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As Counterfeits Flood the Marketplace, Consumers Demand Brand Accountability

When it comes to fashion, image is everything. Consumers proudly display labels of the hottest designers, the newest styles, and as of late, the causes they care about. In fact, socially conscious consumers are a growing category, and they care as much about the sustainability and ethical practices of the brands they wear as they do about their fashionable relevance.

Sustainable fashion appears to be much more than a passing trend; it is more like a fast-growing movement. In the past few months, the British Parliament created a fast-fashion tax, the UN hosted a Conference on Sustainable Fashion and sustainability was front and center in New York, Milan, London and Paris fashion shows. And, at the Global Wellness Institute’s annual summit in February, the phrase “well fashion” was featured to describe a new era of sustainable, ethically made, and inclusive clothing.

Smart fashion brands are focused on producing sustainable apparel and ensuring that their supply chains are using environmentally responsible practices and operating with high ethical standards. But even the most responsible actions are being threatened by some overbearing forces attacking the integrity of the industry.

First there is the proliferation of fake products or “knock-offs” that often are hard to differentiate from the real thing. Apparel and footwear top the list of products making up the largest share of seizures of counterfeit goods in terms of value, according to the “Trends in Trade in Counterfeit and Pirated Goods” report released in February by the Organization for Economic Cooperation and Development. The report puts the value of imported fake goods worldwide at $509 billion, based on 2016 customs seizure data, up from $461 billion in 2013. This represents 3.3 percent of worldwide trade, a figure that continues to rise. The U.S. was listed as the country most affected by counterfeiting, with 24 percent of brands or patents impacted by the fake products seized.

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As debilitating as counterfeit products are, another less well-known phenomenon—the gray market—is equally concerning and often even tolerated. Also known as “parallel import/diversion,” the gray market encompasses unauthorized suppliers or distributors selling authentic branded items but legally distributed outside the official distribution channel without the trademark holder’s permission. Gray market products often are sold at lower prices or, in areas where demand for the product is high, the price is jacked up. Products sold through the gray market often don’t have the manufacturer’s warranty or after-sales services and may be “materially different” from the authentic products in terms of quality control, product characteristic and labeling.

The third problem involves control (or lack of it) over the supply chain. The apparel supply chain is typically complex and segmented, often spread over several continents. This makes tracing the origin of garments difficult, opening the potential for corners to be cut in processes, materials to be replaced with inferior substitutes and the unethical practice of using forced labor in manufacturing. Consumer awareness and concern about this problem is high—one campaign using the hashtag #whomademyclothes had 99 million impressions on Twitter in 2018.

The ability to verify sourcing claims is a huge issue today. In addition to ensuring that the components of a product are authentic from the source and throughout the supply chain, consumers are demanding the ability to verify that the manufacturer who is making a claim, such as about environmentally responsible practices or the use of recycled materials, can prove that claim with absolute certainty.

According to a report by market analyst Key Note, brands by the droves are rushing to prove that they can trace their supply chains all the way back to the mill or field the materials is sourced from. But traceability is not easy due to the varying suppliers and production steps involved and the often convoluted journey materials take from source to sale. But advanced technologies offer brands innovative tools to efficiently and reliably verify materials.

For example, Applied DNA Sciences has developed a platform for tagging and tracing products from source to shelf called CertainT®, which uses small DNA fragments or identifiers on an industrial scale. Purified enzymes are used to manufacture DNA fragments, each one containing enough information to be used as a “molecular bar code,” much like an ordinary ink bar code on a label.  DNA tags can be applied at the source for many fibers, such as cotton, wool, hemp and synthetics, allowing the fiber to be tracked and authenticated throughout the entire supply chain. The finished product can easily be tested to ensure that it is 100 percent authentic. When the product is in the store, the label will include the CertainT logo to give a consumer complete confidence that it’s the real thing.

Apparel consumption continues to rise, and the industry is expected to grow by at least 50 percent over the next 10 years. This makes the need for sustainable and traceable garments that much more important. It’s reassuring to know that solutions exist to help fashion-forward brands ensure that their apparel seamlessly integrates an optimal balance of sustainability and style.

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Stephen Birkhold is a branding expert and a prominent leader in the fashion industry. He has served as CEO for globally recognized apparel brands including Bebe Stores, Lacoste, Diesel, and VF Corporation. His expertise extends to all facets of the industry including sales, marketing and manufacturing. Birkhold recently joined Applied DNA Science’s Strategic Advisory Board and is working as a consultant to help the company with market penetration in the fashion and luxury apparel and accessory markets.