Mark Monitor Shopping Report

7/30/2019 Mark Monitor Shopping Report

1/12

MarkMonitor

Shopping ReportFall 2012


2/12

Contents

Executive Summary .................................................................................... 3

Key Findings ............................................................................................... 4

Recommendations or Brands .................................................................... 10

Summary .................................................................................................... 11

Methodology & Background ....................................................................... 11

Appendix A ................................................................................................ 12

Fall 2012

MarkMonitor Shopping Report


3/12

3

MarkMonitor Shopping Repor

Executive Summary

High-prole seizures o countereit goods and shutdowns o websites selling akesdemonstrate how the business o countereits has moved rom the street corner tothe digital world, providing countereiters with a market that is global, pervasive and

well-organized. E-commerce sites hawking ake product appear proessional, oteneaturing photography drawn rom brands most recent advertising campaigns, andpresent consumers with seemingly viable choices. Who is making the choice to buycountereit goods?

There is little inormation about consumer motivation when purchasing akes. Is thepurchase a deliberate, inormed purchase or an inadvertent one? This study providesimportant insight about the demographics o countereit purchasers and shedslight on consumer purchase intent, debunking the assumption that shoppers whopurchase countereit goods are a dierent category o customer than those seekinggenuine goods.

Our study, conducted between July 2011 and March 2012, analyzed the relationship

between online shoppers, the search terms they use and the sites that they visitwhen seeking apparel and luxury goods. We worked with Nielsen, a leading globalprovider o inormation and insights into what consumers watch and buy, duringthe study period to analyze anonymized data rom Nielsens permissioned onlinepanelists in six countries. Using trac and keyword search data, we scrutinizedtrac to sites visited by these shoppers, including more than 1,000 websites sellinglegitimate goods and more than 8,000 sites identied by MarkMonitor as sellingcountereit goods.

While we cant deny that some shoppers will purchase a countereit without com-punction, our study o these shoppers indicates that many consumers arent evenaware that they are buying a countereit product instead o the real deal. Based onour analysis o search terms, we ound that or every shopper searching or akegoods, 20 other shoppers were seeking bargainsand one in ve o those bargainhunters were duped by sites selling countereits. We also ound minimal demo-graphic dierences between shoppers who visit sites selling countereit goods andshoppers who stick to sites selling legitimate goods. The implications are importantor brands at all points on the price spectrum and underscore the need to implementproactive brand protection strategies in the digital world.


4/12

U.K. consumers

continue to spend

more online, mean-

ing theyre mov-

ing more of their

purchases from

stores to the web. In

June [2012], online

shoppers spent anestimated 6 billion

pounds ($9.3 bil-

lion)an average of

117 pounds ($181)

per personup 13

percent from June

2011.

U.K. Web Sales Grow Nearly

13 Percent in the First Half of

2012, Internet Retailer, July

27, 2012

4


Key Findings

Minimal Demographic Differences for Bargain Hunters

Its no secret that shoppers all over the world are embracing e-commerce. Eurostat

research reveals that 43 percent o individuals aged 16 to 74 in the 27 EU membercountries bought something via the Internet in 2011, with shoppers in Britain, Ger-many and France reporting much higher rates o online purchases at 71 percent, 64percent and 53 percent respectively. Clothing is a popular item with shoppers, as41 percent o British shoppers and 39 percent o German shoppers report buyingclothing online in 2011, almost double the European average o 22 percent. ForresterResearch reports the average U.S. shopper will spend $419 online this holiday sea-sona 12 percent boost rom last yearas they continue to go to the Web to takeadvantage o the increasing number o digital oerings rom retailers.1

Examining online search behavior yields insight into purchase intent. Shoppers maystart their search expeditions with broad category keywords and modiy with a va-riety o descriptors in order to narrow their search. For our study, we examined two

sets o descriptive keywords to athom intent. One set ocused on countereits withterms like ake, knocko, and replica while the other set ocused on bargainswith terms like cheap, discount, wholesale, clearance and outlet.

