Excerpts from The Knockoff Economy: How Imitation Sparks Innovation by Kal Raustiala and Christopher Sprigman:
In a fascinating paper, legal scholar Jonathan Barnett explored the ways in which, in the fashion industry, brand owners benefited even when knockoff artists not only took their designs but also counterfeited their brands. Barnett argued that the presence of counterfeits may actually help brand owners by signaling to high-end consumers the desirability of the original item as part of an emerging fashion trend. Because the counterfeit copies are most often of lower quality, consumers usually can tell they’re not the real thing. At the same time, Barnett argues, their presence on the streets signals that the dress, handbag, or shoes they are aping are especially desirable. Counterfeits communicate the fact that even those who can’t afford to have the real thing still want it. That’s a free ad for the branded product.
Other studies support the power of copies as a form of advertising. A two-and-one-half year study by Renee Gosline of the Massachusetts Institute of Technology looked at people who purchase counterfeit luxury items, like handbags and sunglasses, and found that counterfeits do not hurt the sales of luxury brands so long as consumers can distinguish between them. Indeed, Gosline found that counterfeits are often used as “trial versions” of the high-end genuine branded item, with over 40% of counterfeit handbag consumers ultimately purchasing the real brand.
Gosline’s study suggests that fake luxury goods are a very effective form of advertising: people who buy them and live with them have a significant probability of being converted to the brand and buying the real thing once they can afford to do so. Copies, in short, are a kind of “gateway drug” that leads to consumption of the harder (or at least, more expensive) stuff. What’s more, every time consumers go out with their fake item, they’re publicly displaying the desirability of the brand, sparking trend-driven consumption that spills over—or up—to the original version.
In a fascinating paper, legal scholar Jonathan Barnett explored the ways in which, in the fashion industry, brand owners benefited even when knockoff artists not only took their designs but also counterfeited their brands. Barnett argued that the presence of counterfeits may actually help brand owners by signaling to high-end consumers the desirability of the original item as part of an emerging fashion trend. Because the counterfeit copies are most often of lower quality, consumers usually can tell they’re not the real thing. At the same time, Barnett argues, their presence on the streets signals that the dress, handbag, or shoes they are aping are especially desirable. Counterfeits communicate the fact that even those who can’t afford to have the real thing still want it. That’s a free ad for the branded product.
Other studies support the power of copies as a form of advertising. A two-and-one-half year study by Renee Gosline of the Massachusetts Institute of Technology looked at people who purchase counterfeit luxury items, like handbags and sunglasses, and found that counterfeits do not hurt the sales of luxury brands so long as consumers can distinguish between them. Indeed, Gosline found that counterfeits are often used as “trial versions” of the high-end genuine branded item, with over 40% of counterfeit handbag consumers ultimately purchasing the real brand.
Gosline’s study suggests that fake luxury goods are a very effective form of advertising: people who buy them and live with them have a significant probability of being converted to the brand and buying the real thing once they can afford to do so. Copies, in short, are a kind of “gateway drug” that leads to consumption of the harder (or at least, more expensive) stuff. What’s more, every time consumers go out with their fake item, they’re publicly displaying the desirability of the brand, sparking trend-driven consumption that spills over—or up—to the original version.
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