Fashion, Social Media and eCommerce Collide with Counterfeiters
Social media has revolutionized so many facets of society and commerce. Created to connect people, brands quickly realized that these powerful tools were a natural fit for consumer engagement. These channels deliver a captive audience that comes specifically to each platform to engage, connect, and observe for hours on end. While many industries leverage social media for eCommerce, customer service, and beyond, the medium is well suited for fashion brands. Inherently visual and built to trend, social media platforms also provide brands with a direct way to merchandise and execute eCommerce in the app itself.
It sounds like a dream, but for many fashion brands, it can be a nightmare. Social media accounts are free and easy to set up which makes them useful tools for bad actors to abuse brands and carry out one of the costliest commercial crimes for the fashion industry: counterfeiting.
An Industry Exposed
The fashion industry is a highly competitive, crowded market with mountains of creative material to protect. Intellectual property is an especially crucial asset to brands and not just the designs on the runway, consumer goods we buy each day like perfumes, cosmetics, and accessories are the bread and butter of a brand’s bottom-line and require licensing as well. These goods also have longevity and can be sold beyond more than one season.
Trademarks like logos are how consumers identify a brand, though signature traits, colors, and styles can also create a unique brand identifier. Think about the Burberry tartan, or the Christian Louboutin red-soled heels, or the Nike swoosh – these brands have “owned” those details that make their products stand out from competitors. Because so much of a fashion brand’s identity is based on its designs and intellectual property, the fashion industry is ripe for counterfeiters.
And while brands do have some protection through patent and copyright law, there are several nuances in the laws which make it particularly difficult to litigate this crime. For example, in copyright law, the artwork is only copyrightable if it can be “separated” from an article to which it’s applied and used on another article. And with Trademarks, brands must register trademarks in each country where the goods are sold for the trademark to be valid. Read our blog post on this topic, to find out how brands can remain resilient to bad actors.
A Costly and Catastrophic Problem
Counterfeiting is a sophisticated and costly fraud for fashion brands. The counterfeit fashion industry generates $1.2 trillion a year for the scammers who profit from it. eCommerce and social media are powerful vehicles for cybercriminals to execute attacks on the unsuspecting public. This results in an estimated loss of $30.8 billion to high fashion brands alone, globally. And that is before any litigation costs result in fighting the problem.
As mentioned above, eCommerce and social media are powerful vehicles for cybercriminals to execute attacks against brands and consumers. There are more than 2.5 billion social media users worldwide and consumer research released in June by the NPD Group revealed that one in three consumers between the ages of 13 and 24 had some sort of purchase interaction when it came to fashion and social media over the past year. An audience this large on platforms that are poorly regulated makes it a hotbed for brand abuse.
Bad actors execute several kinds of misconduct through online mediums. Fake social media accounts that imitate those of well-known brands or imply some association with them. These fake accounts can cause consumer confusion and are used to redirect legitimate traffic to illegitimate sites used to sell substandard or counterfeit goods. Some of these sites may be used for phishing, aimed at tricking consumers into sharing their login credentials and financial information.
Other tactics include using hashtags to draw in consumers, private groups that advertise anonymously, or having a page URL that is just slightly dissimilar to the brand’s legitimate page name. Fraudsters also use well-hidden listings in online marketplaces with photos of merchandise from the brand’s website. And while it may be feasible to take down some of these criminals, the sheer volume of them can be an insurmountable challenge.
Scale to Stop Abuse at the Source
The key to fighting the counterfeit challenge isn’t trying to prosecute every counterfeiter your brand encounters, that’s neither scalable nor is it cost-effective. The key is to protect your brand upstream from the crime with technology that can monitor your social media accounts that stop brand abuse at the source.
LexisNexis Brand Protection powered by Appdetex helps brands do just that. Appdetex’s technology monitors social media and online marketplaces around the clock with advanced data analytics and up-to-date metrics so that brands can identify both new and unknown abuse, as well as keep tabs on previous offenders.
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