The luxury brands industry has always been on the high radar of counterfeit manufacturers who produce counterfeit products. However, counterfeiters have witnessed that luxury products always retain their demand irrespective of changing occurrences and scenarios. It is because luxury products associated with social-adjustive attributes more than functionality are deemed to satisfy a consumer’s need to present themselves well against the world. More so, the social media climate and influencer’s economy have given rise to an increase in the demand for these luxury brands.
While the demand for luxury products has increased, they are either not readily available or often don’t conform to the abundant purchase habits of consumers.
Modern consumers have started to look for quick disposable items that they can discard with every new fashion status appearance. On the other hand, luxury brands believe in delivering high-quality products manufactured with extensive creativity and research and have benchmark price tags for their value. In contrast, the modern consumer is up for fast fashion and would care to purchase multiple alternatives instead of one genuine item.
As a result, counterfeiters witness this demand and the gap created. Therefore, they introduce fake products in the market which conform with the fast fashion trends and are light on transactions.
Luxury items are often — as per a research conducted by the Association of Consumer Research by the title of “Why do consumers buy counterfeit luxury brands?” — associated with social-adjustive attitudes and value-expressive attributes of a consumer.
Social-adjustive attitude defines the need of consumers in favour of the form and image of a product, which is directly linked to the social appeal function. In contrast, the value-expressive is associated with intrinsic aspects like quality and reliability.
The counterfeiting of luxury items falls under the umbrella of social-adjustive function, where customers are lured more by the appearance of a product than its reliability and quality. However, customers do seek quality in counterfeits as well but are okay with the slightly meagre quality of the products.
But, that tells the consumer-side story of purchasing a counterfeit product.
What happens to a brand when there is an increase in the purchase of counterfeit products associated with their name?
Why is the Luxury Brands Industry so affected by Counterfeited Products than any industry facing the problem of counterfeiting?
Luxury brands like Louis Vuitton, Hermes, Gucci, and some ultra-exclusive brands like JaegerLeCoultre create products of utmost importance to creativity, exclusivity, craftsmanship, precision, and innovation. These brands value the artists and their craftsmanship which distinguishes them from other brands for their rare, exclusively served and tailored experience — providing excellence in what they create.
The designers invest years in developing a design for the product, which needs to be protected under the Intellectual Property Rights for their peculiarity.
1. Luxury brands products are comparatively less damaging than other consumer products
Luxury products often are not directly associated with the damage and harm caused by any other fake consumer product. Such as pharmaceuticals, electronics, or cosmetics can directly negatively impact a person’s physical and mental health, which in some cases can be detrimental to endure.
Whereas luxury products are merely a means of carrying yourselves and are associated only with the products that contribute to social-adjustive needs instead of fulfilling functionalities.
As a Result: Counterfeiters are aware of the less damaging nature and the high demands of these luxury products. Therefore, they introduce many fake luxury products purporting only to satisfy appearances and presentations.
Moreover, these products are less intricate in their manufacturing processes and require fewer resources to produce. This comparatively less effortlessness gives counterfeiters an edge over other products in welcoming hefty sums.
2. Counterfeits target the brand associations of Luxury Brands
Selling fakes and infiltrating the shelves with dubious products is a standard method of how counterfeiters target the brand owners and the corresponding associations.
By duping customers into purchasing a counterfeit luxury brand’s product, they nullify the efforts and creativity of the right holders and brands put in their market testing and the anticipated sales.
As a Result: When a customer finds out the product is fake and not meeting the claimed standards—which they thought it would consider the genuine purchase—it directly causes them to disregard the brand and the corresponding associations from their next purchase.
Therefore, luxury brands take a direct hit in creating a negative image and losing the respective sales that would have occurred in an otherwise situation.
Ultimately, the luxury brands are collectively affected by incurring losses in manufacturing, distribution, and sales.
3. Fake products create a negative perception of the quality of Luxury Brands
In a survey conducted by Redpoints, it was found that many correspondents claimed to have been duped into purchasing a substandard product — which they were unaware was a counterfeit. In response to victimisation, they preferred not to buy the product of that particular luxury brand for its proximity to counterfeit products.
The question is if consumers would reconsider purchasing a product from the same brand in a case where the brand has claimed their reimbursem*nt in some configuration?
