A luxury brand’s most valuable assets are its status, heritage, quality and products’ exclusive price tag. However, it’s estimated that sales of counterfeit goods now represent 7% of world trade and the global market for luxury fakes has exploded, especially in the digital world.

So how can luxury brands protect their online reputation and brand prestige in the face of an ever-increasing demand for counterfeits across the digital landscape? The answer is simple – through Social Media Monitoring.

Counterfeiting is a global, multibillion dollar problem that has serious economic ramifications for both businesses and consumers. The World Customs Organization estimates annual global trade in illegitimate goods is about $600 billion, with this figure is expected to rise to $1.7 trillion by 2015.

It’s safe to say that counterfeiting is everywhere and while luxury counterfeits are not a new phenomenon, with technological advances and sophisticated new ways to reach consumers, the business is increasing rapidly.

In the past, luxury counterfeits were often shipped in large cargo containers and passed through numerous middlemen before reaching consumers on the streets. Now counterfeit sellers set up online presences on auction or marketplace sites and ship luxury counterfeits directly to consumers. They also use the Internet and social media tools to generate web traffic and to divert consumers to rogue e-commerce websites selling their goods – which often have the same look and feel as the brand owner’s site. Compared to the purchase of a fake handbag on the street, the purchase of a bag online makes it harder for a consumer to tell whether the product is genuine. An online ad for a Gucci bag could show a photo of a genuine Gucci bag, but the purchaser would actually receive a fake one.

The counterfeit seller may create pseudo product reviews, blog entries and rogue social media profiles to enhance their legitimacy and according to 2009 Eurobarometer statistics, 22% of EU citizens have unknowingly bought counterfeit goods. As shopping online is considered entirely legitimate, online counterfeit products may attract consumers who would never purchase a Gucci handbag in a dark alley.

The Internet creates a situation where the marketplaces for counterfeit products and for the genuine article are suddenly the same. Furthermore, online shops give the buyer a sense of anonymity and impunity. Given the seemingly boundless scope of the Internet, luxury brand owners come across anonymous online counterfeit sellers every day.

Tarnished brand equity & online brand reputation

A luxury brand’s most valuable assets are its status, its heritage, the quality of its work and materials and the price. However, luxury counterfeits are almost always badly made. Although they may look the same, the materials are of poor quality and do not meet the high standards in which luxury brands take pride. This perception of counterfeit products has a negative effect on brand associations, and in particular on the perceived quality of luxury brands and the personal status and value of owning luxury brand goods.

The results cause serious damage to the luxury brand’s reputation and tarnished brand equity. Furthermore, counterfeit products reduce demand for luxury brands and lead to lost revenues.

Identifying counterfeiters with social media monitoring.

It’s often difficult for consumers to distinguish between an authentic or counterfeit good at the point of sale and brands such as Celine, Chanel, Ugg Australia, Mulberry, Ray-Ban, Gucci, Coach and Louis Vuitton have all fallen victim to this very issue, and have been even targeted by unauthorised websites that use social media to promote their claims of selling luxury goods. Even online marketplaces which allow third party sales, such as Amazon and eBay – accounting for tens of billions of dollars’ worth of e-commerce each year, have inadvertently become a counterfeit breeding ground.

spot the counterfeit handbag
Spot the difference: The real Celine bag is the blue one on the left and the other two are counterfeits. The only way to tell the difference here is the placement of the detailing, which would be extremely difficult to ascertain when buying online.

This ‘social counterfeiting’ is a huge problem that brands, especially luxury names, cannot ignore and it’s safe to say that to successfully eliminate supply one must first eradicate demand. Without a doubt, social media and online marketing play an important role in educating consumers about the risks involved with counterfeiting. Through social media platforms, customers can achieve an unparalleled access to brands, which can in turn be channelled into learning more about the brand’s heritage, product quality, artisanal know-how, legitimate points of sale and the uncomfortable realities behind counterfeiting.

Proactively enforcing your brand with social media monitoring is a preventative measure that is worthwhile taking. With social media monitoring, Brands can keep their finger on the pulse and quickly identify counterfeiters by monitoring auctions, websites, sponsored links, social media sites and other online content that references the brand name or products.

monitoring luxury brand mentions on social media
Above is an example of social media monitoring, tracking mentions of luxury brands across online marketplaces such as eBay and Amazon.

As you can see from the image below – brand owners like Chanel, Armani & Louis Vuitton can also proactively run keyword searches for their brand name or products in conjunction with keywords like “cheap” or “discount” and filter these results by country, language and source to help identify potential counterfeiters.
Once this has been done, it is then possible to set up early warning alerting systems to help you get out in front early when problems do arise, with sufficient time to contact internet service providers and social media sites, asking them to remove rogue accounts before they gather ground and cause lasting damage to your brand’s reputation.

luxury brand social media monitoring results
Above we see sample results & related engagement metrics for several luxury brands across online marketplaces such as eBay & Amazon. This gives you a top-line overview of your results and helps determine quickly which mentions may require further investigation.