If we polled consumers on which counterfeit goods had the highest seizures in the United States, the likely response would be luxury handbags, apparel, or maybe electronics. These items represent a significant number of counterfeit seizures. However, footwear topped the list of seizures by U.S. Customs and Border Control in 2009, with more than $99 million dollars in goods and 38% of all seizures.
A recent article in the Sunday section of The New York Times featured a counterfeit shoe factory in China and introduced us to some of the key players in the counterfeit shoe supply chain. Interestingly, we learned that counterfeiters can no longer rely on espionage or bribes to corral the latest product blueprint or model because the security in factories has been ramped up. Instead, counterfeiters have taken a simplified approach to production – they buy a pair of shoes and reverse engineer it as a knock-off, a tactic which has proven fruitful.
By far, the most salient development in the world of counterfeiting over the past years is that counterfeit products are now almost indistinguishable in quality to the legitimate goods. This means there is now a range of knock-off goods, from low to high end, which target different buyers and have fueled the growth of the counterfeiting business.
What consumers now see in the marketplace is a mix of genuine goods, knock-offs of differing quality, and grey market goods infiltrating the supply chain. Even as new legislative measures such as the ACTA trade agreement and the Combating Online Infringement and Counterfeits Act (COICA) bill are in discussion, brand owners need to implement a brand protection strategy to secure their products and ensure consumers are offered authentic goods.
The most effective way for footwear brand owners to combat counterfeiting and product diversion is to deploy the following three-component strategy.
1) Protect Your Product – Best practice footwear and apparel companies apply a multi-layered solution to enable the authentication of fake versus real.
- Authentication – A key requirement for product authentication is incorporating the security device as an integral component of the product during the manufacturing process. For maximum protection, the security device should be permanently affixed to garments and shoes to prevent attempts at removal.