The weight of counterfeit goods in streetwear: safeguarding brands and protecting consumers
In the vibrant world of streetwear fashion, creativity and authenticity are the cornerstones that drive innovation and captivate consumers. However, lurking in the shadows of this dynamic industry is the pervasive issue of counterfeiting.
This illicit trade not only undermines the integrity of brands but also jeopardises the trust of loyal consumers. Unfortunately, counterfeiting is an ever-present challenge, even for the streetwear industry. From high-end labels to emerging designers, no brand is immune to its far-reaching effects. The allure of streetwear's unique designs and cultural relevance has created a booming market for counterfeiters seeking to exploit the popularity of established brands.
The weight of the problem
According to The Guardian, counterfeit business is worth around $600 billion worldwide per year, with about 1 in 10 sold products that may be a fake.
Streetwear, with its rapid turnover of trends and styles, is particularly vulnerable to counterfeiters who can quickly replicate popular designs and flood the market with cheap imitations. It is no coincidence that the largest number of monthly online searches related to fake products globally involves a streetwear brand - Supreme, with an average of 29,000 monthly searches.
Counterfeit products lead to a significant loss of revenue for legitimate streetwear brands. When consumers purchase counterfeit goods, the brand is losing out on potential sales and profits.
Moreover, poor quality or dangerous counterfeit goods can tarnish a brand's reputation. If consumers associate subpar products with a particular brand, it can erode trust and loyalty.
Beyond the economic damage, fakes also harm streetwear in other ways. First of all, if counterfeiters are able to quickly replicate new designs and release them before the authentic brand, it discourages innovation. Brands might be less inclined to take creative risks if they fear immediate replication.
Then, legitimate streetwear brands invest significant resources in design, marketing, and quality control. When counterfeiters copy their designs without incurring these costs, it creates an unfair competitive advantage.
Counterfeit goods not only hurt brands, but also consumers, communities and the environment
Counterfeit products have wide-ranging negative impacts also on people and the planet.
Damage to people and communities
First of all, counterfeit goods may not meet safety and quality standards. For example, clothes might have been dyed with toxic products, or they might have harmful accessories and decorations. This may lead to serious health risks.
Counterfeit products are often of lower quality compared to genuine ones. They may break or fail to perform as expected, leading to frustration and financial loss for consumers. Economic losses are a reality especially for those consumers who unknowingly purchase fake products, since they are essentially paying for something that does not deliver the value or quality they expect. This erodes confidence in brands and industries as a whole, making it more difficult for legitimate businesses to thrive. As a result, the sale of counterfeit goods has an impact on employment, with legitimate brands likely to reduce investment in human resources or come to layoffs to cope with losses.
Finally, the production and sale of counterfeit goods are often linked to criminal organizations. Purchasing counterfeits may indirectly support illegal activities such as human trafficking, drug smuggling, and organized crime. These activities have a strong negative impact on communities.
Damage to the environment
As we have said, counterfeit goods often do not meet quality and safety standards, and are made from polluting materials or processes. All of this leads to environmental damage. Beyond that, fakes by definition should not exist, so they cannot be considered sustainable.
But the negative ecological impact of counterfeits goes further. Because it drives consumers away from more sustainable choices, it drains economic resources that legitimate brands could invest in sustainable innovations.
Protecting brands and people: a multi-faceted approach
Streetwear brands have several avenues available to protect themselves. Let's take a look at some of them:
- Strategic trademarking and intellectual property protection: establishing a strong legal foundation is paramount in safeguarding a streetwear brand. Trademarking logos, designs, and slogans provides a legal framework to defend against counterfeiting. Intellectual property protection extends to copyrights and design patents, ensuring that original creations are shielded from unauthorized reproduction.
- Collaborative industry efforts: collaboration among industry stakeholders, including brands, manufacturers, and retailers, is crucial in the fight against counterfeiting. Sharing intelligence and best practices can help identify and mitigate potential threats, creating a united front against illicit trade.
- Education and consumer awareness: informed consumers are a brand's most powerful ally against counterfeiting. By educating the public about the risks associated with counterfeit goods and providing resources to verify authenticity, like that offered by Certilogo, brands can empower their customer base to make informed purchasing decisions.
- Technological solutions: embracing cutting-edge technologies can provide an extra layer of security. For example, connected products can play a crucial role. They often come equipped with unique identifiers like RFID tags, QR codes, or NFC chips that can be scanned or read using a mobile app or a specialized device. This allows consumers and retailers to verify the authenticity of the product before purchase. However digital enablers alone are not enough to secure the connection between consumers and products.
- Certilogo’s Secure by Design approach: 17 years of experience in the authentication and anticounterfeiting business have allowed Certilogo to collect evidence of counterfeiting practices showing, without a doubt, that counterfeiters will replicate every element defining the branded products: visible features, the digital enabler, i.e. the tag embedding the Unique Digital ID, and the branded journey, including the Digital Product Passport, or a very similar and convincing version of it.
This is why a Secure by Design approach such as Certilogo's is necessary. When consumers connect to a product via its digital marker, they’re taken through an authentication journey designed to collect implicit and explicit information provided by the product, the user and their device.
Captured data are analysed in real-time by a proprietary Fraud Detection System, which is based on Artificial Intelligence to not only robustly verify authentic products, but also importantly, recognise and manage counterfeit or illicit products.
The frictionless consumer experience is managed in real-time, providing access to gatewayed premium content and services, or refund assistance in case of the purchase of a fake. Brands are provided with data that assist brand protection investigations, enrich CRM profiles and support other business strategies throughout the organisation.