One in six online bargain hunters duped by sites selling counterfeit goods, MarkMonitor study finds

MarkMonitor, a leader in enterprise brand protection and a part of the IP and science business of Thomson Reuters, released its latest Shopping Report that examines consumer purchase intent and the demographics of those who acquire counterfeit goods online. Focusing on the digital world of apparel and luxury goods, this study builds upon the initial MarkMonitor Shopping Report that analysed e-commerce sites and counterfeit goods.

MarkMonitor worked with Nielsen, a leading global provider of information and insights into what consumers watch and buy, to analyse anonymised privacy-protected data from more than 285,000 of Nielsen’s permissioned online panellists in the United States and five European countries in an eight-month period. Nearly nine million shopping sessions for fashion and footwear were surveyed using proprietary MarkMonitor technology during the study period to determine whether shoppers visited sites selling legitimate goods or sites selling counterfeit goods, known as rogue sites. MarkMonitor also studied shopper’s motivation, using search terms as guides. By classifying terms like ‘cheap’, ‘discount’ or ‘outlet’ as bargain-seeking and terms like ‘counterfeit’, ‘fake’ or ‘replica’ as fake-seeking, the team examined the aggregated traffic for shoppers to gauge their interest in shopping for legitimate or fake goods.

The latest study found that the number of bargain-hunters has grown with a ratio of 28 deal-seekers to every one fake-seeker in the US and Europe. This is a substantial increase from the earlier study which found a ratio of 20 deal-seekers to every one seeker of fakes, with the increase most likely fuelled by a combination of factors, including economic conditions and the internet’s reputation as a great source for deals. While consumer’s bargain hunting in digital channels continues, the panellists in the current study appeared to be less likely to stumble upon a rogue site, with a ratio of one in 10 bargain-hunters visiting a rogue site versus a one in five ratio in the earlier study. However, the new study found that once a bargain hunter does encounter a rogue site when seeking a bargain, they are just as likely as shoppers in the earlier study to be duped by the perceived ‘quality’ of the rogue site with one in six online bargain hunters displaying an intent to purchase.

“Savvy shoppers are continuously looking online for deals and are falling victim to counterfeiters who have camouflaged themselves as legitimate purveyors of desirable goods, changing the rules of the game in brand protection,” said Fredrick Felman, chief marketing officer of MarkMonitor. “The findings from our Shopping Report stress the importance for brands of developing proactive strategies to safeguard their brands so customer trust is not undermined by illicit digital activities.”

Additionally, the MarkMonitor Shopping Report examined shopper demographics, including age, gender, income, education levels, and household size. In both the United States and Europe, the largest segment of rogue site shoppers were in the 31-50 age range (40% in US and 43% in Europe), followed closely by millennials in the 18-30 age range (30% in US and 25% in Europe). In addition, MarkMonitor found that females comprised the largest percentage of rogue site shoppers at 56% in the US and 53% in Europe. Another area of similarity between European and American rogue site shoppers occurred when examining the presence of children in the household, as 56% of the rogue site shoppers in the US did not have children present in the household while 61% of European rogue site shoppers did not have children present.

“In today’s digital world, rogue sites can fool even the most experienced shoppers, whether an aspirational consumer or a brand loyalist,” said Felman. “Brands that take steps to ensure that brandjackers do not come between them and the consumer realise a positive return on investment across all channels.”

With the holiday season right around the corner, consumers must be vigilant when shopping online. Many counterfeit goods are priced to appear as legitimate goods on sale, often discounted at 25–50% off the legitimate list prices, which is comparable to end-of-season or ‘blowout’ sale prices. These plausible prices allow bargain hunters to feel they are getting a good deal on legitimate merchandise, especially when coupled with the increasing tendency for rogue sites to feature brands’ recent marketing campaigns and photographs.