A recent working paper, “Rethinking Brand Contamination,” by MIT business professor Renee Richardson Gosline observes the consumption of counterfeit vs. luxury goods and sheds new light on consumer motives.  Her discoveries are intriguing. 

First, Gosline notes that consumers are much more confident in their ability to judge real from counterfeit if they see the item in context, e.g., if they see a handbag being carried by a woman vs. seeing it on the shelf.  Now, she doesn’t imply that consumers are truly any better at judging the difference, just that consumers will look at the “whole package” and pass judgment on whether a person looks like they would be carrying real or faux luxury.  I suppose this is good news for people like me, because I can infer that my beloved Balenciaga is safe from thieving hands when I pair it with my Birkenstocks.  (I’m thinking of marketing my look; I call it “frumpy fab.”)

What is most interesting, however, are Gosline’s conclusions about purchase motives.  In another working paper, “The Real Value of Fakes,” Gosline used interviews from hundreds of consumers who had knowingly purchased counterfeit goods (at purse parties, etc).  Within two years, a full 46 percent of those consumers had purchased the authentic version of the same product, even if they couldn’t tell the difference. 

Why is this so significant?  First, it explains why design houses seem to be looking the other way when it comes to counterfeit goods selling all over the internet and in your neighborhood malls.  There is clearly a benefit to the label if a shopper will spend as much as 10 times the fake price to purchase the exact same bag again.  46 percent is one heck of a conversion rate.  And why do we do it if we can’t tell the difference?  It’s the snob factor.  It’s evidently not enough to look the part, we don’t feel the power or status of luxury goods unless we actually spend the money.  We don’t get the high unless it’s the real thing.  I guess our conscience knows we’re only faking ourselves out with counterfeits. 

And I’ve been there.  Before I knew how counterfeits were made, and what counterfeits funded, I didn’t see the harm in owning them.  I quickly learned that the cost to society is too great to ever again purchase a fake.  Unfortunately, salespeople hardly ever give me a second glance when I walk into the boutique.  It’s a shame, because I only ever buy the real thing–and only from attentive, polite salespeople.  Because of the way I dress, I’ve learned to stop making snap judgments about whether or not a woman is carrying a real or fake bag.  I’ve seen some very well turned-out ladies carrying very poorly made counterfeits.  I’m not sure who they thought they were fooling.  One fake ruins a whole outfit.

Me?  I’m sticking with “frumpy fab.”