In recent years, grey market trade has increasingly been brought within its bounds. Above all, the active approach of the luxury cosmetics industry has led to a sharp drop in the estimated grey market rate, a development that points in the right direction. Nevertheless, the grey market continues to cause considerable economic damage. It also destroys the value created jointly by manufacturers and retailers by conveying false price messages and offering luxury products in an environment that destroys their luxury image. Therefore, the industry has initiated a plethora of measures to stem the flow of goods into unauthorized distribution channels or to stop it altogether. In some cases, companies employ internal and external specialists whose sole purpose is to clean the channels. The number of coded products is increasing. However, a major threat comes from Internet trade, which uses illegal chains and networks that are difficult to trace.
A very great desire and one of the most frequent concerns of brand owners, besides proof of originality and direct communication with consumers, is the traceability of distribution chains. Here, digital components have gained massively in importance in the verification of products. Predominantly, however, the interweaving of product IDs with copy-proof printing elements and protection against tampering is regarded as necessary building blocks in product authentication. For example, unique codes, unique combinations of letters and numbers that are either printed as QR codes or stored in a chip (NFC, UHF), can identify products at piece level. This, in turn, enables digital communication with and among products. Customer loyalty programs and identity services would also be worth mentioning here. The analysis of data collected through scans opens up a new pool of market information for brand owners, but also logistics data. Thus, better production planning can be the by-product of tracking - track & trace - in the supply chain.
Blockchain technology, which is based on distributed, non-reversible storage technology, subsumed under the umbrella term "distributed ledger architecture", will play another role. The interesting thing is that you can trace any transaction in the blockchain back to its origin at any time. This is especially important when considering how a supply chain works. In addition to combining distributed ledger technology with QR codes, blockchain solutions are also compatible and linkable with other technologies to further enhance anti-counterfeiting: for example, technology solutions such as RFID or GPS, which are based on contactless data exchange. So, if a supply chain is built around a blockchain, it would be possible to record and track every contact with the product, from manufacturing to shipping and registering it in the warehouse to selling it as a transaction in the blockchain. This would create a completely transparent tracking system.