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Is fake the new real? Living in a fake society – US

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A 2019 Incopro Market Research eBook

Fake goods, fake news, fake social media accounts. We are living in an era where the onus is on individuals to understand what is fake and what is real.

Can we tell the difference? Have we lost trust in everything we see online – or are we becoming savvier? Do we understand the impact of fake goods and fake news on the wider society? And, if so, is that changing our behavior?

Recent research undertaken for Incopro by Sapio Research across the US assessed the impact of today’s fake society, revealing how it has affected our trust as individuals, how we are influenced online, and whether we know – or care – that we are being tricked.

 

Key findings

26% of US consumers have been fooled into buying at least one counterfeit product in the past 12 months

When asked which fakes pose the biggest threat to society online 34% said fake pharmaceuticals

32% of US consumers believe online marketplaces should be doing more to stop the purchase of counterfeit goods

One in two US consumers (52%) have lost trust in a brand after unintentionally purchasing counterfeit products online

Fake Goods are Endemic

As marketplaces continue to be flooded with cheap and potentially dangerous counterfeit goods, both consumers and brands need to raise their awareness of these products flooding the market.

When over a quarter (26%) of people have been conned into buying fake goods over the past 12 months, the potential cost to both consumers and brands cannot be ignored. According to the 2019 Incopro/Sapio Research survey findings, scamming is endemic. From social media to online marketplaces, consumers are paying the price.

Have you ever received a refund after reporting a seller of counterfeit goods to the online marketplace?

 

Counterfeits Damage Brands

52% of consumers surveyed confirm unknowingly buying counterfeits will result in a loss of trust with that brand

For brands, this level of counterfeiting is a real concern: not only has a genuine sale been lost each time a consumer unknowingly buys a fake branded item, but 52% of consumers surveyed confirm the experience will result in a loss of trust with that brand.

Another very real issue for brands is that in addition to those who have fallen victim to counterfeiters, in the past 12 months alone, over a fifth (22%) of respondents knowingly purchased a counterfeit item.

Indeed, as fakes become more endemic, consumer behavior appears to be changing, with almost a third (32%) of consumers considering buying fake clothing, fake jewelry and fake leather goods as acceptable.

Who do you Trust?

The loss of trust is not limited to the brands – almost two thirds (64%) will lose trust in a marketplace after buying fake goods, more than half (51%) in search engines.

Yet consumer attitudes to and expectations of trust appears to be a fast-changing concept. While it is still important for consumers that brands provide a true representation of themselves, a quarter (25%) don’t think it is important that online influencers/ celebrities provide a representation. Interestingly this drops to 17% in the 18-24 age group, reflecting the demographic more likely to be influenced by celebrity culture.

While most consumers (61%) said they would not be willing to engage in fake behaviors to impress their friends online, 8% confirmed they have bought fake designer brands in order to look good and 5% have knowingly lied to promote a product or brand. This intentional misrepresentation has a hugely damaging impact and further underlines the challenges facing brands in retaining control over consumer perception

Where is the Risk?

When the phrase ‘fake news’ is used daily, it is interesting to discover what consumers are more concerned about. Fake news is, of course, a huge concern for society today, but looking at the results, only 20% cite fake news as the biggest threat to society – far behind fake pharmaceuticals (34%).

However, there are several dangerous fake goods that consumers appear to have overlooked. Just 6% cite fake cosmetics as a big threat – yet cosmetics and pharmaceutical products made up 6.5% of all counterfeit good seizures in the U.S. in 2017, estimated to be worth $69 million. Seized goods have been found to contain toxic materials such as cyanide, arsenic, lead, mercury and, in some cases, even rat excrement. These harmful ingredients will cause skin irritation, rash or infection, and many are linked to a higher risk of cancer.

More than a quarter of people who bought a counterfeit (27%) never received a refund from an online marketplace despite reporting a seller of counterfeit goods

Learn about online marketplaces

Marketplaces need to step up

People are trying to protect themselves from fake goods, fake news, fake society. But in turning to ‘trusted’ marketplaces to avoid fake goods (45%), and relying on customer reviews (45%), they are being let down. There is a huge industry dedicated to churning out fake customer reviews and marketplaces have well-documented challenges with fake goods. In February 2019, Amazon admitted for the first time to its shareholders that it had a counterfeit problem on the platform, stating that it “also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods”.

What you'll learn in this report

  1. The impact of counterfeit goods on brand reputation and consumer trust
  2. Consumer habits in researching information and purchasing products online
  3. Which parties consumers feel should e responsible for fighting against counterfeit goods
  4. Thre reasons behind purchasing counterfeit goods, both intentional and unintentional