Introduction

Luxury goods are defined as goods that are of the best quality, most expensive, and/or produced in limited quantities [1]. Unsurprisingly, luxury products are prone to be counterfeited. Counterfeit luxury products can cost sellers and consumers a significant amount of money if they are not identified correctly [2]. Thus, several techniques have been established to ensure the authenticity of luxury products. Nevertheless, the authentication of luxury products can be costly and time-consuming as, in most cases, the thorough authentication of luxury products requires highly skilled specialists who need to be familiar not only with the specific authentication methods but also explicit characteristics of the luxury product being authenticated [3]. In contrast, some authentication methods can be used by consumers, requiring less time while producing only minor costs (e.g., [3,4,5]). Yet, these authentication methods can lead to uncertain results as these methods are not able to completely mimic the work of luxury product authentication specialists [6]. Due to this imbalance in access to authentication methods, and the potential for uncertain results, it is crucial to determine which specific features sellers and consumers require when authenticating luxury products.

This paper is an extended version of previous work presented at the International Conference on Future Data and Security Engineering [7]. It contributes to the luxury product authentication literature by illuminating which authentication methods are known to sellers and consumers, the most requested features during the authentication process, and, specifically in this extension, the most recognized deficits when authenticating luxury products from both a seller and consumer perspective. Consequently, the following research questions are raised:

  • RQ1: Which methods for authenticating luxury products are known by sellers and consumers?

  • RQ2: What are the most requested features when authenticating luxury products from a seller and consumer perspective?

  • RQ3: What are the most recognized deficits when authenticating luxury products from a seller and consumer perspective?

The paper is structured the following way. Following this introduction, the Sect. “Background” presents a literature review of previous studies dealing with the authentication of luxury products to provide the background of our study. The Sect. “Method” provides the methodology of this paper giving insights into how the data used in this study were collected. Consequently, the Sect. “Results” provides an analysis of the collected data and corresponding results. In the Sect. “Discussion”, the results are discussed, and the research questions are answered. Closing, the Sect. “Conclusion” provides a conclusion of the paper, limitations of our approach, and an outlook for future research.

Background

To gain an overview of previous studies dealing with the authentication of luxury products, a literature review was conducted in February 2022. Following vom Brocke et al. [8], the literature review focuses on research outcomes and applications, with the goal to summarize and integrate findings from literature, taking a neutral perspective for scholars specialized in authenticating luxury products. The literature search was conducted using the Scopus database applying the following search string:

TITLE-ABS-KEY (Luxury AND ("Fraud" OR "Counterfeit" OR "Authentication" OR "Authenticate")).

The literature review revealed 232 papers that were further screened for studies including, case studies, expert interviews, consumer surveys, or literature reviews containing relevant information about the authentication of luxury products to focus on studies presenting practical knowledge and knowledge summaries. This reduced the number of papers to a total of 15. The main findings of these papers, in terms of authenticating luxury products, can be found in Table 1.

Table 1 Literature review summary
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Looking at these previous approaches, we discover that 12 of the 15 studies propose better authentication methods for luxury products. Among these papers, a slight focus on blockchain solutions is observable as 4 of the 12 papers propose blockchain solutions. Even though most papers found focus on improving authentication methods, the most recent literature review by [1] concludes that combating counterfeits is an under-researched topic disregarding the needs of the industry. Still, this is also in line with the found literature review conducted by [9], which summarizes that effective authentication of luxury products must be addressed by the demand-, supply-, and legal side simultaneously. Nevertheless, in view of the increasing quality of counterfeit products, the survey of [10] suggests that authenticating luxury products with tools and techniques might not be possible in the future and thus proposes brands to develop new creative ways to socially authenticate purchases for their customers.

In summary, we show that no previous study points out which methods are currently known and used by sellers and consumers, and which key features sellers and consumers require from these methods to authenticate luxury products. In addition, no study pointed out explicit deficits when authenticating luxury products. In this regard, only [10] points out that the authentication of luxury products in itself might become in deficit in the near future. Thus, this study focuses on filling these research gaps.