Nielsen data is based on permissioned panel participants, numbering more than300,000, including consumers in France, Germany, Italy, Spain, Switzerland, the U.K.and the U.S.

When we compared the shoppers who visited sites selling countereits with theshoppers who never visited sites selling countereits, we were surprised to learnthat rom a demographic perspective, very little separates visitors to sites sellingcountereit goods and visitors to sites selling legitimate goods. Across age, income,education levels, household size and other actors, the demographic di erences are

minor.

1 US Online Holiday Retail Forecast, 2012, Forrester Research, Inc., November 8, 2012


5/12

Shoppers visiting

sites selling counter-

feits and shoppers

who never stray

from sites selling

legitimate goods

are similar from a

demographic

perspective.

5


Demographic ProfleUnited States

July 2011March 2012


6/12

In 2012, Forrester

expects this holiday

season to gener-

ate $68.4 billion in

U.S. online sales, a

15 percent increase

on 2011s total and

three percentagepoints higher than

the expected overall

annual online retail

growth rate.

US Online Holiday Retail

Forecast, 2012, Forrester

Research, Inc., November 8,

2012

6


Demographic ProfleEurope

July 2011March 2012


7/12

The prices of the

imitators are rising,

confusing custom-

ers who are lookingfor the real deal at

a discounted price.

Still, the higher-

priced fakes are just

a fraction of what

a real item would

cost.

Fashion Fakes Get More

Sophisticated, The Wall StreetJournal, June 30, 2011

7


Price Conscious Shoppers Find Fakes While Looking for Bargains

We surveyed almost ve million shopping sessions during the study period and o-cused on the search terms employed to understand the motivation or these shop-pers. About one in ve U.S. and European bargain hunters (e.g., those searchingon terms such as cheap, discount, or outlet) land on sites selling counter eits andthey were more likely to convertin other words, put something in the shoppingcartthan those who land on a site selling legitimate merchandise.

Most countereit goods are priced to appear as legitimate goods on sale. Discountsare oten oered at 25 percent to 50 percent, which, while steep, are comparable toend-o-season or blowout sale rates. Because these prices are plausible, bargainhunters are that much more likely to snatch up countereit goods thinking theyrepurchasing legitimate goods.

The result is disappointed consumers who nd a ake rather than a deal whenthey receive their goods, resulting in increased customer complaints and decreasedcustomer loyalty.

Bargain hunters are more likely to place an item in an online cart when shopping on sites

selling counterfeits.

Demographic ProfleEurope (cont.)

July 2011March 2012


8/12

8


Comparing Search Behavior

What sets apart those truly looking to purchase a countereit versus those seekinga good deal on legitimate goods? The search behavior o both categories o shop-pers reveals some interesting insights into how these two sets o shoppers search.

U.S. shoppers who seek out countereit goods use more specic brand names in

their searches than shoppers who seek deals. In other words, those looking orknockos are more likely to search on a brand name, while bargain hunters aremore likely to search or categories o goods, such askids, clothing, furniture, jack-ets and jeans.

Along those lines, U.S. bargain hunters do not search or as many high-end brandsas those seeking akes. This supports the conclusion that these consumers haveevery intention o making a legitimate purchase and simply assume certain brandsare beyond their budget. The research did uncover one exception: countereit huntersin both the U.S. and Europe are more likely to look or watches, both as a categoryand by brand name.

The study also revealed distinctions when it comes to European bargain hunters.

While seasonality did not impact their behavior, these consumers are more likelyto look or specic stores in their online searches. This implies theylike their U.S.counterpartsare well-meaning shoppers who are researching bargains onlinewith the intent o purchasing a legitimate product ofine.

There were two exceptions, however, that we noted. Italian and French online shop-pers are three to ve times more likely than Swiss and German online shoppers tovisit countereit sites.

