Market Overview

Majority of American Consumers Concerned About Inauthentic Products; 73% Would Stop Purchases

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New Harris Poll, commissioned by Applied DNA Sciences, finds
consumers will take strong action, boycotting companies, writing
negative reviews and reporting to regulatory bodies

An epidemic of inauthentic products may be consuming the mindset of
today's American consumers according to a recent Harris Poll: Roughly
four in five Americans (79%) are concerned that products they purchase
which they expect to be high quality could be made using low quality
materials; more than 7 in 10 Americans (71%) are concerned that products
they purchase have made false claims; and, nearly two thirds (65%) are
concerned that products they purchase at full price could be knock-offs.
These are the results of a survey of over 2,000 U.S. adults 18 and over,
conducted online during June 2018 by The Harris Poll on behalf of Applied
DNA Sciences
, the leader in DNA-based authentication.

"This survey confirms that selling inauthentic products can be extremely
detrimental to companies and their brands," said James A. Hayward,
Ph.D., chairman, president and CEO of Applied DNA Sciences. "In fact,
nearly all Americans (94%) say that, if they found out a product they
bought at full price was inauthentic, they would take action."

Among those who would take action:

  • 73% would stop buying from the company that sold it
  • 67% would try to return the product
  • 63% would tell friends/family about their negative experience
  • 43% would formally defame the company that sold it by writing a
    negative review
  • 43% would report the company to regulatory agencies

Behavioral impacts fluctuate based on age and gender, with women more
likely than men and older adults more likely than younger adults to act.

  • 77% of women vs. 69% of men, and 81% of adults aged 45+ vs aged 64% of
    adults aged 18-44 would stop buying from the company that sold the
    inauthentic product
  • 72% of adults aged 45+ vs. 59% of adults aged 18-34 would try to
    return the product
  • 66% of women vs. 60% of men and 69% of adults aged 45+ vs. 54% of
    adults aged 18-34 would tell friends/family about their negative
    experience
  • 46% of women vs. 40% of men would write a negative review about the
    company that sold it
  • 48% of adults aged 45+ vs. 36% of adults aged 18-44 would report the
    company to the authorities.

Additional findings of the survey suggest that Americans disapprove of
unethical business practices and the use of forced labor when it comes
to companies they purchase from, and they are not naïve to the fact that
these practices are prevalent. Nearly three quarters of Americans are
concerned that products they purchase could be made using forced labor
or by companies that use bad business practices (74% and 73%
respectively). Again, differences arise when it comes to gender and age:

  • Women are more likely than men to voice concern about forced labor
    (80% vs 69%) and companies with bad business practices (79% vs 66%).
  • Older adults, ages 65+, are more likely than their younger
    counterparts to feel forced labor may be rampant, 81% are concerned
    about this when it comes to the products they purchase compared to 73%
    of 18-to-64-year-olds.

The prevalence of inauthentic products is growing significantly. The 2018
Global Brand Counterfeiting Report
stated that counterfeiting
globally reached 1.2 trillion USD in 2017 and is expected to reach 1.82
trillion USD by 2020. The U.S. Customs and Border Patrol (CBP) published statistics
for the fiscal year in 2016 that showed 31,560 seizures of intellectual
property rights (IPRs), up nine percent from the previous fiscal year.
CBP estimated that the total manufacturer's suggested retail price
(MSRP) of the seized goods would have equaled approximately $1.4 billion
if they were legitimate products.

"Years of technological advancement have made it harder to spot
inauthentic products," adds Dr. Hayward. "As a result, consumers are
deceived into purchasing an inferior or unethically produced product. We
offer an authentication solution to manufacturers by using biotechnology
as a forensic foundation to track products on a molecular level from
source to seller. It provides supply chains with scientific proof and
physical traceability of materials and products."

"The proliferation of counterfeit products is not only a threat to
American brands, but also to American consumers," says Stephen Lamar,
executive vice president of the American Apparel & Footwear Association.
"While lost sales and brand equity are certainly concerns, the dangers
of buying a product that does not meet product safety requirements, was
made in an unregulated factory, or that does not meet quality standards
is very real. Creating better public policy, educating consumers, and
taking advantage of emerging technologies are all essential components
in the fight against intellectual property theft."

Consumers can become more proactive to ensure an authentic purchase. The
United States Government Accountability Office suggests that consumers
become familiar with the brand and know its products. Consumer should
also buy only from trusted retailers, know the difference between
"fulfilled by" and "sold by," and be wary of "too good to be true"
prices.

Survey Methodology

This survey was conducted online within the United States by The Harris
Poll on behalf of Applied DNA Sciences between June 21
and 25, 2018 among 2,019 U.S. adults ages 18 and older. This online
survey is not based on a probability sample and therefore no estimate of
theoretical sampling error can be calculated. For complete survey
methodology, including weighting variables and subgroup sample sizes,
please contact Angie Mathews, angie@cgprpublications.com.

About Applied DNA Sciences

Applied DNA is a provider of molecular technologies that enable supply
chain security, anti-counterfeiting and anti-theft technology, product
genotyping and DNA mass production for diagnostics and therapeutics.

Applied DNA makes life real and safe by providing innovative,
molecular-based technology solutions and services that can help protect
products, brands, entire supply chains, and intellectual property of
companies, governments and consumers from theft, counterfeiting, fraud
and diversion. The proprietary DNA-molecular based "CertainT®"
platform can be used to identify, tag, test, and track products, to help
assure authenticity, origin, traceability, sustainability and quality of
products. SigNature® DNA describes the core technology
ingredient that is at the heart of a family of uncopyable, security and
authentication solutions such as SigNature® T and fiberTyping®,
targeted toward textiles and apparel, BackTrac™ and DNAnet®,
for anti-theft and loss prevention, and digitalDNA®,
providing powerful track-and-trace. All provide a forensic chain of
evidence, and can be used to prosecute perpetrators. Applied DNA
Sciences is also engaged in the large-scale production of specific DNA
sequences using the polymerase chain reaction.

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Forward Looking Statements

The statements made by Applied DNA in this press release may be
"forward-looking" in nature within the meaning of the Private Securities
Litigation Act of 1995. Forward-looking statements describe Applied
DNA's future plans, projections, strategies and expectations, and are
based on assumptions and involve a number of risks and uncertainties,
many of which are beyond the control of Applied DNA. Actual results
could differ materially from those projected due to our history of
losses, limited financial resources, limited market acceptance and
various other factors detailed from time to time in Applied DNA's SEC
reports and filings, including our Annual Report on Form 10-K filed on
December 28, 2017 and our subsequent quarterly reports on Form 10-Q
filed on February 8, 2018 and May 3, 2018, which are available at www.sec.gov.
APDN undertakes no obligation to update publicly
any forward-looking statements to reflect new information, events or
circumstances after the date hereof to reflect the occurrence of
unanticipated events, unless otherwise required by law.

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