Even if consumers considered purchasing, they would hesitate to grab a product for its probability of being counterfeit. Therefore, it will take time for a consumer and a brand to retain the trust.
As a result: Luxury brands are affected by one single instance of counterfeiting, thus losing a customer either forever or for a period of time. Unfortunately, these instances are not one in a million and often occur with customers. Therefore, luxury brands are constantly losing their trustworthy consumers for one such instance of counterfeiting.
4. Devalues the perception of owning a luxury brand product
The consumer who earns average often searches for options that fulfil the perception of owning a luxury brand product and is also pocket-friendly. Moreover, these consumers do not usually look for a luxury brand but rather confine themselves to non-branded products that meet their functionality needs.
However, any such instance of duping them for a fake product changes their perception of owning a luxury brand product.
As a result: This dubious practice of counterfeiters and the change in consumers' perception leads them not to prefer to buy any luxury product for its odds of later finding it as counterfeit. Therefore, it impacts not only one particular brand but several brands’ sales and reputation, eventually reducing the numbers.
5. Stalls the demand for luxury brand products
When fake purchases dupe consumers, they do not prefer buying any products from that particular brand or in general. In some cases, as mentioned above, they even neglect buying luxury brand products for their questionable credibility.
As a result: Luxury brands are affected by not receiving any demands for their products in a particular market, and eventually, the sales start to stall. Therefore, brands incur abrupt losses in their potential markets.
Concluding Words
Since luxury brands are committed to their excellent products, they tend to release them in limited quantities. The gaps in demand and the unfulfilled desires make opportunities for counterfeiters. Counterfeiters manufacture and deceive consumers with low-quality fakes to fulfil their needs and meet the gaps.
In the luxury industry, originality and scarcity are the main drivers of the success of brands. Therefore, possessing any luxury product that is original and scarce is considered well-to-do.
As a result, counterfeiters release fakes and replicas that are the look-alikes of a genuine product that will make any person’s appearance motivation satisfied. All these factors collectively are responsible for why counterfeited products affect luxury brands.
I am an expert in the field of luxury brands, with extensive knowledge and experience in the dynamics of the luxury industry and the challenges posed by counterfeit products. My expertise is grounded in both academic research and practical insights gained from working closely with luxury brands and studying consumer behaviors in this niche market.
Now, delving into the concepts used in the provided article:
1. Social-Adjustive Attitudes and Value-Expressive Attributes
The article highlights the importance of social-adjustive attitudes and value-expressive attributes in the context of luxury brands. Social-adjustive attitudes refer to consumers' preferences for the form and image of a product, linked to its social appeal. On the other hand, value-expressive attributes are associated with intrinsic aspects such as quality and reliability.
2. Intellectual Property Rights (IPR)
Luxury brands invest significantly in creativity, exclusivity, craftsmanship, precision, and innovation. The mention of protecting designs under Intellectual Property Rights (IPR) reflects the legal framework these brands leverage to safeguard their creations from imitation.
3. Consumer Perception and Trust
The article discusses how counterfeit products create a negative perception of the quality of luxury brands. It emphasizes that even if consumers reconsider purchasing from a brand that has claimed reimbursem*nt for a counterfeit product, trust may take time to rebuild. This underscores the importance of consumer trust in the luxury industry.
4. Brand Associations
Counterfeiters target brand associations by selling fake products that mimic genuine luxury items. When consumers discover they have purchased counterfeit goods, it not only harms the brand image but also affects future purchasing decisions, leading to a direct hit on sales.
5. Scarcity and Originality
Luxury brands thrive on the principles of scarcity and originality. The article discusses how counterfeiters take advantage of the gaps in demand and unfulfilled desires by manufacturing low-quality fakes. The scarcity and originality of luxury products make them attractive, and counterfeiters exploit this by producing replicas.
6. Impact on Sales
Counterfeited products impact luxury brands by causing losses in manufacturing, distribution, and sales. The negative consequences include a decline in consumer trust, a damaged brand image, and a stall in product demand, ultimately affecting the overall success of luxury brands in the market.
In conclusion, the luxury brands industry faces unique challenges due to the complex interplay of consumer perceptions, brand image, and the impact of counterfeit products. The article provides insights into why luxury brands are particularly susceptible to the adverse effects of counterfeiting.
