5 Surprising Stats on Why Retail Brand Trust is Seriously at Risk
Ready for a shocking stat? Counterfeit consumer goods now total at a global value of $1.77 trillion a year. Understandably, these knock offs are creating some significant trust issues between retailers and their consumers, and, retailers and manufacturers.
Ready for some more numbers? This fraud is running rampant in American retail and hurting merchants’ abilities to create a consistent, consumer-driven assortment.
Here are five staggering stats about the imitation game that is costing luxury brand names business and causing shoppers to question product authenticity:
1. What’s really in the mix?
Almost 70% of extra virgin olive oil in the United States isn’t pure. It’s cut with cheaper oils, falling prey to hi-tech, industry-wide fraud. As a result, profit margins for these criminal producers can be 3x that of illegal drug profits like cocaine.
2. What beats the real thing?
Beats headphones sales of $3 billion annually are dwarfed by a group of Chinese companies selling inferior counterfeit versions with the iconic ‘b’ logo for $135 billion annually.
3. Something fishy?
The mislabeling of popular fish species is out of control, charging unknowing consumers a premium for salmon (28% mislabeled), red snapper (67% mislabeled), and lemon sole (nearly 88% mislabeled). In fact, more than one in every four seafood purchases were found to be mislabeled.
4. What’s kicking luxury shoe sales?
In August of 2018, it was reported that one singular counterfeit Chinese sneaker seller netted $100,000 a month selling online from Putian, China – the “fake sneaker” capital of the world.
5. Maybe convenience isn’t everything.
The rise of mega-marketplaces like Amazon, eBay, and Alibaba has created a convenient channel for counterfeit companies to distribute goods with less oversight.
The Counterfeit Group, an advocacy group that detects fake goods, has found more than 58,000 counterfeit products on Amazon since May 2016. The total count is likely much more as these are only brands the group represents.
Trust goes a long way.
In PwC’s Global Consumer Insights survey, it was reported that brand trust was among the top reasons that influence consumers’ decisions to choose a retailer.
But where are these consumers getting their information?
Not the retailer, not the brand, but social networks. Only 36% of shoppers trust companies to do what’s right according to a Boston Consulting Group study. They would rather take their peer’s word for it than the producer themselves.
There’s nothing like the real thing.
How can consumers make sure their high-end handbag purchase is truly authentic? How can someone allergic to sunflower oil safely know ‘olive oil’ won’t give them a life-threatening reaction? The answer today is, they just can’t.
But there’s good news – innovation is emerging today that will create a revolution as powerful as the internet for years to come. Enter a new technology known as blockchain.
Blockchain will reinforce consumer trust so dramatically that it is being compared to the impact the invention of the internet had on worldwide communication. Think about that for a second.
In my next blog, I’ll get into what retailers need to know about blockchain moving into the future.
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