Uniting all searchers, though, is a love o ootwear. Footwear-related termsinclud-

ing brand names and categories such as shoeswere the most popular or allshoppers, and some o the most popular search terms or bargain hunters. Whenyou consider that countereit ootwear accounted or 40 percent o the total knock-o goods seized by U.S. government agencies last year, accounting or industrylosses estimated at $12 billion2 according to the Coalition Against Countereitingand Piracy, the risk rom sites selling countereits stands in sharp relie or ootwearbrands.

2. The Most Counterfeited Products, Bloomberg Busines sWeek, 2012

Shoppers in France and Italy are more likely to visit sites selling counterfeit goods.


9/12

9


Deliberate Purchase Process

Lending urther support to the case or bargain hunting, we ound that shopperswho visited countereit sites were more deliberatethey visited more sites andspent more time on those sites. For example, during the 2011 holiday period, U.S.shoppers who went to countereit sites visited over 2.5 times more shopping sites

and spent more than twice the amount o time on them than shoppers who visitedonly legitimate sites.

The contrast is even sharper when looking at the ull nine-month period. U.S. shop-pers who visited countereit sites visited nearly our times as many shopping URLsand dedicated more than three times the amount o shopping time than shopperswho visited legitimate URLs only.

The ndings are similar in Europe. During the holiday period, shoppers who went tocountereit sites visited just over twice as many shopping sites and spent just overtwice the amount o time shopping than shoppers who only visited legitimate sites.During the ull study period, European shoppers who went to countereit sites vis-ited just over 2.5 times more countereit sites and expended about 2.5 times moretime shopping compared to shoppers visiting only legitimate sites.

Shoppers spend more time on sites selling counterfeits than on sites selling legitimate goods.


10/12

Brand website

visitors are heavier

buyers within a

brands product

category, spending

53 percent more

than non-visitors

on the category in

retail stores.

Engaging Consumer Brand

Sites Spark Purchases inStores, Internet Retailer,

January 30, 2012

10


This deliberate shopping behavior on the part o all panelists in the study along, withthe plausible discounts oered by sites selling countereits, bolsters our conclu-sion that sites selling countereits are honeypots, or lures, or bargain shoppers.Bargain hunters search behavior during the study period urther reinorces thatconclusion. During the entire nine month study period, bargain hunters consistently

used deal-oriented terms and did not use countereit-oriented terms. This behaviorsuggests strongly that these shoppers were seeking bargains and believed thatthey were shopping on sites selling legitimate goods.

Recommendations or Brands

The look and eel o sites selling countereits can ool even the savviest o shoppers,whether an aspirational consumer or a brand loyalist. Gone are the days o poorquality and rampant misspellingscountereiters now download artwork, includ-ing logos, product shots and the latest ad promotions, directly rom brand sites.Some o these sites selling akes look like elegant boutiques oering a range ohigh-end consumer brands and luxury goods, urther reinorcing a high-end im-

age. As e-commerce continues to growand when you consider that e-commercepurchasers are oten spending more both online and ofinethe risk to brandsbottom lines rom online countereiting is magnied.

Powerul brands are valuable assets that are particularly vulnerable to brandjackersin the digital world. An eective online brand protection strategy is critical to ensurethat brand integrity, marketing investments and customer trust are not being under-mined by unauthorized digital activities.

In addition to implementing a brand protection strategy, MarkMonitor recommendsthat brand marketing and e-commerce proessionals in all product categories,including luxury brands, take two simple steps:

Buy terms like discount, outletand other bargain-related terms, even i youare a luxury brand. Then, design associated landing pages to point brand-seekers to sale items or appropriate retailers. I your brand does not discountas a matter o policy, educate these shoppers on the brands philosophy.

