Counterfeiting maintains a high-profile priority for luxury and apparel brands as companies continue to spend time and resources on enforcement and prosecution of counterfeiters.
However, the fight against counterfeiting now includes a focus on addressing the demand for fake products, according to a recent panel discussion moderated by WWD. The participants included in-house counselors for some of the top U.S.-based apparel, accessory and cosmetics brands. The role of the Internet as well as customer education and outreach were among their top concerns.
The participants were: Michael Colosi, corporate vice president, general counsel and secretary, Kenneth Cole Productions; Barbara Kolsun, senior vice president and senior counsel, Seven For All Mankind; Sara Moss, executive vice president, general counsel and secretary, Estée Lauder, and Carole Sadler, senior vice president and general counsel, Coach.
WWD: How would you describe the issue of counterfeits today?
Barbara Kolsun: The Internet and auction sites have been an absolute nightmare for luxury brands.
Carole Sadler: Counterfeiters are becoming savvy in what they’re doing and are becoming more and more difficult to track down; the Internet helps them hide.
Sara Moss: The Internet also makes counterfeit goods more available to more consumers and it smudges the legitimacy. If there’s a street vendor on a corner with Rolex watches, it raises red flags. As the counterfeiters get more sophisticated and have Web sites that look more legitimate, the consumer may not know the difference.
Michael Colosi: People are becoming increasingly comfortable shopping on the Internet and they naturally assume that the things they buy are genuine. If you buy something in Chinatown, you come with the knowledge beforehand that it’s likely to be counterfeit. Consumers very often think that what they’re buying online is real.
WWD: How can brands address the demand for counterfeit products?
S.M.: We can do more as an industry to really let the consumer know the negatives of purchasing counterfeit goods, not only the criminal activity, which obviously is true, but our consumers are interested in environmental issues and sustainability, in child labor issues, in standards of safety and health.
M.C.: I recently had a conversation with a friend who has teenage children, and she was trying to defend the fact that she had a fake bag. It’s theft of intellectual property, of other people’s hard work. Would it be OK for your child to go and steal from Coach just because it’s a big company? I don’t think people feel that level of stigma for the theft of intellectual property that they do with real goods, but it’s essentially identical.
B.K.: The biggest challenge for all of our companies is educating consumers. It has to start at a very basic level. We don’t teach about intellectual property in schools. I don’t think most educators at high levels realize how much the future of this country and the future of the jobs students are going to be doing involve intellectual property. I would venture to say that 100 percent of jobs going forward, since we as a country don’t manufacture anymore, will have something to do with intellectual property.
M.C.: Consumers are very concerned about social compliance and they want to make sure that the products they’re buying are made in safe places. As American companies, all of us spend a lot of time, energy and money to make sure that the sources we use are appropriate for the brand and consistent with what American consumers would expect. Needless to say, counterfeiters are not held to those standards.
C.S.: Social responsibility is a very hot topic, along with corporate responsibility. It’s about ethics and morality. If you have an idea and you’re a kid and someone else copies your idea, you’re not going to be happy about it. There are very easy ways to teach, in an age-appropriate way, the concepts that we’re talking about.
WWD: How have you reached out to consumers?
B.K.: We have a form on our Web site under customer service. It describes in a couple of graphs our counterfeiting problem, where you buy the real thing, where you’re not going to get the real thing. Then we have a form they can fill out identifying where they’ve seen counterfeits. Once a week, somebody faxes that in, identifying a retail store or some market we might not even do business in. I got one yesterday from South Dakota about a counterfeiter claiming to be the only authorized dealer of Seven For All Mankind jeans in the state. That’s brand loyalty, people want the real thing.
C.S.: We have a hotline you can call and an Internet form. What I’ve found most amusing is that sometimes counterfeiters will call in reporting on other counterfeiters because they don’t like that they’ve taken over their territory.
WWD: How can purchasers of your products take responsibility for the legitimacy of those products?
C.S.: The message we always send out is, if it seems too good to be true, it is. And buy our products through authorized channels of distribution. That is how we guarantee and assure the consumer that she or he is getting the legitimate real article.
B.K.: When you buy the real article, you have service in connection with it. If something breaks, it gets repaired. That’s part of what makes a brand a brand, is that level of service.
M.C.: Just as I would say that it’s important for the consumers to buy directly from a source they know is reputable, the same is true for retailers themselves. We’ve actually had situations where somebody bought diverted product and ended up with something that was a mixture of diverted and counterfeit product … We’re absolutely going to have to take the action that we need to in those situations, not only at the consumer level, but at the retail customer level.
S.M.: The message to retailers is, if you don’t buy from an authorized source, you buy at your peril….It is important for consumers to understand why this is detrimental and for the retailers to understand why it’s detrimental.