As a customer you might go onto a website — let’s say Saks. You might buy a Prada bag thinking it’s coming from the Saks warehouse, but that might not be true.
Luxury supply chain consultant and Uncovered Agency co-founder Ona Simpson
Ona Simpson, a luxury supply chain consultant and the co-founder of Uncovered Agency, whose clients have included Burberry and Vivienne Westwood, asserts that big retailers are well equipped to handle returns, but the issue may be with the suppliers.
While the luxury industry has traditionally operated a wholesale model (high-end stores typically purchase and hold inventory from brands), a growing number of retailers, including Net-a-Porter and Nordstrom, have turned to e-concessions or drop-shipping, because it enables them to source high-end products while avoiding less upfront investment.
The danger is that stores have less oversight over where the product has come from, said Simpson. “As a customer you might go onto a website — let’s say Saks. You might buy a Prada bag thinking it’s coming from the Saks warehouse, but that might not be true.”
As to why a store might resort to such means, Simpson pointed to the exclusive nature of luxury goods, where scarcity is typically associated with desirability and value. Increasingly, to control their image and brand integrity, luxury brands have been limiting which distributors or stores can sell their products, as they instead prioritize direct retail channels (such as their own stores or e-commerce site). For example, Chanel notoriously does not sell its fashion and handbag collections online (those items can only be purchased in the brand’s physical boutiques).
That can make it difficult for retailers to keep up and cater to trendy customers who want the latest launch or the buzziest brand of the moment. “A lot of high-end retailers now (stock) products from independent boutiques and suppliers because they have found this to be a way to (sell) brands they want,” said Simpson. However, that puts the retailers at risk of receiving counterfeit products without realizing, she noted. “(Stores) are trying to keep customers happy, but (fraudsters) are taking advantage of that.”
Simpson’s hope is that the recent incidents will give stores a wakeup call to take greater preventative measures that protect their integrity, as well as seek greater differentiation at a time when retail has become increasingly homogenous. It’s a decision that would also benefit shoppers, who are now seemingly faced with the same choices everywhere they go, as stores stock the same fashion labels and products.
“There are increased counterfeits floating around, so every step of the way, there’s a greater chance of mistakes or fraud happening,” Simpson warned.
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