Many established designers were hesitant to embrace the virtual world. After all, their namesake founders began the collections in small shops or even rooms in their homes. Soon enough, the internet world caught on, and the ease of shopping made for big benefits to seasoned luxury retailers.
Then came the negatives.
Then came the negatives.
Despite the plethora of advantages to e-commerce, burdens and disadvantages come along as well. While luxury brands bring customer experience to the fingertips, so too, do counterfeiters and gray market producers. As we've discussed here many times, gray market goods are those produced in legitimate luxury factory settings, but outside of legitimate production terms. Counterfeiters usually take it a step further, producing their own look-alike items. These goods are generally 2's and 3's in the marketplace. Remember the Rating System?
Why Does This Really Matter? Everyone is Making Money?
With so many online squatters, luxury brands are forced to keep up constant vigilance over their brands online. This becomes extremely difficult when the internet is flooded with search terms, improper image use, licensing breaches, and sites changing every single day. But, who cares? The reputable brands get money from their base, and the counterfeit market gets money from their, wholly separate base, right? Nope.
We've discussed the great downside of counterfeits--the funding they provide for human trafficking and other horrible crimes. There is a damage to the designer, too (not eclipsing the trafficking, of course--just separate).
The crime to the brand--whether luxury founded in the 1800s or worked on tirelessly in a university studio this year-- hurts the bottom line. It hurts more, the name; the reputation. The problem here is the compromise to one's rights, image to the public, and invitation for confusion when consumers are looking for the right item to suit them.
Designers must be forever cautious of how they market their brand and where they allow it to be exploited. Just recently, Gucci owner Kering sued China's largest e-commerce brand over harboring fakes on the site. Nearly $82billion is lost annually to designers' fight against fakes. Many designers are putting millions into this vigilance--millions away from the design shop and brand promotion. Although the money is a major factor, let us not forget the disregard for brand reputation, too. It's so similar to one's personal reputation. Guard it with your life.