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business Editor's pick sustainability technology

SXSW 2018: The RealReal on how technology will help stay one step ahead of counterfeiting

The RealReal
The RealReal

Future technologies will not only help curb the counterfeit market, but act as vehicles for brand storytelling, said Graham Wetzbarger, chief authenticator of second-hand e-tailer The RealReal at SXSW.

The advent of technologies that combat fakes may have hit strides over the past few years, but the problem is far from being tamed, he said. Even though the USA counterfeit industry experienced an 8% uptick in seizures at border control from 2016 to 2017, it is becoming increasingly difficult to target illegal goods from navigating from country to country. At present, only 10% of counterfeit goods are seized, and the industry retains $1.7 trillion in value globally, said Avery Dennison’s director of digital solutions Julie Vargas in the same session.

The challenge is outsmarting counterfeiters, who are operating in a much more granular manner, Wetzbarger noted. While in the past goods would arrive in large quantities via shipping containers, they are now coming in via airmail through local courier services. Illegal goods are also produced and retailed through a variety of channels, from very real looking, but fake e-commerce websites, to the dark web and last mile counterfeiting.

For young and label-hungry consumers in cities such as Seoul and Moscow, buying fakes is the most viable option when import taxes are too high, or there is little to no access to on-trend labels such as Off-White and Vetements, said Wetzbarger.

Tapping into the digitally-savvy behaviour of these shoppers, counterfeiters are becoming influencers in their own right and gaining a loyal following on social media. Hypebeast online publication Highsnobiety now runs Counterfeit Culture, an online video series that explores the culture globally – an indication that beyond supporting an illegal trade, fake goods are now becoming a social currency among a niche group of consumers.

Beyond traditional tools of authentication – such as inspecting the material and construction of goods – Wetzbarger also stressed the importance of introducing tags to not only tell the product’s story, but also act as an extension of the brand. In this matter, new technologies such as blockchain are starting to emerge to enable brands to have more control of tracking and developing content for individual goods.

“There’s a secret sauce to always staying one step ahead of counterfeiters. When talking about the secondary economy it’s not a perfect science, but technology can help with that,” said Vargas of Avery Dennison.

The deployment of blockchain will also go hand-in-hand with a consumer need to be constantly connected and informed about the provenance of their purchases. Wetzbarger suggested that handbags, which are the largest product category on The RealReal platform, could tell the story of previous owners if they chose to participate, for example. He also talks of a future in which a Clueless-type of digital closet, where connected labels can track what garments the consumer has, how often they are used, and what items are missing in their style repertoire.

As recently seen by Stella McCartney’s announcement of collaborating with The RealReal to authenticate and officially sell her label’s merchandise, there is a strong element of sustainability attached to buying from the circular economy. For consumers, it means having another home for an item that may no longer be to their taste, but still holds quality and meaning. For labels, it is continuing the lifecycle of a brand and strengthening its value, said Wetzbarger. “Brands are getting behind this because they want their products to hold equity.”

Adding a digital ledger on the blockchain to every product could have a myriad of benefits not only to first-time buyers, but to re-sellers, therefore. “How interesting would it be if a product was always telling data?” concluded Wetzbarger.

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Campaigns Editor's pick Retail

Diesel pop-up sells limited edition “fakes” as part of SS18 campaign

Deisel pop up from Diesel
The “Deisel” pop-up from Diesel

Diesel is looking to reinforce its authentic roots with a “fake” pop-up store during New York Fashion Week. As part of its latest campaign celebrating imperfection, the brand opened “Deisel” in NYC’s Chinatown – a neighbourhood known for touting knockoffs – selling seemingly fake goods.

The stunt was eventually revealed on social media, as Diesel shared a video depicting footage of the store. Inside, the pop-up space was set up to look improvised and blend in with its Canal Street neighbors, while shop assistants tried to convince confused passersby that the goods were real.

Once the secret was out, Diesel fans began to form long queues outside the store, trying to get their hands on the limited edition goods, which were also available for purchase in Europe online.

