How manufacturers use QR codes to steal sales from retailers who sell their brands…

In my first book on email marketing published in 1998, titled “They laughed when I sat down at the keyboard, but when I began to email…” I made a couple of predictions.

One was that manufacturers would use their packaging to direct customers to the manufacturer’s website to build a database of customer data. These manufacturers would then use email to take their websites directly to the customers and use embedded e-commerce to sell directly to them. The second prediction was that the manufacturers would redirect their advertising funds from mass media to email marketing and database management.

Unfortunately, the technology we were pioneering – streaming video emails with embedded e-commerce links – became vulnerable as vehicles for introducing viruses, and only lasted a short time before being eliminated forever. But manufacturers have developed databases and now use email to sell directly to consumers. Wisely though, they continue to use mass media to build and maintain brand value.

This leads me to the recent rise in ubiquity of QR Codes that I wrote about in my previous article. It seems my last-century prediction has come true but with a sinister twist – at least in the cosmetics category. I’ve yet to research other categories and welcome any examples you may have dear reader.

Here is how manufacturers are using QR codes to steal customers from a retailer distributing their product, and push the sale to a competitor or to the manufacturer’s own online store.

This case in point is a highly successful Australian retail pharmacy that stocks brands such as Revlon, L’Oreal and nudebynature, yet is having sales stolen directly at Point Of Sale.

The brands have introduced QR codes at the counter to promote virtual mirrors or look-books so retail customers can inspect the products in use, or learn more. But here’s what’s really happening:

Here is Revlon’s QR Code to try the virtual mirror:

Scan the QR code to download the virtual mirror

Here is the landing page:

And here is where you can link to from the landing page – directly to an offer from a competitor:

Her is the L’Oreal QR Code at Point Of Sale:

It links to a tool to trial the lipstick shades. Here is the landing page:

Here is the page after the ‘Tap & Try” link disappears:

And here is where the ‘Buy Online” link takes you – again directly to a competitor:

This is obviously good business if you’re Chemist Warehouse, but not if you’re the incumbent pharmacy paying to stock and promote the cosmetics in your retail store.

Here is the nudebynature QR code:

This opens a look-book:

Click on the logo and you link to the nudebynature website:

Clicking on the “Shop Sale” button links to the e-commerce page where the customer can buy direct at a special sale price:

I have no idea if this is planned surreptitiously, but it certainly smells on the nose. Using QR codes to stealthily switch customers from the retail store in which they are standing, to buy online at a competitor, or directly from the manufacturer, does not pass the pub test.

It feels dishonest and certainly not in the spirit of a good partnership between manufacturer and retailer. If this continues I suspect retailers will simply refuse to allow QR codes at POS, unless the codes link to the website of the retailer in which the customer is physically shopping. This is a shame as QR codes can add value to the shopping experience.

If you have any thoughts or examples please share them. I’m curious to learn if this practice is widespread or just getting started.

I’m off to sort out another service hassle at the Telstra store and consider buying a new phone – I wonder if there are QR codes on their displays???

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