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CASE STUDY How AI helped Mighty Mug stop hemorrhaging up to $20M in revenue due to counterfeiting

MightMug: can't be knocked over – and now it can't be knocked off
MightMug: can't be knocked over – and now it can't be knocked off

Mighty Mug, a homewares brand that makes cups and mugs designed to never tip over, had a major counterfeiting problem. Bad actors all over the internet were selling knock-off versions of Mighty Mug products on various online marketplaces such as Alibaba, Amazon, eBay, and more.

 

This was costing the company an estimated $15 million to $20 million in revenue losses, while also limiting the company’s ability to expand its market presence to other countries where the knock-offs had already beaten them to the punch.

 

“Counterfeits really hampered our ability to distribute Mighty Mug internationally,” says Jayme Smaldone, CEO of Mighty Mug. “We had one distributor who wouldn’t carry the Mighty Mug in his country because of the imitation situation that was going on there.”

 

Not only were the revenue losses and distribution issues problematic, but Mighty Mug recognized another problem plaguing the company due to fake listings online: when customers bought the counterfeit versions thinking they were the real deal and later encountered issues with the product, their perception of the authentic Mighty Mug brand were tarnished as well.

 

From old school reporting to advanced AI takedowns

In its first attempt to curb the damage to its brand perception as well as the loss in sales, the company hired a lawyer who would manually take down the fakes. This strategy was costly and extremely time consuming. In seven years, the lawyer was only able to identify and remove approximately 100 fake listings from online marketplaces, when Mighty Mug knew the problem was significantly larger.

 

The company knew it needed a better solution to take down the thousands of knockoffs online that were damaging the brand, so Mighty Mug began partnering with Red Points – a platform that uses human interaction as well as artificial intelligence and machine learning to automatically flag and take down fake listings on online marketplaces and social media.

 

Red Points’ technology uses bots and “crawlers” to scour 100+ websites spanning from social media to major online marketplaces to detect listings that appear to be selling counterfeit items. The brand then can review each detected listing and confirm if it is indeed selling a fake product. From there, Red Points alerts the marketplace, which then has the listing removed. With Red Points, Mighty Mug was able to remove thousands of counterfeits and significantly slow down revenue losses due to fakes.

 

Taking back control of the brand

One year since implementation, Red Points has flagged and removed more than 3,500 counterfeit listings on dozens of online marketplaces – a 3,400% increase in detections and take downs from Mighty Mug’s previous strategy.

 

“One of the main benefits of finally removing the counterfeits is that knockoffs are no longer distorting the marketplace with lower prices,” Smaldone adds. “Since partnering with Red Points, we’ve been able to expand into new countries where fakes had previously had a stronger foothold over the market, keep consumer perception of our brand and the quality of our products positive, and significantly cut down on the loss of revenue we experienced at the hands of counterfeiters.”

 

Laura Urquizu, CEO and Partner of Red Points, adds: “So many brands do not realize the damage that fakes and bad actors can have on a company’s reputation, revenue stream and distribution expansion efforts. We were delighted to work with Mighty Mug to empower them to take a hard stance against counterfeiters through an easy to use and impactful platform that delivered tangible results.”

 

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