Debating Authenticity, Maturity, Fakes & the Future

An analysis of the week’s luxury news highlights

Passing Judgement

With ever more sophisticated technology as an enabler, the cat and mouse game between counterfeiters and luxury conglomerates has become increasingly complex over a very short span of time. In the last couple of years, the battle lines have been drawn mostly across the internet – and often with murky legal results. A case back in March which saw Google ‘mostly win’ in a ruling over LVMH was initially applauded because a European Union court upheld Google’s right to sell trademark-protected brand names like Louis Vuitton as searchable keywords to third-party advertisers (some allegedly selling fakes).

But now that the law is about to come into effect, media outlets like Bloomberg are revisiting the case. To get a better sense of the potential loopholes and grey areas left in the legislation, however, it’s worth reading a piece written by an IP lawyer for The Scotsman who has explored the case deeper to see how far brands might be able to control discounting, sales channels and much more in the years to come. The landmark trial may have been over months ago but the real test is only about to begin.

The Cost of Authenticity

One of the cornerstones upon which the luxury industry is built – and indeed the whole notion of intellectual property – is authenticity. Although this topic may well have already been ‘done to death’ by market researchers and brand strategists alike, a fresh perspective is always welcome. Authenticity is, after all, what our customers intuitively crave and what our businesses claim to understand better than most.

So when Wired recently asked, “how much is authenticity worth?,” it piqued our curiosity not only because of the unorthodox presentation but also because it was coming from a valuable outsider perspective. The crux of the tech magazine’s conclusion is based on an experiment with children and their toys devised by two distinguished psychologists, Bruce Hood and Paul Bloom. It appears that at an exceptionally early age, the human psyche is prepared to place value on perceived authenticity over copies that are practically-speaking ‘just as good’. One wonders if the world’s leading luxury federations and groups wouldn’t be wise to band together to invest more in a scientific understanding of such deeply rooted attitudes. It’s certainly in everyone’s interest.

Mature Wisdom

They may be like two ageing athletes running out of breath but, by most reliable accounts, Japan and the USA remain at least a few paces ahead of any other market in terms of consumption. Lest luxury spectators get blinded by the speed and agility of China sprinting close at their heels, valiant efforts like those of the Wall Street Journal’s Robert Frank and WWD’s Amanda Kaiser are keeping us updated on these all-important mature markets.

For a global picture on how the experts are redefining old buzzwords like masstige, aspirational, democratic and affordable luxury in the post-crisis economy, peruse WWD’s diverse collection of insider quotes and insightful analysis written by Miles Socha. Despite all the talk about an extreme price polarisation of the luxury market, no one can afford to neglect the many millions still prepared to part with their cash somewhere closer to the middle ground.

Revenue Report Card

Following our report last week on H1 profits at LVMH, it was generally a week of more good news from several other sources following the financial statements of bellwether firms. Net profit at PPR for the same period grew 113.3% to €403 million ($528 million), according to AFP. Prada’s revenues went up 29%; Swatch posted a 55% jump in profits; and Bulgari forecast better times ahead after buoyant H1 results. In the auto sector, Reuters tracked the soaring profits of BMW but falling revenues at Lamborghini.