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With counterfeit products showing up on U.S. luxury retailer shop floors, security and tracking are a growing concern for brands and retailers alike. The solution, according to some, is to equip products with RFID tags, NFC tags or digital twins, from the start.
Last week, several retailers were called out on social media for selling counterfeit products on their floors. On August 22 via Twitter, user @xogabbyelle, real name Gabby, who runs the luxury live sales Instagram account XOshopper, posted a viral thread stating that counterfeit designer items are reaching luxury retailers’ floors and e-commerce sites, most likely as a result of shoppers buying the real deal and returning fakes in their place.
Gabby posted two examples from TikTok. In one video, she claimed she purchased a bag from Bloomingdales.com with the usual logo from the inside pocket, and assumed it was fake. The video has since been deleted. The second video, by TikTok user @thisischreylk, showed seemingly counterfeit YSL pumps on display at a Neiman Marcus store in Beverly Hills. The retailer did not respond to Glossy’s requests for comment. With authentication becoming a larger part of retailer and brand responsibility, the fashion industry has more to learn from the focus on digital IDs, as well as physical tags, from web3 brands like Gmoney.
“That’s a nightmare scenario for any luxury brand, for [fakes] to show up on the shop floor,” said luxury and metaverse expert Cathy Hackl. “Luxury has been looking at RFID for a very long time for tracking provenance. Now, you’ve got it on the blockchain. That’s another level of security and provenance, especially if there’s resale value or if you’re verifying it’s a real item.” Hackl said that brands are also considering that the commercial model for luxury brands could change if items with digital IDs become more valuable because they are harder to fake.
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Web3 brands like Gmoney focus is validation of cultural capital, too. For the brand’s first collection ITERATION-01, all items have NFC patches that can be scanned to access the NFT that determines the provenance of the garment.
Speaking to Glossy, anonymous NFT influencer and brand owner Gmoney said, “With the ease of replication of digital images, music, and software, it’s been so important to have a solution to combat digital counterfeits. Blockchain technology allows for timestamped, validated, on-chain proof that a digital asset is created by who it says it is by and shows transactional proof. Culture has everything to do with who-what-when, and digitally native brands can prove these elements with on-chain data.”
According to a designer speaking off the record, retailers are now requiring brands to add RFID to their products, which is causing friction with brands that would rather not flip the bill. That begs the question of whether store associates are currently trained to make use of RFIDs. Bloomingdale’s declined to comment on this story, while Nordstrom did not reply to a comment request.
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Digital IDs are still in their infancy. The members of the Sustainable Markets Initiative Fashion Taskforce, which include digital ID provider Eon, Prada, Burberry, U.K. retailer Selfridges and resale site Vestiaire Collective, have been focusing since last October on how digital IDs can keep brands aware of what happens to their products after they are sold, as a sustainability measure. Brands like UK leather goods company Mulberry and German retailer Zalando were the first brands to add the tags earlier this year.
Digital IDs and NFT tokens can help brands avoid counterfeits reaching their shop floors. Talking about the tags, Sebastian Orellano, founder of POAP.fr, which worked with Selfridges and Sotheby’s on proof of attendance protocols, said that tokens offer three benefits to users and brands. “They represent ownership, give transparency on the fabrication process and avoid counterfeits. As the token is unique and specifically minted from a specific smart contract, all a brand has to do is read on the blockchain where the NFT came from, validating immediately that the product is not fake,” said Orellano. “Brands could also connect your NFT wallet to their website once you mint this NFT, to tell you if the item is real or not.”
Most luxury and high street fashion brands are already in the process of incorporating near-field communication (NFC) or radio frequency identification (RFID) to their products, to rule out counterfeits in their value chain. Mango, Hugo Boss, Adidas, Nike, Ralph Lauren and AZ Factory, among others, have all rolled out the tech. Prada has worked in partnership with LVMH’s blockchain consultancy the Aura Blockchain Consortium since last year, adding RFID and NFC tags to all of its products. Brands like Target have also used RFID tags, in big partnerships with Avery Dennison, as far back as 2017.
