The exponential increase in retail channels and opportunities has given new rise to the marketing of counterfeit products, and global research from the International Trademark Association (INTA) takes a deep dive into the behavior of Gen Z—the largest group of consumers worldwide by 2020—when it comes to their relationships with brands and attitudes toward counterfeit products. The study uniquely explores, through a moral vs. practical lens, what drives Gen Z’s decisions to purchase real or counterfeit goods—and offers brand owners a roadmap to communicating with these 18-to-23-year-olds.
Among the major findings of the group’s new study, Gen Z Insights: Brands and Counterfeit Products, the top two factors influencing opinions about fake products are morals and income. While 48 percent of respondents “don’t think it’s okay or it’s totally not okay” to purchase fakes, income beat out morals by 10 percent globally.
“Gen Zers often apply a lens of situational morality to their purchase decisions, and practical considerations can overtake moral ideals,” the study found.
But Gen Zers are struggling with this moral versus practical tension
“For me, buying fakes is ethically wrong, but the price of the originals are way too high,” summed up Diego, 21, of Argentina, one of the survey respondents.
The study found that 93 percent of Gen Zers have a strong respect for the value of people’s ideas and creations, and 74 percent think it’s important to buy genuine products.
Yet, 79 percent of Gen Zers surveyed bought counterfeit goods in the year prior to the study. Their income may be pushing them toward counterfeits: 57 percent said they can only afford the fake version of some brands, and three in five feel they cannot afford the lifestyle they want. In three countries, China, Italy, and Japan, morals outpaced income, however.
The study of the Gen Z psyche is set against two powerful global backdrops
The first is the emergence of Gen Z as the largest demographic group, making it critical for brand owners to understand them. The second is the proliferation of counterfeiting, with the international trade in counterfeit and pirated products, including digital piracy, estimated to skyrocket to as high as $2.81 trillion by 2020, according to a study published in 2017 by INTA and the International Chamber of Commerce-BASCAP.
The study findings identified three major characteristics and attitudes of Gen Z toward brands and counterfeit products: individuality, morality, and flexibility
Among this demographic, 92 percent say it is important to always be true to who they are; 89 percent determine their own moral code; 81 percent feel the brand name is not as important as how the product fits their needs; and 85 percent believe brands should aim to do good in the world. In addition, 85 percent have at least some knowledge of IP; individuals in China, India, Japan, and Russia rank the highest.
Also driving purchasing decisions, 58 percent of respondents cite easier access to fake goods than genuine products. Among sectors, apparel, and shoes and accessories lead the most commonly purchased counterfeits.
Positively, 91 percent of Gen Zers expressed openness to change their views based on new things they learn.
“The door is open to change the mindset and buying habits of this significant group of consumers. The Gen Z Insights study alerts brand owners that they need to pay attention and adapt marketing strategies,” said INTA president David Lossignol, head of trademarks, domain names and copyrights at Novartis Pharma AG in Switzerland, in a news release.
“It’s incumbent on all of us to jump on that opportunity through education. We need to drive home the message that not only are counterfeit products dangerous, they are also socially unacceptable,” he emphasized.
In response to the findings, and as part of its call for more extensive education, INTA announced that it is expanding the reach of its Unreal Campaign—which informs young consumers worldwide about the value of trademarks and brands and the dangers of counterfeit products—from 14 to 18 year olds, to 23 year olds. The campaign includes educational presentations at schools—in 38 countries so far—and social media messaging.
In the future, the pendulum may swing toward genuine goods
Despite the high percentage of counterfeits currently purchased by Gen Zers, the findings indicate 81 percent of respondents recognize fake goods as unsafe, and 77 percent cite the quality of counterfeit products as usually not good enough. Other drivers away from counterfeits include proceeds supporting organized crime, and an adverse impact on the environment.
According to the study, in the next few years, 52 percent expect to purchase fewer counterfeits. Prompting this is their desire for better quality things (66 percent), their ability to afford the genuine product (37 percent), and their recognition that buying real goods is “the mature thing to do” (34 percent).
“The fact that Gen Zers see their identity as a ‘work-in-progress’ is a good thing in the fight against counterfeiting,” Lossignol said. “As Gen Zers get older, maturity, affordability, a desire for quality, and a greater awareness of counterfeits’ adverse impact on society may kick in and put a different spin on their purchasing behavior.”
INTA commissioned Insight Strategy Group, LLC, a market research firm based in New York, to conduct the study. The research consisted of qualitative virtual discussions with 30 Gen Zers from four countries in August and September of 2018, followed in November 2018 by a quantitative online survey of 4,500+ Gen Zers from 10 countries: Argentina, China, India, Indonesia, Italy, Japan, Mexico, Nigeria, Russia, and the United States. Multiple factors went into selecting these countries, including the Gen Z population, prevalence of counterfeit goods, and level of economic development.