Method

To illuminate which authentication methods are known to sellers and consumers, and the key features these groups require when using them, a mixed-method study combining an expert interview and a consumer survey was conducted. Mixed method approaches represent a combination of qualitative and quantitative methods and allow for a triangulation of data from different sources to extract new findings and modes of analysis [19, 20]. Such approaches produce insights into various phenomena of interest that are not fully understood using either a quantitative or a qualitative method only and have successfully been applied in a variety of settings [21,22,23,24]. More precisely, we combine qualitative expert interviews with a quantitative survey to include both deep and detailed expert knowledge and enrich it with the broader, quantitative consumer perspective. In the following subsections, we present detailed information about the conducted expert interviews (Expert Interview) and consumer survey (Consumer Survey).

Expert Interview

An expert interview was conducted to gather in-depth knowledge about the currently known methods for authenticating luxury products from a seller’s perspective. In this regard, expert interviews have shown to be well suited to collect insights regarding specific domain knowledge, which is difficult to uncover with survey-based methods only [25, 26].

For expert identification and selection, two main approaches can be applied: random selection and information-oriented selection [27]. In accordance with the aim of our study and the clearly focused domain of luxury product authentication, we chose an information-oriented sampling approach. Based on this structured selection procedure, we recruited eight sellers of luxury products with multiple years of experience of authenticating luxury products. More detailed information about the experts can be found in Table 2.

Table 2 Expert interview participants
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The data collection procedure of our expert interview follows four distinctive steps: (i) introduction questions collect details about the expert and ensure the expert status, (ii) a semi-structured interview to ensure a free flow of the interview but also keep the interview focused on the topic of authenticating luxury products, (iii) audio and video recordings as a basis for the transcription of the interviews, and iv) the generation of interview transcripts for further analysis [28, 29].

We analyzed the expert interviews by structuring the interview transcripts and applying cross-interview comparison to identify commonalities and differences between the expert opinions [30].

The interview comprises of 18 questions, divided into three main topics: information about the sold/owned luxury products, awareness of authentication methods, and assessment of authentication methods.

Consumer Survey

A consumer survey was conducted (30.06.–01.07.2022) using modified versions of the questions from the expert interview to gather in-depth knowledge about currently known methods for authenticating luxury products from a consumer perspective. In this regard, we adapted the questionnaire to make the responses of consumers and experts comparable, while maintaining the validity and reliability of the instrument. As such, for the consumer survey, we removed questions, which could not be answered by consumers (e.g., “How much money is lost due to deficits in authenticating luxury products?”) and reduced the complexity of the questions by providing participants with the answers from the semi-structured expert interviews as multiple-choice options. This led to a survey consisting of 12 questions.

Participants were recruited using the crowdsourcing provider Clickworker.com. Clickworker.com ensures a high level of participant qualification by performing ID checks, testing of writing and language qualifications, and a constant evaluation of their members’ response patterns [31].

In total, 248 participants were recruited from the German-speaking area (Germany, Austria, and Switzerland). A demographic overview and background information of the participants is shown in Table 3. No abnormalities or biases were observed.

Table 3 Demographics and background information
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To compare the answers from experts with the answers from consumers, we applied a Qualitative Comparative Analysis (QCA)-based approach following [32] to summarize the received answers from both groups, allowing us to highlight differences in the knowledge and requested features in respect to luxury product authentication methods.

Results

The results of our expert interview and consumer survey regarding the awareness of sellers and consumers about authentication methods are displayed in Table 4. The features desired from sellers and consumers for future authentication methods are displayed in Table 5. The most recognized deficits from sellers and consumers are displayed in Table 6.

Table 4 Awareness authentication methods
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Table 5 Desired features for authenticating luxury products
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Table 6 Deficits when authenticating luxury products
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Looking at Table 4, it becomes evident that the knowledge about authentication methods is unevenly distributed between experts and consumers. While most people in both groups are familiar with manual, visual, or auditory inspection of abnormalities, and the verification via serial number, the rest of the features are far less known. Especially, verification via blockchain is a method mostly known by experts and not by consumers. We observe that experts display a higher knowledge of authentication methods than consumers. It should be noted, as consumers were given multiple-choice questions, which originated from the answers extracted from the expert interviews, their ad hoc knowledge might even be lower.

Looking at Table 5, it becomes apparent that consumers desire more features for authenticating luxury products than experts. Both groups agree that the independent verification of serial numbers in an online directory and the traceability of the sales history are desirable features. Similarly, they agree that the traceability of ownership, home test for consumers, high-resolution images on the internet, and a digital service book are less important. In contrast, experts regard certificates for a successful authentication, fast authenticity verification, and uniform procedures for authenticating luxury products far less important than consumers.

