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6 September 2018

Dear Burberry: Here's a better way to outsmart counterfeits

Burberry CEO Marco Gobbetti announced today that the UK luxury house would stop the widespread industry practice of destroying unsold products to prevent them from ending up in discount channels rife with counterfeits. 

"We think that modern luxury that doesn't take into account the social and environmental responsibility really has no meaning," Gobbetti told Business of Fashion editor Imran Amed in a wide-ranging interview.

"Our business is about creativity," he continued. "You can be creative in a way that you structure and you change your business model. We know it's doable because we have already been working on it and are well on our way."

It's an exciting development for social and environmental responsibility in the fashion industry, where there is a pressing need to reduce sources of unnecessary waste.  

Counterfeits undermine brands investing in leaner, cleaner supply chains by flooding online markets and discount platforms with replica products that pretend to be overstocks or last-season deals. The avalanche of extra waste has the pernicious side-effect of undermining brand reputation and pricing power for authentic items, in part because consumers have no reliable way to distinguish authentic items from the fakes.

Click here to learn how counterfeits undermine sustainable brands.

In Burberry's case, Gobbetti said the decision to stop destroying unsold goods was a natural extension of a new "responsibility agenda". By rightsizing production, embracing limited editions over comprehensive seasonal collections, and bringing more precision to where products are sold, Burberry expects to reduce the number of excess products it manufactures in the first place. 

And for the rest?

Where the goal is protecting consumers and brand value from deceptive sellers plying discount channels to peddle counterfeits as authentic products, we'd point Burberry to the example of Armani Group. 

The Italian luxury house took to Twitter this week to announce it would banish the guesswork for consumers shopping Armani by enhancing its products with a complimentary digital authentication service.

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From this season forward, consumers shopping Armani brands Armani Exchange, Emporio Armani, EA7 can verify a product's authenticity with a complimentary QR Code scan, or by typing 12 digits in a web portal at certilogo.com. An artificial intelligence interface weeds out replicas and reports back in seconds if the item is authentic or fake. 

Click here for more leading brands with Certilogo authentication.

Consumers with access to a clear, reliable proof of authenticity are no longer vulnerable to deceptive approaches from counterfeiters, regardless of where they shop.

This is especially important for brands, like Burberry, looking to reduce their environmental impact — and raise their pricing power — by adopting the streetwear model of releasing new products in limited-edition batches, or "drops" outside the standard fashion calendar.

Brand lovers and collectors who lose out on initial releases are turning to eBay, Grailed, Depop and similar platforms for fashion resales, driving hype and higher prices in a cycle that, when it works, builds brand equity over time. It's a sad irony for brand protection professionals — and for anyone invested in a cleaner, greener fashion supply chain — that these are precisely the channels where counterfeiters are most likely to strike.

Click here to view a recording of our webinar: 3 Lessons for Luxury Brands Chasing Streetwear Hype in Secondary Markets. 

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