How Should Luxury Brands Fight against Counterfeiting?

How Should Luxury Brands Fight against Counterfeiting

Sick of breaking the bank with no guarantee of getting a real luxury item? Technology is here to the rescue.

Imagine that you bought an iconic Louis Vuitton (LV) monogram purse from an agent online. To ensure authenticity, you brought the bag to one of the LV flagship stores; but unfortunately, you were told that the bag was counterfeit. For a lot of luxury buyers out there, this is a very real concern every single time they make a purchase.

According to Entrupy, an AI-based luxury goods authentication company, Louis Vuitton was the most counterfeited luxury brand in 2018, followed by Gucci and Chanel. Technology advancement allows counterfeiters to produce high-quality knock-offs that can hardly be differentiated from the real deal. Ironically, the solution to this counterfeit problem also lies in technology. Let’s find out how tech can help authenticate products.

AI authentication

If you want to authenticate your newly-bought luxury products remotely or there is no flagship store in your neighborhood, the AI authentication system established by Entrupy may be what you need. The company invented and released an AI-backed scanning authentication device that allows users to authenticate their luxury bags by themselves simply by taking and uploading several photos to its database.

Before customers begin taking pictures of their bags, they need to provide basic item information, such as the brand and material. Then, Entrupy’s mobile app guides them on how to capture different regions of the bag, including the outer material, inner fabric, leather logo and hardware logo. When these images are successfully uploaded to the database, the system will classify the products as authentic, unidentified or under review with over 99% accuracy. Users can retrieve a certificate of authenticity once the authentication process is completed.

With the use of AI and extensive databases, customers are protected to a large extent and prevented from using counterfeit luxury goods. Although the emergence of AI-powered authentication devices may be bad news for those who work to authenticate luxury products, it does create a win-win situation where buyers can be saved from purchasing fake products and luxury brands can beat counterfeiting.

Blockchain

If you are active users of Bitcoins or other cryptocurrencies, you should be familiar with blockchain technology, a distributed digital ledger that stores data of any kind, including cryptocurrency transactions. Apart from recording information about transactions, blockchain technology can also be used to tackle counterfeiting.

LVMH Moët Hennessy Louis Vuitton (LVMH), the world’s leading luxury goods conglomerate, formed the first global luxury blockchain consortium with Prada Group, Cartier, part of Richemont, the OTB group and Mercedes-Benz in April 2021 and launched the AURA blockchain platform.“Blockchain is really a key technology for the future to enhance customer service, relationships with partners [and] traceability. Many, many things can be improved thanks to this innovative technology,” said Cyrille Vigneron, the President and CRO of Cartier International and Member of Richemont’s Board and Senior Executive Committee.

AURA’s blockchain system fights against counterfeiting by creating a unique digital ID for each product (similar to a serial number) for traceability and issues authenticity certificates to customers to ensure genuineness. It keeps a record of every time the item changes hands in the item’s certificate. Besides AURA, there are other blockchain-based service providers that create digital passports that contain immutable records of each luxury product on the blockchain, such as IBM’s non-fungible token (NFT) platform Arianee and blockchain platform FibreTrace. Similarly, the celebrated multinational diamond corporation, De Beers, also launched the world’s first distributed blockchain-based diamond source platform known as Tracr back in 2018.

“Tracr™ provides tamper-proof source assurance at scale, enabling our ‘Sightholder’ rough diamond customers to provide an immutable record of a diamond’s provenance, and empowering jewellery retailers to have confidence in the origin of the diamonds they purchase,” stated De Beers on their website.

By deploying blockchain technology, De Beers can keep track of the source of the diamond. The data encrypted by Tracr can only be accessed by designated retailers, which guarantees the authenticity of the diamond and prevents counterfeiting.

QR code

Besides AI and blockchain, quick response code (QR code) also helps fight against luxury brand counterfeiting. With online QR code generators, everyone can generate QR codes simply by inputting the URL (short for Uniform Resource Locator, which is a link that directs users to a webpage when they scan the code). The simplicity of QR codes makes it an ideal option for luxury brand authentication.

The Italian luxury fashion house Valentino has teamed up with OpSec Security, a brand protection agency, since August 2015 for brand protection. QR codes are embedded in the tags inside Valentino’s shirts for authentication. Although it’s possible for counterfeiters to clone the genuine QR code and print it on a counterfeit bag’s label, counterfeiters cannot include all the information that traces the product back to the retail store. Plus, if a brand adopts secure QR codes (ones that contain a copy-resistant image storing key information), the scanning app will identify a code as fake when it is reproduced (photocopied and printed). It is because the QR code will lose the key security information of the item, such as the proof of origin, to prove its authenticity.

With the wide range of options of QR code scanners available on mobile app stores, people can scan the QR code embedded in the luxury products easily and authenticate the item by themselves. The delicate structural design of QR codes makes them free from counterfeiters’ malicious hands and hence helps to combat counterfeiting.

These are some technologies that luxury brands can use (or are currently using) to fight against counterfeiting. Still worrying about accidentally buying another counterfeit Louis Vuitton purse? Just buy your next one from reliable sources, and technology will take care of the rest.

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Header image courtesy of Unsplash

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