Concerning the question if analog or digital authentication methods would be preferable, consumers and experts mostly agree that digital methods would be the preferred way. Still, only one expert prefers analog authentication, while more experts than consumers prefer a combination of both methods. Similarly, experts and consumers agree that sellers, followed by producers, followed by consumers are responsible for authenticating resold luxury products. They differ in the perception of who should pay for additional authentication services as follows. While consumers see mostly sellers and producers as responsible for such payments, experts see this responsibility as more evenly distributed with a strong focus on consumers.

Experts rate the ability to identify products via the blockchain (mean = 3.875; p =  < 0.009) and the ability to transfer product ownership via the blockchain (mean = 3.75; p =  < 0.015) significantly less than consumers (mean = 2.75; 2.73). The most important ability for both groups is to track the sales history of a product via the blockchain, and the least important ability is to sell luxury products using cryptocurrencies. In these cases, the perception of importance does not significantly differ between experts and consumers.

Looking at Table 6, it becomes evident that both experts and consumers perceive deficits in the methods used for authenticating luxury products. One area where the results differ significantly between experts and consumers is in the perceived difficulty of implementing these methods. Half of the experts reported finding the implementation of these methods to be rather difficult, compared to only 2% of consumers. A lack of trust in the reliability of these methods was reported by both groups, with three from eight experts and 46% of consumers expressing this concern. 20% of consumers felt that they were not qualified enough to use these methods, while this was not a concern reported by experts. A minority of respondents, two experts and 17% of consumers, did not see any deficits in the methods. Time constraints were also reported as a concern by both groups, with one expert and 5% of consumers feeling that they had to spend too much time on these methods. Finally, a minority of one expert and 2% of the consumers stated that they had to spend too much money on the methods used for authenticating luxury products.

Discussion

In regard to RQ 1, our results highlight that, overall, consumers have an average knowledge of authentication methods at best. While they are familiar with manual, visual, or auditory inspection of abnormalities, and the verification via serial numbers, more modern features (e.g., QR codes, NFC chips, RFID, and NFT) are only known by experts. This reveals an interesting contradiction. As stated by [10], future counterfeits might be indistinguishable for consumers, and thus, brands should work on social authentication processes for luxury products. Yet, our research shows that consumers possess little knowledge about authentication processes in general. Thus, it might be a more suitable solution to first educate consumers in terms of authenticating luxury products before abandoning authentication methods at all. This would also be in line with the findings of [9], suggesting that only addressing the demand-, supply-, and legal side simultaneously is the most effective authentication way of authenticating luxury products. This might be a particularly difficult endeavor, as stated by [1], combating counterfeits is still an under-researched topic disregarding the needs of the industry. This observation also surfaces in our research. Since from the 12 papers suggesting new authentication methods, only six (blockchain [6, 14, 16], RFID [3, 4], and QR codes [5]) are known by experts. It becomes apparent that for an effective alignment of consumers, producers, and sellers, more efforts must be placed on educating these stakeholders on the needs and possibilities of each other.

Regarding RQ2, it became evident that consumers wish for reliable authentication certificates, a fast authentication process, and uniform authentication processes. As stated before, the proper authentication of luxury products is a timely and cost-intensive procedure [3], which can produce high financial damage if done incorrectly [2]. Thus, it can be argued that consumers request features to reduce the costs and uncertainty of the authentication processes. For similar reasons, consumers might also request an independent verification of serial numbers in online directories and the traceability of sales history. These are also features which are most requested by sellers. Still, sellers (including consumers who want to resell products) might have different reasons for requesting a verification. In fact, sellers in most countries face significant legal issues when selling counterfeited products (e.g., Germany: up to 10.000€ fine and 3 years of prison) even if sold unintentionally [33]. Thus, they require a high amount of certainty regarding the result of an authentication process. Consequently, it could be argued that the requested features help sellers to enable a more secure authentication process. The remaining features (traceability of ownership, consumer home test for authenticity verification, high-resolution images of the original product on the Internet, and a digital service book) were not highly requested by sellers and consumers. Thus, all these features would add an additional layer of work to the already complex process of authenticating luxury products. Therefore, they would contrast the will of sellers and consumers to reduce the complexity of the process, highlighted by [3, 5, 15]. In general, sellers and consumers agree that future authentication services should be mostly digital. This is also reflected in the conducted literature review as only 2 [12, 17] of the 12 papers comprising new authentication methods presented purely analog, and four [3,4,5, 11] papers hybrid verification methods. A probable reason for this might be the high hopes that are placed on digital technologies to decrease the complexity of processes in general. Also, sellers and consumers agree that, overall, sellers should be responsible to verify the authenticity of luxury products. This indicates that the current status quo of the authentication process is acceptable for the involved stakeholders. Yet, this attitude might be counterproductive regarding the necessity of unifying the demand-, supply-, and legal side to ensure an effective authentication of luxury products as pointed out by [9]. Finally, sellers and consumers disagree on who should pay for additional authentication services. As pointed out before, the authentication of luxury products is very cost-intensive. Consequently, it is only reasonable to assume that neither group would be willing to increase these costs even further.

