Is Your Brand Prepared to Battle the Online Counterfeiters?

1/13/2014
As we enter 2014, retailers can hang their hats on these two pegs: consumers will continue to flock to shop in digital channels and consumers love a good deal. However, the increasing abundance of savvy online counterfeiters targeting deal seekers is creating major challenges for brands. It's important to understand the dynamics of deals and fakes across the ecommerce ecosystem in order to prevent brandjackers from stealing your revenue and customers.

Apparel and fashion brands are a prime target for counterfeiters and the digital world gives them more ways to appear legitimate that are beyond the reach of street-corner sellers. E-commerce sites hawking fake products appear professional, often featuring photography drawn from brands' most recent advertising campaigns, and present consumers with seemingly viable choices.  

Counterfeiters are smart about pricing, too, tricking consumers by pricing counterfeit goods to appear as legitimate goods on sale. Counterfeit goods are often offered at 25 percent to 50 percent discounts, comparable to end-of-season or 'blowout' sale rates. Because these prices are plausible, bargain hunters are that much more likely to snatch up counterfeit goods thinking they've just found an incredible deal.

With the increased sophistication of counterfeiters in digital channels, we've seen more bargain-hunters being duped by shady fashion sites.  We examined the trend more closely, analyzing nearly five million shopping sessions conducted over a nine-month period by U.S. and European shoppers. Were these shoppers looking for counterfeit goods?  Or were they just looking for a good deal?

We scrutinized traffic to sites visited by the shoppers, including 1,000 websites selling legitimate goods and 8,000 sites that we identified as selling counterfeit goods.  To determine the shoppers' motivation, we examined the search terms employed by the shoppers, such as 'fake,' 'replica,' 'cheap' or 'discount.'  Analysts segmented consumers according to whether they visited sites selling counterfeits and also according to whether their keyword searches were bargain-related or counterfeit-related.

The findings? About one in five U.S. and European bargain hunters (e.g., those searching on terms such as cheap, discount, or outlet) landed on sites selling counterfeits.  Overall, digital deal seekers outnumbered consumers seeking fakes at the rate of 20 to 1.

Interestingly, U.S. shoppers who seek out counterfeit goods use more specific brand names in their searches than shoppers who are merely seeking deals. In other words, those looking for fake goods are more likely to search on a brand name, while bargain hunters are more likely to search for categories of goods, such as kids, clothing, furniture, jackets and jeans.   In addition, U.S. bargain hunters do not search for as many high-end brands as online shoppers who specifically sought fakes.

Throughout our study, bargain hunters consistently used deal-oriented terms and did not use counterfeit-oriented terms. This behavior suggests that these shoppers were seeking bargains and believed that they were shopping on sites selling legitimate goods.  Conversion rates—defined as putting something in the shopping cart—for those site visits were higher than conversion rates for visits to sites selling legitimate merchandise, reinforcing our conclusion that shoppers were seeking bargains.
 
So what can you do to make sure your customers aren't lured by the counterfeiters' clutches? First and foremost, pay attention to search terms surrounding your brand.  Counterfeiters are linking your brand name with discount-related terms in search engine marketing to steer your customers to their sites. Whether you discount or not, don't lose a customer to a poor brand experience after they learn the product they purchased through a discount-related search is a fake.  Stay one step ahead of counterfeiters and buy search terms like 'discount', 'outlet' and 'bargain.'

Counterfeiters will also try to  lure bargain-hunters by registering domain names including a popular brand and a term like 'cheap', 'outlet' or 'discount' – brandoutlet.com or cheapbranddeals.com.  Pre-empt the counterfeiters and don't let them benefit from this practice, known as cybersquatting. Register domain names with these bargain-related terms yourself to ensure potential customers find your site when searching.

Scammers can easily impersonate a brand via social media channels, too.  In a digital twist on an age-old problem, counterfeiters promote e-commerce sites selling fake goods through spoofed social media accounts. By posting links on their fake profiles or fake pages featuring your brand's logo and legitimate product photos, they may mislead consumers into purchasing counterfeit wares.

The key is to prevent these imposters from fooling consumers into thinking they're engaging with your brand.  Establish accounts for your brand across all standard and emerging social media channels, using account verification whenever possible. Monitor social media channels for impersonation and misuse of branded terms on an ongoing basis.  Social media sites want to offer their users' positive brand experiences, just as you do, and the sites' Terms of Service usually provide guidelines on how to take action against counterfeiters.

Every time a shopper engaging with your brand online is intercepted by a counterfeiter, you risk losing revenue and customer loyalty.  With the increase in bargain-hunting web traffic, protect your brand and products from counterfeiters and stay ahead of their game.  

Frederick Felman is the chief marketing officer of MarkMonitor.
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