Speaking to reporters, Renzo Rosso, founder of Diesel and president of its parent company OTB Group, said the aim of the campaign is to play on the irony and sense of humor he believes the brand has always relied on, which has been lost over the past few years.

“Diesel is back,” he said. ”Diesel is modern. Diesel is a unique brand. Diesel is still alive with the real irony and with the real DNA that it used to have before.”

Andy Bird, chief creative officer at Diesel’s recently appointed agency Publicis, told Adweek: “I think a brand like Diesel has the balls and the right to talk like this. There aren’t many brands that would take a calculated risk like this, but because they kind of know that they already have the cachet with the past history of advertising, they’ve always been a bit more adventurous and it fits perfectly with their outlook.”

Moving forward, the brand believes social media and campaign stunts are becoming a major focus for engagement. According to Rosso, the next soon-to-be-released stunt will see an individual jump from atop St Marcus tower in Venice, Italy.

In our recent episode of TheCurrent Innovators podcast, Stefano Rosso, Diesel’s CEO of North America, talked in-depth about the brand’s approach to challenging conformity.

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business e-commerce Editor's pick

Will Alibaba’s anti-counterfeiting deal with Kering stall luxury counterfeits?

Gucci - Kering anti-counterfeiting
Gucci

French luxury conglomerate Kering Group and China’s e-commerce giant Alibaba Group reached an agreement August 3 to jointly fight against the counterfeits on Alibaba’s online marketplaces to protect brands’ intellectual property rights.

As part of the agreement, the details of which were made public in a press release co-issued by the two parties, Kering has also decided to withdraw a lawsuit that it filed against Alibaba in 2015 in New York district court accusing the e-commerce site of being involved in the sales of fake handbags, watches and other items under the names of brands owned by Kering. The cooperation marks an official end to the legal dispute between the two companies.

Alibaba and Kering have established a “joint task force” to collaborate on the anti-counterfeiting actions, the public statement said. The two companies will exchange useful information and work closely with law enforcement bodies. Kering will also benefit from Alibaba’s advanced technology capabilities in identifying counterfeiters on its platforms.


Will this move by Alibaba really assure luxury brands?

Owning elite luxury labels including Saint Laurent, Gucci and Balenciaga, Kering’s endorsement represents a milestone for Alibaba’s ongoing efforts to combat the counterfeit issues on its platforms in order to attract more luxury brands to work with.

However, it is interesting that Saint Laurent has just decided to work with Alibaba’s major rival JD.com earlier this week. Moreover, one major reason for that cooperation, according to the brand’s CEO Francesca Bellettini, is that the presence of Farfetch (of which JD.com acquired a nearly $400 million stake in June) has helped mitigate their worries over the counterfeiting issue.

There is little doubt that Alibaba has been working hard on this area in recent years. The group set up the “Alibaba Big Data Anti-counterfeiting Alliance” in mid-2016, which aims to use modern technology to identify counterfeiters. A number of luxury brands such as Louis Vuitton, Shiseido, and Swarovski are all members of the Alliance.

On many public occasions, Alibaba’s founder, Jack Ma, has been quite outspoken about the counterfeiting problems in China and has publicly called for the government to devote more legal efforts to it.

A recent article published by Luxury Daily, nonetheless, views the company’s current coalition as a failure to achieve what it has promised, namely, to curb the sale of counterfeit luxury goods on the Chinese e-commerce site. According to the publication, Alibaba is still “lax about counterfeiting,” while counterfeiters have become much more sophisticated than ever and consumers have better access to fake goods due to the flourishing of social media and modern technologies.

Chinese markets have become a pillar of Kering’s various businesses as per recent earnings reports. The conglomerate’s core brand, Gucci, has just tapped into the country’s online market through establishing its own e-commerce site. It is thus not so surprising to see Kering ceasing fire on the dominant market player over the counterfeiting issue. But the partnership, for either side, is possibly far from being worthy of celebration.

By Yiling Pan @SiennaPan

This article was originally published on Jing Daily, a Fashion & Mash content partner.