” Martens said. “There are no authorized sales of Montblanc or Richemont products at all on the Internet,” Martens said. “Yes, you find unauthorized products and fakes on the Internet. The fakes are so good that you can’t tell the difference when you see it on the Internet, or even with a photo. So we are buying product to determine if it’s real or not. In any case, it’s not supposed to be there. If the product is real, then we use serial numbers to find out how it got there and identify the source.”
But, he added, “technology is not enough. You need private investigators to track down [the illegal diverters and counterfeiters].”
Montblanc also has worked with Netsearcher, another technology that searches the Internet, as well as Berkeley Intellectual Property Services, which is part of Richemont. Martens said that in its campaign against counterfeiting and diversion, Richemont has shut down 175 fake sites. However, when one is shut down, sometimes the same people open up a new site. “We are going after them with private investigators. The most difficult thing is to find out where the site is coming from,” he said.
“The Internet is the fastest-growing sales and distribution channel, so it is critical for companies to proactively protect this new channel from illegal and unauthorized activities,” said Jeff Kessler, senior analyst at Lehman Bros., in a statement.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty