Attention Fashion Addicts
It's official: Here's the link to the OECD report concluding that, in some instances, counterfeiting and piracy are more profitable than trade in illegal drugs. In terms of volume, the rough estimate is USD $200 billion in international trade alone; fakes produced and consumed domestically or traded via the internet could add up to several hundred billion dollars more.
Quite a shopping spree, no?
From a classic Counterfeit Chic perspective, perhaps the most interesting part of the report is the nuanced discussion of consumer utility, particularly with regard to consumers who knowingly purchase fakes at low prices. In other words, what about Canal Street?
The report concludes that, assuming consumer utility to be a function of product quality and/or performance taking into account price, some consumers who deliberately buy fakes win and some lose. The problem is that it's hard to assess the quality of, say, a fake Rolex at the time of purchase. It may keep time for years, or it may fall apart at the first wearing. In the later case, the consumer loses -- and counterfeits don't usually come with warranties.
In addition, the report notes that there may be more generalized effects of the voluntary purchase of fakes on consumer utility, including less investment in innovation or abandonment of the market by some creators.
Consumers who are tricked into believing that they've bought the real thing, of course, nearly always lose.
The OECD's definition of consumer utility, at least in its executive summary (full report to be released later this month), doesn't necessarily comprehend the full scope of consumer motivation, however. Consumers who knowingly buy fake luxury goods -- as opposed to fake batteries or pharmaceuticals -- are often not merely acquiring a product; they're acquiring an experience. The tourist who carries her fake Gucci/Fendi/Chanel/Burberry/D&G handbag back to Timbuktu has a souvenir of her trip, a story to tell, and the thrill of having gotten away with something. She may try to fool her friends, she may show off the bag as a fake, or she may never carry it at all.
Advertisers and retailers have long understood the importance of selling an image or, more recently, an experience, rather than just a product. The OECD and design-based companies allied in the fight against counterfeiters must recognize the same thing if they are to understand the real nature of consumer utility -- and find ways to alter the consumer's calculus.
Many thanks to fabulous designer Emmett McCarthy for forwarding an article on the report -- and may you avoid being hit by counterfeiters for as long as possible.