Register domain names with these bargain-related terms to ensure potentialcustomers nd your site or your channel partners sites when searching.Do not let the countereiters and other brandjackers use domain nameslike brandoutletstore.com or discountbrand.com and steal away yourcustomers. Todays aspirational customer may be tomorrows loyal buyer.

Summary

While some consumers opt or a knocko when the original proves too expensive,others can be so intent on purchasing their brand o choice that they unknowinglyshop at sites selling countereits while seeking a bargain. We ound that or everyshopper searching or ake goods, 20 are seeking bargains. Furthermore, one in veo those bargain hunters were intercepted by sites selling countereit goods.

Based on Nielsens anonymized, permissioned panel data which includesconsumers rom the U.S. and six European countries, we compared demographicinormation or shoppers visiting sites selling countereit goods and sites sellinglegitimate goods. We ound minimal demographic dierences between those setso shoppers, across income, education, age, household size and other actors.


11/12

11


We also ound that shoppers visiting sites selling countereits were more deliberate,visiting more sites and spending more time on sites than those shoppers whoconcentrated on sites selling legitimate goods. This careul shopping behaviorurther illustrates how price-conscious customers are getting lured away by abargain oered by a countereiter instead o by a legitimate brand.

These ndings indicate that it is ill advised to classiy a certain set o shopper as anevil underclass. While many o those consumers may be aspirational shoppers whocannot aord the price o these brands today, they could very well represent uturebuyers. Companies that take steps to minimize the chances brandjackers comebetween their customers and their brands will likely see a return on their investmentor years to come.

Methodology and Background

Our study, conducted between July 2011 and March 2012, analyzed the relationshipbetween online shoppers, the search terms they use and the sites that they visit when

seeking apparel and luxury goods. Using Nielsens anonymized, permissioned paneldata and keyword searches, we scrutinized trac to sites visited by the panelists,including 1,000 websites selling legitimate goods and 8,000 sites identied byMarkMonitor as selling countereit goods.

The Shopping Report is produced by MarkMonitor using the companys proprietaryalgorithms and technology; none o this data contains proprietary customerinormation. Specically, MarkMonitor analyzed representative samples based onNielsen data or trac to countereit and brand sites and segmented accordingto keyword searches, including those based on the ollowing in English, Spanish,German, Italian and French:

Bargain-related terms, e.g., cheap, discount, outlet, etc.

Countereit-related terms, e.g.,knockoff, fake, replica, etc.


12/12

About MarkMonitor

MarkMonitor, the world leader in enterprise brand protection and a Thomson Reuters

Intellectual Property & Science business, uses a SaaS delivery model to provide advanced

technology and expertise that protects the revenues and reputations o the worlds leading

brands. In the digital world, brands ace new risks due to the webs anonymity, global reach

and shiting consumption patterns or digital content, goods and services. Customers choose

MarkMonitor or its unique combination o industry-leading expertise, advanced technology

and extensive industry relationships to preserve their marketing investments, revenues and

customer trust. Learn more at www.markmonitor.com.

About Thomson ReutersThomson Reuters is the worlds leading source o intelligent inormation or businesses and

proessionals. We combine industry expertise with innovative technology to deliver critical

inormation to leading decision makers in the nancial and risk, legal, tax and accounting,

intellectual property and science and media markets, powered by the worlds most trusted

news organization. With headquarters in New York and major operations in London and Eagan,

Minnesota, Thomson Reuters employs approximately 60,000 people and operates in over 100

countries. For more inormation, go to www.thomsonreuters.com.

More than hal theFortune 100 trustMarkMonitor to protect

their brands online.See what we can do for you.

MarkMonitor Inc.

U.S. (800 ) 745-9229

Europe: +44 (0) 203 206 2220www.markmonitor.com

2012 M kM it I All i ht d M kM it i i t d t d k M kM it I t th I t ll t l

San Francisco | Boise | Washington, D.C. | London

Mark Monitor Shopping Report

Documents

Transcript of Mark Monitor Shopping Report