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Italian Purse Company Finds a Discreet Way to Prevent Gray Market

Braccialini is using Tertium Technology's BlueBerry keyfob readers to inconspicuously determine if unauthorized outlets are selling its goods, and to investigate the history of such diversions.
By Claire Swedberg
May 28, 2013

When inspectors working for Italian leather goods manufacturer Braccialini enter a store searching for gray-market products, they cannot afford to attract attention. The inspectors approach a Braccialini purse or wallet on a store shelf, and quickly pass a tiny RFID reader over that item's RFID tag before the store's staff can notice what they are doing, after which they make a hasty retreat.

"These inspectors are risking their lives," says Alvise Mariuzzo, the IT manager at Braccialini, which sells its leather handbags, sandals, jewelry and other merchandise worldwide at brick-and-mortar stores, as well as online. The company seeks products being sold at unauthorized venues, and then researches where those goods were diverted to, and by whom. But the unauthorized stores' management is often not very receptive to such efforts, so Braccialini's inspectors must be discreet. The solution chosen for this activity, provided by Temera, consists of a Tertium Technology ultrahigh-frequency (UHF) RFID BlueBerry reader to interrogate tags sewn into the goods, and then forward that data to a server via a Bluetooth connection to a smartphone, according to Francesco Pieri, Temera's cofounder. The Temera software manages the RFID read data and stores details regarding each product and its expected supply chain route, thereby helping Braccialini to discover at what point a particular item may have been diverted to an unauthorized channel.

Braccialini's Alvise Mariuzzo

Braccialini initially began attaching RFID tags to products to identify any that are counterfeit, Mariuzzo explains. In 2010, the company chose to also use the tags to identify its bad customers versus good. A bad customer, he says, is one that sells Braccialini products via the gray market, in which typically high-value goods are diverted from a brand's approved sales channels to other, unofficial entities, such as Web sites or stores that may sell products at lower prices. The process is not illegal, but can affect the product's value. In addition, manufacturers may not honor the warranty of an item purchased from the gray market, so it can be detrimental to consumers as well.

Braccialini's management had suspicions about who its bad customers might be, but it needed proof before it could take action to rectify the problem. If a product was intended for sale in Italy but was found at a store in Russia, for example, the leather goods manufacturer wanted to know who was responsible for its diversion.

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