Counterfeit items have been a growing problem for brands this year, but now consumers are also expressing greater concern about the authenticity of their purchases. According to new data from retail technology company Intelligence Node, 66% of consumers are at least moderately concerned about purchasing a counterfeit item — despite only 17% reporting that they have done so.
“The counterfeit market has been on the rise for quite some time and, according to a Forbes study, sales from counterfeit and pirated goods total around $1.7 trillion every year — more than drugs and human trafficking,” said Sanjeev Sularia, CEO at Intelligence Node. “This rampant growth, along with the fact that counterfeits are often so identical to original goods that customers might not even realize that they are getting duped, [means] there is valid concern about counterfeits amongst buyers.”
This presents a challenge for both brands and merchants, as a counterfeit product damages brand integrity while also losing consumer trust for both vendor and retailer. Even if a customer has not experienced a counterfeit product themselves, they may be inclined to choose an alternative option if they repeatedly hear about inauthentic purchases.
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Marketplaces are particularly prone to this mistrust, as they rely on third-party sellers who are harder to monitor and keep compliant. Consumers reported that eBay (80%) and Amazon (53%) were the most likely sites to sell counterfeit goods, with several choosing to abandon shopping at those platforms altogether (20% and 19% respectively). This kind of customer loss could have large revenue ramifications.
Resale platforms were also found to be vulnerable to counterfeit fears. Sites like Poshmark, ThredUp and The RealReal are mostly associated with second-hand luxury apparel items, which are still worth a considerable amount and highly coveted. This makes the category more vulnerable to fakes, due to the desire for many people to acquire items they cannot afford at regular prices.
“Our surveys indicate that over 70% of consumers buy counterfeits intentionally, largely due to price considerations,” said Saluria. “This puts the onus back on brands and retailers to have strong e-governance policies in place for tracking counterfeits and unauthorized seller violations in real-time.”
MAP policies — and the enforcement of such policies — can help brands track and stop seller violations. However, these efforts must be publicly communicated in order to help ease consumer concerns. Saluria recommended that brands use their marketing communications to honestly acknowledge the cause of any mistrust, as well as outline the steps being taken to ensure authenticity.
Some luxury brands have more work to do than others. Consumers voted Louis Vuitton (56%) and Gucci (52%) as the brands most likely to be counterfeit items. Within athletic shoe brands, consumers chose Golden Goose, New Balance and Vans as the most likely to be faked.
Sneakers have increasingly been at high risk for counterfeiting, due to the rapid category growth and demand for limited-edition product drops. Footwear reported the highest instances of counterfeiting between 2013 and 2016, according to an OECD report. The lower price point and easier accessibility of fake product has led to a thriving black market, with U.S. Customs and Border Protection seizing $2 million in counterfeit Nike sneakers last year.