Protecting the brand: resident law firm, DWF, explores the retail challenges in 2013

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Meikle: dot shops offer retail brands new marketing opportunities

Meikle: dot shops offer retail brands new marketing opportunities

Retailers can expect more change in 2013. From social media to reputation management, phishing attacks and dot shop, Ed Meikle, partner in the retail group at business law firm, DWF, claims reacting to change will no longer be enough

Brand value

Every business owns valuable intellectual property, from its business name and branded products, to its patented and licensed technology, market-leading know-how and cutting edge software. Each of these individual elements is encompassed within ‘the brand’, making it a focus for protection for those looking to safeguard their reputation and preserve customer satisfaction.

One way retailers can maintain brand perceptions is to track, understand, and ultimately influence individual customer behaviour. The importance of this was first realised following the launch of the Tesco Clubcard, when Lord MacLaurin, then chairman of Tesco, said: “What scares me most is that you know more about my customers after three months than I know after 30 years.” 

Nearly 20 years later, being able to cost effectively track individual consumer behaviour has never been more important, and the harvesting of this information extends beyond loyalty schemes to social media monitoring. 

Harnessing social media

By maintaining a social media presence, brands are not only able to ‘listen in’ to consumer opinion but can also protect themselves online by implementing an engagement strategy consistent with the wider marketing plan. Such a strategy can address any issues, taking negative conversations ‘offline’ to be dealt with by a specialist customer satisfaction team, as well as removing  infringing content on Facebook or defamatory comments on Twitter. By taking a proactive approach and registering official, company controlled accounts across the various social media platforms, retailers can also help prevent others from impersonating their brand in a potentially damaging way. 

It is fair to say today’s retailers are operating in conditions that are changing faster than ever before, presenting new challenges in the policing and protecting of their brand identity and reputation online.  The ability to react quickly, but at the same time sensitively and proportionately, is now a standard skill-set in the battle to preserve and maintain a company’s integrity and intellectual property rights.

Phishing attacks

A significant issue for retailers and their customers is the rise in phishing – a process in which ‘phishers’ attempt to acquire personal information by impersonating a trustworthy entity, usually via email. The festive season invariably sees an escalation in such attacks directed against retailers and Christmas 2012 was no exception. Emails were circulated, apparently from Asda, asking customers for personal data in return for entry into a (non-existent) prize draw. In order to protect its brand, Asda had to react quickly and alert consumers to the scam, urging them not to hand over their personal information. In December 2011, Tesco had to warn its customers of a similar scheme.  

Retailers aren’t helpless against such threats. The portfolio of brand management tools now includes anti-phishing software, as well as the monitoring and challenging of unauthorised domain name registrations – all important elements in an effective brand protection strategy.

Dot shop

From .shop to .grocery, the online retail world is about to be transformed. In December, internet regulator ICANN held a raffle in a Los Angeles hotel to choose the order in which new domain name extensions will be released, with the first names going live in May 2013. These new extensions, such as .shop and .paris, will give internet users a far better idea of what the webpage will offer them and will also assist search engines to provide the most relevant results. 

This is a great opportunity for retailers to ring-fence their online estates, and it’s perhaps unsurprising retailers dominated the first 2,000 names chosen by ICANN. Selected at random, the lucky names to be introduced in the first round include Wal-Mart’s .asda, .walmart, .george and .samsclub; McDonald’s applications for .mcd and .mcdonalds; and The Gap Inc.’s .gap, .oldnavy and .bananarepublic.  Other retail names chosen as part of the first wave include .tkmaxx, .safeway, .lidl, .zara, and .tiffany.

Though not many British-based retailers were chosen, some UK companies were successful, and will be able to keep an exclusive hold over their new extensions. For example, Next’s applications for .next and .nextdirect made it through, as did The Boots Company Plc’s .boots. As these companies migrate their websites to these new extensions and inform their customers of the move, they should find the number of phishing attacks decreases. Those attempting to impersonate a retailer’s site will now find it more difficult as they will not have access to the ‘official’ extension, such as .asda.

Battle of the retailers

While some have been successful in getting their first choice extensions, others are set to have a fight on their hands. Retailers Safeway and Wal-Mart have both separately applied for the .grocery extension, and with an auction to decide who wins the name, they will have to weigh up the potential return on any investment. 

And it’s not just retailers trying to snap up retail based domain extensions. More generic names such as .shop have also been applied for by domain name companies in the hope that businesses will pay high premiums to have these suffixes attached to their email addresses and websites – whether to use them publicly, or simply to protect their trademarks against cyber squatters.

Advantage Asda

For the brand owners that have secured their names as ‘.brand’, the customer-facing marketing opportunities could prove to be an interesting new dynamic, particularly in relation to customer-retention.  Asda, for example, will now have unlimited opportunities to use .asda in new promotions and initiatives.  

But what about Tesco? Its name wasn’t chosen in the first round, and it could have to wait until the final batch of names is approved at the end of 2014 before it knows if it will be able to use .tesco. Those in this first wave then, including Asda, Next, Boots and TK Maxx, have a considerable advantage over those that follow.

Proactive brand protection

As the online marketplace continues to change so rapidly, retailers would be well advised to keep up with the times, and ensure their marketing strategies put them at the forefront of online developments in order to protect their brands. Whether it’s preventing individuals or business from cyber-squatting, taking negativity offline, or embracing the new domain extensions, retailers should embrace online, and take a proactive approach to protecting their brand in cyberspace and beyond.