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 Insights on Anti-Counterfeiting & Brand Protection Solutions

Prada or Prado? How Luxury Brands Can Fight Counterfeits

Posted by Alex Vercelloni on Sep 5, 2013 11:00:00 AM

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When it comes to counterfeiting in the luxury goods space, all a brand owner has to do is walk down any given street in any major metropolitan city to see street vendors peddling what looks like their goods at a mere fraction of the price. While those who purchase these illicit items may know these are glaring fakes, many don’t. Despite this, a recent study found that three-quarters of women questioned admitted they knowingly purchased a counterfeit designer fashion item. Many also said they had as many as five fake dresses, handbags, wallets, jewelry or pairs of shoes. One can begin to understand how this attitude could be worrisome to a luxury brand owner – which is where we come in.

When I first meet with a brand, their first question and pain point is simply, “How do we make this stop?” The answer, however, is a bit complicated. Counterfeit luxury goods pose an equally serious problem to both brand and consumer. For brands, reputation and turnover brand loyalty are at stake. For consumers, the effects of counterfeiting impact their well-being and ability to get (or retain) jobs in the manufacturing space. There is also the impact on economies, with millions of dollars lost due to counterfeiting each year. So you can see why the solution has to touch all of these audiences to effectively combat counterfeiting.

The good news is that while this problem is ever-present for luxury brands, there are protection programs which integrate traditional authentication features (overt, covert, and forensic) with online authentication. Innovative technologies have expanded to allow online authentication, based on serialization. With serialization, numbering and random codes can be easily stamped or embedded within luxury goods allowing the brand owner to track and trace exactly where and when the item was made and what warehouses have taken possession of it along the supply chain. This tracking system ensures any product can be checked instantaneously on an individual basis by anyone at any location.

Digital authentication also empowers consumers to join in the fight against counterfeits. If digital authentication is combined with complex originated holograms (eye-catching but at the same time easy to understand), this will increase brand awareness and loyalty, preventing consumers from being duped into purchasing a counterfeit. Digital authentication technologies not only authenticate products, but are also a powerful tool for marketers to interact with the brand’s customer base in the form of segmented promotions or new product information. This in turn will encourage consumers to learn how to spot fakes and to buy genuine products.

For luxury brands to truly put a line in the sand when it comes to counterfeiting, they must take this multi-pronged approach. The counterfeiting of luxury goods is likely to cost brands not millions but billions of dollars in the coming years. Yet, the hardest thing to win back is a consumer’s trust regardless of if they know they’re purchasing a fake or not – that is, once the brand’s reputation is tarnished, it’s likely to take years to repair.

Brand protection strategies for the fashion & luxury industry

Topics: Counterfeiting, Luxury Goods, Product Authentication, Mobile Authentication