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Couture Club

By Gregg Sangillo

People tend to identify with their own

People tend to identify with their own "in-group" when looking at handbags.

If you see an acquaintance carrying a Louis Vuitton handbag, you might get a little jealous. And then if you look closer, you could discover something else: "It's a knockoff!" you say to yourself. But what if seeing a person with the knockoff handbag doesn't provoke that kind of judgmental reaction? You might accept fake handbags, and realize that you like the real Louis Vuitton bags, too.

Brand identity, taste, and social hierarchy all tie into Nelson Amaral's latest research. Amaral, an assistant marketing professor at American University's Kogod School of Business, and Barbara Loken, a professor at University of Minnesota, have a series of studies under review at the Journal of Consumer Psychology on individual reactions to luxury counterfeits.

People Like Me

It makes a difference if someone like you—and not just the devil—wears Prada. Among the observations made by Amaral and Loken, people tend to identify with their own "in-group" when looking at handbags.

If a wealthy person spots another wealthy person with a counterfeit Louis Vuitton, they'll appreciate the original brand more than if a working class person is carrying the fake. "If that brand is important enough for them that they're willing to take a social risk by using a fake and being caught, then obviously that brand must be really important to their group," says Amaral, who spent 12 years in sales and marketing before getting his Ph.D. Yet if the same wealthy person sees a working class person with the knockoff, they'll think a bit more negatively about the original Louis Vuitton.

Likewise, if a working class person sees another working class individual using a counterfeit bag, they'll like the original luxury brand much more. But then the research gets complicated. One might assume that when working class people see wealthy people using fake handbags, they'll like the real brand less. Surprisingly, that's not what happens. In these instances, working class people don't feel differently about luxury brands. (Whatever changes Amaral and his colleague did find here were statistically insignificant.)

What's to explain this? Amaral and Loken believe it relates to matters of social hierarchy. "Working class people expect higher class people to find value in that brand, and expect higher class people to feel that the brand is very important," he explains. "They think, 'That brand, it's for the wealthy person's group. It's part of who they are.'"

This reinforces research showing how people are conflicted about social class. "There's a whole body of work that finds that people don't like the fact that there are high classes and low classes and middle classes," Amaral explains. "But, despite not liking it, there's a sense of comfort we get when we see a society organized hierarchically."

They Are Everywhere

Counterfeits are now a $600 billion a year industry, mostly driven by sellers in China. But even though counterfeits are becoming omnipresent, the real brands may have minimal incentive to crack down on them. If some people feel better about the luxury brands when they see the knockoffs, why try to combat the imitators?

Amaral also talks about the new phenomenon of "purse parties," with upper class groups inviting counterfeit sales people into their homes. Partygoers buy fakes and incorporate them into their wardrobes.

Wealthy people do think more negatively about the real brands when they see working class people wearing knockoffs. Yet if top brands crack down on working class consumers carrying fakes, it might look like bullying, Amaral says.

That's not to say there's no cause for concern. Selling a fake handbag seems innocuous, but those same dealers are involved in much more nefarious activities, such as human trafficking. "Most of the smugglers of these counterfeits are also smuggling counterfeit drugs and people. So this is organized crime," he says.

The Allure of Style

Kanye West has given shout-outs to Louis Vuitton in his songs, and he had his own sneaker line with the luxury brand. The mercurial hip hop star has both endorsed and boycotted the brand over the years.

Amaral says little is known about celebrity impact on luxury and counterfeit consumption. Despite the lack of academic research, he suspects that companies have some intel on the matter. During the 2010 heyday of reality TV star Nicole "Snooki" Polizzi, the New York Observer reported that companies were sending her free bags made by their competitors. "Nobody in fashion wants to co-brand with Snooki," the Observer noted.

We're not living in the 1980s, a time associated with yuppies and profligate spending. Yet, even with a smaller middle class, Amaral says many Americans are still enamored with luxury items. And he believes this is partly a result of successful branding campaigns in the fashion industry. "There are middle class people who are saving for three years to buy one Louis Vuitton handbag," he says.

If some consumers are going the extra mile to purchase the real thing, counterfeits obviously attract a large pool of buyers. There's almost a democratizing effect. As part of these studies, Amaral and Loken did inform people that they were looking at knockoffs.

"Some of these counterfeit makers are so good that even the experts can't tell if it's a real handbag or a fake. It's getting harder and harder to tell the difference."