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NFC technology companies have promoted the idea of using NFC tags to foil counterfeiters of luxury goods for some time.

Now more companies are proposing to combine the antipiracy technology with brand-marketing messages.

The latest is U.S.-based app developer ClikGenie, working with a tag supplier and printer, which have produced an app that authenticates wine labels while also enabling vineyards and other wine brand promoters to send consumers more information via a tap of their NFC phones.

ClikGenie along with NFC tag supplier Smartrac and chip encoder and label printer FineLine Technologies recently released CLIKSecure, an NFC product authentication app that the companies say combines tag-based product authentication with merchandising. The app adds an anticounterfeiting feature to ClikGenie’s lineup, which had focused mainly on mobile merchandising and promotion using 2-D bar codes.

The companies demonstrated the application for wine authentication at last month’s Global Secure Summit in Istanbul, Turkey. FineLine CEO George Hoffman told NFC Times that CLIKSecure’s partners are working with customers in the luxury apparel and wine industries, though he declined to name any clients, he said, for fear of alerting counterfeiters.

“We think any high-end product that attracts counterfeiters is a viable market,” Hoffman told NFC Times, citing pharmaceuticals, tobacco products, and software as examples.

The NFC tags use a chip from NXP semiconductors. NXP, like rival NFC chip supplier Inside Secure, sees a market for using NFC to thwart product counterfeiters.

Last February, Inside introduced an upgrade to its anticounterfeiting chip technology. The new chip, which Inside calls VaultC160, includes memory space for both anticounterfeiting technology and product information. Consumers could tap to check an authentication certificate to confirm the originality of a luxury handbag, wine or watch while also downloading product pictures or recipes, according to Inside.

The CLIKSecure app backers chose fine wine for the recent demonstration because of growing counterfeit losses in the wine market. Premium wines can sell for a few hundred dollars a bottle, with especially prestigious vintages fetching prices in the thousands. 

European wine exporters are being hit especially hard by counterfeiters, with an expanding luxury goods market in China driving demand there for knockoff products, including wine. Chinese wine drinkers consume 100 million cases a year, twice as much as in 2005, according to French wine industry group Vinexpo.

Decades-Long Problem
Wine counterfeiting is not a new problem, however. The most basic method, printing a fake label with a subtly misspelled brand name or a slightly different logo in hopes of fooling buyers, is common to other luxury-goods markets prone to counterfeiting, including apparel and accessories. More ambitious counterfeiters might remove an authentic label and place it on a bottle with a similar shape, usually from the same vineyard, which contains a cheaper wine. Savvy buyers might identify the fake if the cork does not match the label. 

In an effort to combat these tactics, during the 1980s, some wineries turned to ultraviolet tags and microetched bottles to protect their brands, but high-end counterfeiters could get around these measures by recycling the tagged, etched bottles and refilling them with cheaper wine. Some counterfeiting operations even invest in special equipment to replace the original corks. Unlike the earlier ultraviolet tags, CLIKSecure’s tracking functionality could help catch recycled bottles before they reach consumers. 

The CLIKSecure app itself is available only to designated employees, such as product inspectors. When a CLIKSecure user taps the tag, the app reads the chip inlay’s UID number for verification. Each phone is assigned a unique serial number, which is also registered when the user taps a product.

“We record that unique phone as well as the GPS of the phone,” Hoffman told NFC Times. “This could be used to track products through the supply chain if the brand wanted to do that.” 

Product authentication requires the CLIKSecure app to run on an authorized phone, but shoppers tapping for product information can use any NFC-capable smartphone, without the app.

No ‘Random Google-Type’ Ads
After tapping the label, the tap will direct users to a microsite, which includes product information, along with messages from the vineyard or brand. This content might include targeted advertising. 

Interest is growing among advertisers in using NFC tags to both promote products and gather data on consumers to send more targeted advertising.

FineLine’s Hoffman indicated the wine label tags only send simple promotions, in the form of a URL, which is not customized to the user.

“We believe clients will only allow advertisements which add value to the site,” such as suggested cheese pairings for wine, rather than “random Google-type adverts,” Hoffman said.

Through the NFC tags and the microsites, brands also collect data about which products customers interact with and which pages on the microsite are most viewed, but not geographic or identifying information about individual shoppers.

Tags and Data Analytics
Netherlands-based Smartrac, which supplied the NFC inlays for the wine labels, has promoted use of tags for promotions through microsites and gathering data on consumers.

It also supplied the inlays for a high-profile print ad placed last spring by luxury car brand Lexus that enabled subscribers of Wired magazine to tap for additional information on the in-car navigation systems and apps. The NFC tags in the ad also collected data on consumers.

Smartrac, which did not respond with answers to several requests by NFC Times for additional information on the CLIKSecure project, told NFC Times in March following publication of the Lexus ad that tags could yield valuable data on the consumer for advertisers. Advertisers could get the times, dates and number of times the tag was tapped, for example.

The advertisers could then send more narrowly targeted follow-up promotions to those smartphone users demonstrating the most interest in the NFC-enabled ads, even if they do not know their names. Of course, even without the names, the tracking would require the consumers to opt in.

Though there are doubts that vineyards would want to put a QR code on their wine labels, which some consider unattractive, FineLine’s Hoffman recommends brands also use the codes in addition to the NFC tag, in order to reach the greatest number of customers.

“There are far more phones in the market that can read QR than can read NFC at this point in time,” he said. NT.