New York–As the countdown to the doorbusters deals of Black Friday (or Grey Thursday—Thanksgiving) begin so do the warnings from consumer advocates. If a deal sounds too good to be true it likely is, with more and more counterfeit goods creeping into Christmas creep.
It is no secret that shopping for luxury is a serious investment, so why are consumers still being duped into paying for fraudulent goods? According to new research from TrueFacet, the first online luxury marketplace for buyers and sellers, 84% of Americans are unsure if they would be able to tell the difference between a knockoff and authentic piece of jewelry or watch.
As part of its “Authenticity Guaranteed Report,” TrueFacet commissioned research firm YouGov to study luxury shopping trends, revealing that more than one in three (36%) Americans would even consider purchasing a luxury pre-owned item without proof of authenticity. With counterfeit goods accounting for nearly 10% of worldwide trade, which is an estimated $500 billion annually, it is clear that consumers need a more proper education on the importance of authenticity and understanding the worth of luxury items.
“When shopping for luxury, it is extremely important to know the right questions to ask before making a purchase,” said Tirath Kamdar, founder and CEO of TrueFacet. “With counterfeit products sneaking their way into some of the most heavily visited online shops like Amazon and eBay, being able to properly identify any red flags is not as easy as the average consumer may think. Demanding a certificate of authentication with every purchase and a money back guarantee should be a common practice with consumers, but in reality such requests are shockingly being overlooked.”
Additional key findings of the “Authenticity Guaranteed Report” include:
- A Diamond in the Rough – A whopping 80% of Americans with pre-owned or inherited luxury jewelry have little to no idea how much it is worth. As more shoppers are buying with reselling in mind, knowing where and how to secure the best value for pre-owned luxury goods is imperative. Consumers looking to sell their pre-owned luxury should be especially cautious of channels that will resell old items for a fraction of the price and then offer the seller an even smaller commission off the resale.
- Older Doesn’t Always Mean Wiser – When broken down by age, the research found Millennials to be the most knowledgeable about their luxury items’ worth, with one in four responding that they know exactly how much their pre-owned or inherited jewelry is worth. Those over the age of 54 were less knowledgeable, with only one in seven responding that they know exactly how much their pre-owned jewelry is worth.
- Value Earned with Age – While Millennials have a better understanding of their luxury items’ worth, the promise of authenticity becomes more important with age. While 67 percent of those aged 55 and older responded that a certificate of authentication was a crucial factor in buying a pre-owned luxury item, this percentage dropped to only 43 percent of Millennials responding the same.
- Timeless Beats Trendsetting – Buying an item that is on trend is vastly less important to American consumers than finding a piece that is unique and timeless, as more consumers desire items with a story behind them. When considering buying a pre-owned luxury item, only five percent of consumers care about an item being trendy, while 32% want to receive a truly unique item and 29% desire an item with timeless appeal.
Taken as a whole, the research also revealed a number of differences across gender when shopping for luxury. For instance, women are better at telling the difference between counterfeit and authentic jewelry than men (18% compared to 13%), but men are better at telling the difference between counterfeit and authentic watches than women (19% compared to 10%).
“Regardless of age or gender, savvy shoppers are drawn to the idea of receiving a fair price for truly unique items that have a story behind them,” said Kamdar. “But before making any new or pre-owned luxury purchase, the most important factor should be verifying whether or not the item is genuine. Because it is so hard to distinguish real from fake luxury these days, consumers are having an increasingly hard time shopping with confidence. Ultimately we want to make shopping for luxury fun again, which can only be achieved by providing a trustworthy and transparent experience for both buyers and sellers.”
More Counterfeits Sneaking Online
“Overall, more consumers are purchasing luxury goods online — we’ve noticed people are becoming more open to (and often times even prefer) shopping for luxury goods, including pre-owned items, online rather than pawnshops, etc.,” Kamdar said. “We’ve seen online jewelry sales growth to be 3.5 times greater than offline and have noticed that the number of online consignment shops launched since the recession has rapidly increased, which is largely due to the fact that people have been consigning their unwanted goods to local shops for years and now finally have a more convenient outlet to do so.”
The allure of walking into the store has been replaced in some ways by the ease and efficiency of browsing online by price point, brand or item. “Overall, we’ve seen people wanting the brands they love but want to be able to get them at affordable prices. Certified pre-owned has helped them do this. In regards to purchasing fakes, while savvy shoppers are drawn to the idea of receiving a fair price for truly unique items that have a story behind, the most concerning factor that may hold them back from making a purchase is the uncertainty of an item being 100% authentic,” Kamdar added.
“Unfortunately, as more consumers go online for luxury items, more counterfeit products are sneaking their way into some of the most heavily visited online shops like Amazon and eBay–one of the most recent and shocking examples of this would be Tiffany’s lawsuit against eBay after finding 74% of the Tiffany jewelry sold on the site to be counterfeit.”
The rise in counterfeit goods on major sites is an indication of just how cluttered and chaotic the market has become. Watches and jewelry make up 29% of counterfeit goods in the United States. Of course, there is always the fear that brands can be tarnished by a counterfeit scandal, but the greater issue here is with the site or forum consumers choose to make their purchase from. Trust is paramount in online luxury shopping, especially when looking for discounts, so the real question becomes whether or not you trust the platform you’re purchasing from.
About the “Authenticity Guaranteed Report” (Methodology)
TrueFacet commissioned YouGov Plc to poll the views of a representative sample of 1,169 U.S. adults. Fieldwork was undertaken between July 3-6, 2014. The figures have been weighted and are representative of all U.S. adults (aged 18+). The research was carried out online. www.truefacet.com