There was a time when luxury brands were at war with resellers; however, the growing consciousness about fashion circularity in the new-age consumer has flipped the coin. Today, brands and department stores from Stella McCartney to Neiman Marcus are partnering with pre-owned-luxury marketplaces like TheRealReal and Fashionphile.
The opportunity is obvious with ThredUp’s 2019 Resale Report predicting that the second-hand apparel market is expected to reach $51 billion by 2023 and has grown at a rate 21 times faster than the apparel retail market in the last three years. As luxury resale becomes omnipresent, so does its unshakable partner-in-crime, counterfeiting, with knock-offs getting near impossible to crack. The go-to excuse in this sector is that ‘authentication is more of an art than a science, and can only be learnt through experience and intuition.’
TheRealReal gained first popularity, then notoriety for its supposed ‘rigorous, multi-point authentication process by highly trained gemologists, horologists, brand experts and art curators’, who were later revealed to be just overworked copywriters. Therein lays the need for an intermediary specialist vouching for authenticity and eliminating forgeries from being sold. Recently, a handful of leaders have emerged strong with technology-driven solutions ranging from LVMH’s blockchain platform AURA to Rebag’s automated pricing app Clair.
Second-hand accessory-focused marketplace, Fashionphile, is one such disruptor taking out guesswork from the process. Their lab generates tech from equipment that detects lab-grown diamonds (sometimes indicating counterfeit jewellery) to a device that can precisely identify Pantone shades (useful when it comes to Hermès products) and a tool that reads micro frames of a product to compare with verified material samples.
“You can’t scale resale without technology,” Sarah Davis, founder of Fashionphile says. “It’s absolutely necessary. We sell 6,000 pieces a week and we wouldn’t be able to maintain that without help from technology. It’s all about combining artificial intelligence with human intelligence.” Among other equipment that is used to check for imitations, there is also an X-ray like a machine that scans bags to reveal minute details of the metal structure and hardware interiors, usually key to spotting even the ‘superfakes’.
Another relatively silent but primary player is Entrupy, a company that automates authentication for luxury handbags through machine learning and AI. With a company claim of 99.1% accuracy and over 400 online and physical retail clients, the brand implements its ‘algorithm’ into a phone-like gadget, which then analyses a handful of fed-in photographs of the product interiors and exteriors.
The algorithm is built on years of machine learning, collecting data of more than 100,000 real and fake luxury designer bags, since the company’s launch in 2012. Two weeks ago, in early February, Entrupy also launched a prototype of Legit Check Tech (LTC), an authenticity tool designed specifically for sneakers. It is essentially a box wired with six cameras at different angles that snap multiple photos sending information to a database that within seconds checks 500 to 1300 data points on the shoe and delivers a final verdict. Currently, the prototype can only authenticate Adidas and Nike, but CEO Vidyuth Srinivasan has plans to add more.
"We needed something that can really be quick in terms of learning and this system worked the best for us. We're in a position where, if a new drop came out next week, we can take anywhere between one and ten days to make that drop ready to be authenticated," said Srinivasan.
With clients like Nordstorm and Selfridges who face a fair amount of fraudulent returns for full-price refunds, Entrupy is simplifying and solidifying the authentication process. A gadget is a more efficient solution than countless hours of training for every sales associate. Whereas at Fashionphile, despite the tech-integration, each authenticity employee has to undergo a minimum training of 5,200 hours in 7 brands, or 6,100 hours to work on 21 brands and 6,460 hours to be able to work on any second-hand product.
Are counterfeits going to rise to the challenge or has the luxury knock-off industry finally been served?
Image: Courtesy of The Real Real