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Tanning Salon Products Manufacturer Shines a Light on Product Diversion

New Sunshine is using a UHF RFID system from WS Packaging to track shipments of its Designer Skin products, thereby creating a record that it can trace if goods are diverted to another outlet.
By Claire Swedberg
Jul 16, 2012Skin cream and lotion company New Sunshine is applying EPC RFID tags to bottles of its tanning lotion, in order to thwart the diversion of its products. Since November 2011, when the firm began employing a radio frequency identification solution to track the shipping of its Designer Skin product line to specific customers, the company reports a reduction in the rerouting and unauthorized sales of those goods.

New Sunshine's products, sold at tanning salons, can be expensive, costing up to $140 or more per bottle at retail, and are thus at risk for diversion or counterfeiting. This process of counterfeiting and diversion makes it difficult for salons—as well as New Sunshine itself—to ensure that the products are received and then sold to consumers at the establishment for which they are intended, says Scott Matthews, the company's general counsel and executive director of branding and creativity.

New Sunshine is applying EPC RFID tags under the labels or shrink-wrapped plastic packaging of some of its products.

The Indianapolis-based firm had been seeking technology to address the problem of diversion for nearly a decade when, in December 2010, it began looking into a solution from WS Packaging Group, a Green Bay, Wis., packaging solutions company. Product diversion—the rerouting of items for sale through unauthorized, unofficial or unintended channels—not only damages brand integrity, but can also affect distributor loyalty, according to Michael Manley, WS Packaging Group's senior business-development manager for RFID. If one distributor diverts a brand's products to be sold on the Internet, Manley explains, it "hurts other distributors, as well as salons." A manufacturer may ship its goods to distributors with plans to sell them to a salon, but several weeks after shipping, those same products may then appear for sale on a Web site, at which point tracing the items diverted can be next to impossible.

WS Packaging Group developed an RFID solution to track every bottle of product as it moves through the supply chain. First, WS Packaging created a serialization and encoding system utilizing a tag ID number that includes a code to identify the type of object to which each tag is attached, such as P for pallet, C for case and B for bottle. A serial number then follows that code.

WS Packaging prints and encodes EPC Gen 2 passive ultrahigh-frequency (UHF) RFID inlays, featuring Impinj Monza chips, at its own facility in Algoma, Wis. The company then provides inlays on a master roll to New Sunshine's manufacturing site in Indianapolis.

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