‘Inverse Showrooming’ Made a Brief Appearance During Holiday 2014

By Haydn Simpson, NetNames

Most readers would agree that Internet brand retailing is all about maximizing traffic to a given site, converting site visits to sales and getting buyers to come back and buy more. That’s one of the paybacks on the hefty investments they make in online marketing.



That said, two weeks before the official start of the 2014 holiday shopping season, Walmart made the larger-than-life gesture of offering to match select online prices. Soon following that, what Walmart’s cashiers saw were a number of fake Amazon listings showing $400 Playstation 4 consoles being offered for $100 or even lower. This takes the idea of “showrooming” — the practice of consumers shopping in physical stores and using online environments to check pricing and get the best bargain — and turns it on its head, makes it sink to a new low. I like to call it “Inverse Showrooming.”



Walmart acted fast and quickly scotched the program. But the story shows some interesting new turns in the often-complex relationship between traditional brick-and-mortar retailers, newer online e-commerce platforms, and the people that drive all of these — the consumer.



As Alibaba and other e-commerce platforms establish themselves in the lucrative U.S. market, and more low-cost products, fake or otherwise, are offered to U.S. customers from other geographies, this problem will only become exacerbated. And this will have a strong negative impact on online sales metrics — the loss of trust and credibility in the retailer or brand, alone, has huge ramifications.



Much as legitimate marketplaces, seeing their own reputations at risk, have developed rigorous methods for policing vendors, and in fairness, both Alibaba and Amazon have evolved policies around this issue, sellers of counterfeit goods still manage to get onto these platforms. But the new twist is that now, they are getting consumers, motivated by the idea of buying real brands at bargain rates, to act essentially as co-conspirators.



Mobile apps and social media are two other wide open new fields where fraud and counterfeit can take root. Copycat social media pages use company names and logos to make their fraudulent activity believable, even to the extent of accepting payments for “orders.” And social media networks are used to disseminate links to fake products on rogue websites as well as online marketplaces.



It’s become an essential component of brandholders’ online security to monitor and take down not only fake websites but online marketplaces that support counterfeiting and fraudulent Facebook pages.



As 2015 gets underway with more and ever new online brand issues, it’s useful to reflect on the new cyber-criminal wrinkles seen during the recent holiday season. Inverse Showrooming makes the customer into the bad guy, but we know at root that someone else is benefitting even more, at the expense of a legitimate company that’s worked had to build its customer base and brand equity. This can reach all the way back into manufacturing and the retail supply chain. Preventing it is a painstaking but artful exercise in tracking down the suspected fake, doing forensics to establish whether or not it’s legitimate, and exercising the mechanics needed to take it down. It’s good to know that with careful enough attention to changes in the online landscape, the brand owner’s worst nightmare can be pulled offline.

Haydn Simpson is product director of brand protection at NetNames, a firm specializing in global online security, brand protection and anti-piracy services. He can be reached at [email protected].