Concerning RQ3, the most recognized deficits when authenticating luxury products from a seller perspective are the difficult implementation. This is reasonable taking into consideration that the thorough authentication of luxury products usually requires complex, costly, and time-consuming process [3]. However, this highlights the need for further research and development in this area to make these methods more user-friendly and accessible. As such, various studies have explored the use of technologies, such as, e.g., blockchain [6, 14, 16], RFID [4], and QR codes [5] to improve the authentication process and therefore might be potential candidates for more streamlined authentication processes. In contrast, consumers do not regard this point as a major deficit. This might be as the less thorough authentication methods used by consumers are usually less complex and only produce minor costs (e.g., [3,4,5,6]). The deficit most recognized by sellers is trusting the methods to work accurately and the fear of not being qualified enough to use these methods. This is in line with [10], highlighting the need for educating consumers about authentication methods and to develop more accessible methods to authenticate luxury products (e.g., social authentication). Interestingly, many sellers also expressed that they do not trust the available authentication methods to always work. However, this also reflects in the literature. As such, [1] concluded that combating counterfeits is an under-researched topic, [9] summarizes that effective authentication of luxury products must be addressed by demand-, supply-, and legal side simultaneously, and [10] suggesting that authenticating luxury products with tools and techniques might not be possible in the future because of the increase in counterfeit quality. Nevertheless, it should also point out that a minority of sellers and consumers does not recognize any deficits in the presented methods. This could indicate that some sellers and consumers are not aware of the danger of the ever-increasing quality of counterfeit products [10], thus highlighting the need for a thorough sensibilization regarding this topic. Finally, only one seller and a minority of consumers stated that they have to spend too much time and money on luxury product authentication methods. This stands in contrast to previous research stating that the authentication of luxury products is a costly and time-intensive process [3]. However, as luxury products are highly valuable goods [1], it could be argued that for most sellers and consumers, the money and time spent on authenticating are negligible compared to the financial risk of selling or buying a counterfeited product [2, 33]. Therefore, although the authentication of luxury products is indeed a cost and time-intensive process, this might not be seen as a major deficit by sellers and consumers if it produces reliable outcomes.

Reflecting on the performed literature review, the opinion of experts, and the observed deficits, it became apparent that blockchain technology is a preferred direction of future authentication services. This ties in with the observations in our study that the traceability of product history and ownership is an important feature that is desired by both sellers and consumers of luxury products. Furthermore, QR codes represent the preferred method for representing and verifying the authenticity of luxury products. Blockchain provides the possibility of storing a digital representation of luxury products and provides a traceable verification of the history and ownership of luxury products. For instance, physical luxury products encoded in QR codes can be stored on the blockchain as a non-fungible token (NFT), thus providing a unique digital representation of the luxury product [34]. A traceable product history and ownership can be achieved with blockchain-based digital signatures providing a verifiable timestamp of the transfer of ownership between two consumers and between sellers and consumers [35].

The NFT minting for preventing counterfeit product trading does not suffice by itself. We depict in Fig. 1 a thought experiment that reveals the shortcomings about the online trade of a luxury watch that involves the minting of an NFT. The goal of minting a luxury watch assigned NFT is to establish a sense of identity authentication that assures the buyer the luxury watch is not a counterfeit product.

Fig. 1
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Conceptual running case for online trading a luxury watch with included NFT minting

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Merely minting an NFT does not resolve the issues of identity authentication of the luxury watch seller in Fig. 1. The buyer is still confronted with the problem of the credibility of the minted NFT and the issue of legitimate ownership transfer if the online trade is carried out involving the NFT. The seller may also mint several NFTs that reference the underlying asset of the same luxury watch to fraudulent repeat sales. As a mitigation option, certainly, the genesis NFT-minting phase can be complemented with multi-factor challenge-set self-sovereign identity authentication (MFSSIA) [36].

