Artificial Intelligence: The Ultimate Weapon Against Trendy Super Fakes – Is This the End?

“The bag she wanted to sell with us was an Hermès Mini Kelly – it was visually perfect,” says Hanushka Toni, CEO and co-founder of the luxury resale company Sellier: she is talking about a potential seller. “However, when we inspected her, we noticed that she didn’t smell like an Hermès bag, that she has a distinctive ‘new car smell’…” Sellier ran the Mini Kelly through his new AI software. “It has been confirmed as a fake.”

Fashion is adapting to the rise of artificial intelligence in a number of ways. Resale company I’ve hardly ever worn itHEWI, recently launched the search optimization chatbot “Maia” on their platform, aiming to save customers hours of scrolling for a certain look or product; Shopify has also recently integrated ChatGPT into its Shop app, assisting sellers with product descriptions. But fighting the “super-fakes,” which have long plagued luxury brands and resale companies, is top priority.

The global market for counterfeit and luxury replicas is worth an estimated $1.9 trillion, with black market manufacturers using increasingly advanced techniques like laser cutting and 3D printing to confuse even the makers of the original product. With AI technology, luxury brands and resale companies have armed themselves with the data-powered authentication systems they believe will finally outwit them. These systems essentially compile a digital encyclopedia of the properties of counterfeit and authentic items, then pinpoint tiny inconsistencies in the fabric, stitching or metals. Brand owned by LVMH Patou recently launched the AI ​​verification system Authentique Verify, which digitally “chips” their items at the very beginning of the production chain, allowing them to trace them and prevent any return fraud (where fake items are sent back instead of original). Photographs of authentic products, taken with a phone, process all of their microscopic properties which, like fingerprints, presumably cannot be replicated.

We simply cannot risk shipping products that are not authentic

The scale at which most conglomerates work makes it risky to experiment with new counterfeit technologies. For smaller luxury brands and resale businesses, however, trying out the technology is a no-brainer. Sellier, a global resale platform founded in 2019, specializing in Hermès, Chanel and Louis Vuitton bags and accessories, with spends in excess of £60,000 and a clientele based in Knightsbridge and Monaco. Toni felt it essential to invest in AI when a customer was stung by a fake bag she had bought from an unnamed competitor. “It’s the most heartbreaking thing to say to people, as these aren’t small purchases and it’s often a challenge to get your money back.”

The company uses expert human authentication, but that’s not enough now, he continues. “With a bad fake, human authentication will get you there, but with a super fake, there’s still a 15% chance of failure.” Also, for a small company like Sellier, every transaction needs to be airtight. “With our low-volume, high-margin strategy, we simply can’t risk shipping products that aren’t authentic.”

Entrupy it works by sending you a smart device (a microscopic attachment) for an iPhone SE, if the luxury bags need to be authenticated; for trainers/sneakers, it’s a simple matter of downloading Entrupy’s app onto an iOS device. The app then scans and photographs the object before storing millions of data points on various images to arrive at a judgment. The advantage of the software is its age: since 2012 it has been ingesting the properties of thousands of authentic and counterfeit products to create an unrivaled database. Entrupy CEO and co-founder Vidyuth Srinivasan says he has “scanned” $2 billion worth of luxury handbags to date, with a remarkable 9.6% of those turning out to be counterfeit items.

For brands that use fair labor and quality products this is an advantage

Sellier now relies first on an in-house team inspection, then on a secondary brand expert, with Entrupy the third and final authenticator. Resale expert and consultant Graham Wetzbarger describes this approach as a “no-brainer”. He has himself authenticated more than $1 billion worth of luxury goods through his firm, Luxury appraisals. “If you’re making old Louis Vuitton wallets for £100, maybe it’s not worth it,” she says. (Sellier’s average basket price is, by contrast, £2,000-£4,000.) He also believes there should be an authentication approach tailored to each company’s business model. Global Luxury Shipping Market RealReal, for example, has set a goal of 40% AI-powered authentication in 2022, but only for handbags, since that market is so vulnerable to fakes.

Then there are the recent environmental regulations implemented in France, which bring brand supply chains under tight scrutiny and hopefully provide a further blow to the counterfeiting industry (especially as the legislation is expected to extend beyond France’s borders ). “Finally, the consumer will be able to see how sausage is made,” says Wetzbarger. “For brands that use fair labor and quality products, that’s a plus.”

Pierre Denis, the former CEO of Jimmy Choo and an investor in the luxury authentication space, cites blockchain (NFC or NFT code bars sewn into bags) as a preferable method to AI authentication for some brands. It is a technology that Louis Vuitton, Chloé and Prada are currently experimenting with.

Denis envisions an emerging luxury landscape where brands bring their supply chains in-house, as well as resale, and again apply bespoke solutions. But he mixes a cautious optimism about what AI can do with a warning about the relentless innovation of counterfeiters. “Everything can be faked,” he explains. “There are hackers in every domain.”