Today’s anti-counterfeiting technology provides brand owners with state-of-the-art protections, yet fraudsters continue to flood luxury markets with fake products. The challenge is understanding why luxury’s counterfeit problem is getting worse.
Consumers buy fake luxury items online from many sources, and often, they are unaware that they just purchased a counterfeit product until it’s too late. The item may be defective, poorly manufactured, or harmful to consumers. Still, luxury goods fall victim to counterfeiting, and the problem persists despite widespread anti-counterfeiting efforts. Today, the industry stands at a precipice where the status quo will not suffice, and a new perspective is necessary to combat counterfeiting and protect intellectual property.
What kind of goods are considered a luxury?
The definition of luxury goods varies from category to category, but in general, expensive brands associated with wealth and prestige fall along these lines. Ideally, these products would be of high quality and worth the high price tag; however, counterfeits are readily available online. Apparel and accessories like handbags, shoes, jewelry, and watches are vulnerable. Other counterfeited luxury products include perfumes, makeup, and luggage. Essentially, products that serve as a status symbol may be considered luxurious.
Who is buying these kinds of goods, and why
A recent survey by Scamadviser provides much-needed insight into why consumers buy fake items in the first place. Do they wittingly buy them, or are consumers unaware most of the time? The data show that 56 percent of people don’t know they purchased counterfeit goods, but some survey respondents admitted to buying fakes even after learning they were counterfeit.
Nevertheless, a significant proportion of consumers are unaware that counterfeits run rampant on the web because many believe they can identify fakes on sight. Scamadviser’s survey revealed that half of all people believe they have the ability to spot fakes, yet the statistics belie this confidence. The entire purpose of counterfeiting is to fool consumers into buying an inferior product, and fraudsters have many tactics and techniques at their disposal to scam consumers. One example is exploiting luxury goods’ perception as a sign of wealth.
The external sign of wealth
Across cultures, luxury items are status symbols that signify exclusivity and wealth. People who own and flaunt expensive apparel and accessories desire the attention society bestows upon their perceived success. It could be a custom automobile, a mansion, financial investments, or real estate. Either way, the idea is to separate oneself from the ordinary and into the exclusive side by demonstrating the ability to afford expensive products.
Social media influencers
Another consideration is the testimonial effect, which drives the social media influencer business. People want to belong in society, so they take cues from their peers and adapt them to their personalities. For instance, a consumer that values expensive watches may scroll through Instagram to see what their favorite celebrities are wearing, but anyone with a large following can be an influencer. Many consumers want to mimic what’s popular regardless of the source, and counterfeiters exploit this desire.
The socioeconomic factors
Along those lines, there are also socioeconomic factors to consider. Luxury items are expensive by definition, so the average consumer is “priced out” of those markets. This dynamic gives those with lower incomes the incentive to risk buying fake items at a discount. The issue is that low earners are not the only consumers who fall victim to counterfeiting. Counterfeit items can reach the shelves of boutique shops too. The luxury buyer – conditioned to accept anything expensive as luxurious – assumes products are genuine because they come from a legitimate physical location, yet counterfeiting persists.
Where are counterfeits found the most?
While counterfeiting can occur in any retail business, the most frequent offenders are websites, not major online marketplaces like Amazon and Alibaba. Counterfeiting occurs on those platforms, but Scamadviser’s survey revealed that eCommerce websites are the biggest offender. Forty-one percent of respondents admitted to buying fake items online from websites, yet 24 percent claim to have purchased counterfeits at a physical store, meaning the fraudsters succeeded in getting their products to market.
Are consumers aware that they are buying counterfeit products?
Furthermore, only a small portion of consumers knowingly buy fake items. The Scamadviser research pegs the number at 16 percent, a considerable number of people. But why do consumers purchase fake items? Do they crave status, or are they trying to save money on expensive goods?
The answers appear to vary based on the consumer’s attitudes and beliefs. There’s little incentive to purchase luxury goods through legitimate channels if someone sees no harm in buying counterfeits. Nevertheless, brand owners can entice people to buy genuine luxury products and protect copyrights.
What can brands do to entice consumers to purchase genuine items?
The best way to inform consumers about the dangers of counterfeiting is to educate them on the negative consequences. People may not realize that criminals in some parts of the world continue to exploit child labor to produce counterfeits. Not only are these items phony, but they may also be harmful. A good example is a counterfeit luxury perfume that contains toxins. High-dollar bouquets can cost hundreds of dollars, but consumers can buy fake products for a fraction of the price.
Still, brands can leverage consumer attitudes to entice them to buy only from legitimate channels. The trick is to guarantee that items are genuine when consumers go through official markets, but it’s best to encourage people to authenticate the product. Fraudsters exploit the luxury market because those consumers are less likely to believe an expensive boutique would sell fake products.
How can people easily detect if a luxury piece is genuine?
Some counterfeits are magnificent fakes that only a professional can identify; others are so poorly executed any consumers can tell the difference. The hard part is spotting the counterfeit items that are passable and come at an attractive price point. Brand owners can leverage consumers’ desires and provide a means to prove authenticity.
As years passed, the protection was a unique tag or hidden markings. For instance, a designer dress may have special stitching to prove it’s real. Physical items are more challenging to pinpoint, so the ideal solution is to use technology for verification. State-of-the-art anti-counterfeit safeguards from AlpVision allow users to verify products with an ordinary smartphone.
AlpVision Fingerprint excels at verifying authenticity because the technology is covert. When counterfeiters can’t replicate the protection, they can’t ply their illegal trade with impunity. Overt markings no longer suffice, and consumers can play an active role by verifying luxury goods.
But it’s possible to build a robust ecosystem of anti-counterfeit defenses to make it as easy as possible. It’s extremely difficult to copy AlpVision Fingerprint, and that’s the advantage.
If you’d like to learn more about which solutions would work best for your business,
Contact us for professional guidance on securing luxury products with strong anti-counterfeit protections.