Briefly, in Fig. 2, the MFSSIA lifecycle depictions show the variability in terms of identity authentication. Thus, the issuer of challenges and respective responder can either be a system, device such as for IoT, an organization, or human. By storing first the challenge set on a blockchain and the corresponding responses too, immutable traceability is achieved for the life cycle. A subsequent evaluation of the responses yields either as a result that the identity authentication for a specific context is successful, or the responses are not satisfactory to culminate in a termination of a trade. Mapped to the thought experiment in Fig. 1, the challenge sets issued in support of the NFT printing could hypothetically first result in a self-sovereign identity authentication of the buyer and seller, the organization of the seller, and the ownership title for the luxury watch in that the seller possesses a purchasing invoice that is authenticated digitally.

Fig. 2
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The MFSSIA life cycle for challenge-response management [37]

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In this regard, the paper [38] points out the functional requirements of an application, which can verify the authenticity of luxury products using the blockchain. Namely, such an application must (1) verify brands, (2) let them mint luxury NFTs, (3) enable the owner of a luxury product to transfer ownership to a new owner, and (4) see the historic ownership of a luxury product.

Although experts rank blockchain and its related technologies high for achieving digital authentication of luxury products, consumers rank them lower. This could imply that experts, in contrast to consumers, are aware of the potential of blockchain-related technologies in ensuring a tamper-proof system of information storage. Still, blockchain-based applications that enable users of luxury products to independently verify product authenticity are currently not available for consumers, thus possibly reducing their knowledge and interest in them. Currently, common blockchain applications are mainly used in decentralized finance [39, 40]. As shown by the conducted literature review, studies have provided solutions for applying blockchain for authenticating luxury products along the supply chain (e.g., [6, 14, 16]).

Conclusion

In the current paper, we applied a mixed-method approach, combining qualitative (expert interviews) and quantitative (survey) methods. This paper extends our previous work [7] by adding a third research question (RQ3) that explores the deficits and challenges faced by sellers and consumers when authenticating luxury products.

Regarding RQ1, an overview of authentication methods known by sellers and consumers could be derived (see Table 4). It became apparent that consumers only have limited knowledge about digital luxury product authentication methods. Regarding RQ2, the most requested features when authenticating luxury products from seller and consumer perspective could be identified (see Table 5). It became evident that consumers request features to ensure a secure authentication process and features to reduce the complexity of the entire process. In contrast, experts mostly request features to ensure a more secure authentication process only. Regarding RQ3, the most recognized deficit when authenticating luxury products could be highlighted (see Table 6). It became apparent that sellers see the biggest deficits in implementing authentication methods and consumers do not trust these methods to work reliably, highlighting the need for more user-friendly and accurate solutions for authenticating luxury products.

In addition, our results could show that on the one hand a high level of agreement regarding the responsibility for ensuring authentic products. On the other hand, there are different levels of knowledge regarding authentication approaches and technologies and disagreement on who should pay for additional authentication approaches. Experts agreed that the blockchain may offer a high potential for product authentication, while consumers are mostly not aware of blockchain-based authentication for luxury products. However, both experts and consumers agreed that the most desired features include tracking sales history and traceability of ownership.

In summary, the contribution of our paper is twofold. First, we expand the body of luxury product authentication literature by providing a unique view on the most requested features and deficits when authenticating luxury products from seller and consumer perspective. Second, our work provides future research endeavors with a plethora of starting points. On the one hand, the development of novel and innovative authentication approaches based on technologies as, e.g., the blockchain, can build on the identified requirements and are hence provided with an ideal starting base. On the other hand, the identified important and less important features may also be used to further develop or adapt existing solutions from practitioners’ point of view. Future research may also be conducted with a focus on additional countries or specific types of luxury products to provide further details for the identified requirements. It would be interesting to analyze the differences in product authentication requirements between different categories and value ranges of luxury products and compare, e.g., watches with jewelry and cars or works of art. Broadening sample sizes for additional countries and comparing such results with our results would also increase the generalizability of results and identification of cultural differences in authentication requirements.

A limitation of the current paper might be the relatively small number of experts participating in the expert interviews. However, by applying the information-oriented, structured sampling approach presented in Sect. Method, we ensure the selection of actual experts with high levels of domain knowledge. This careful selection allows for generating qualitative results, with high internal validity [25, 41].