Even before the pandemic, it was possible to see the increasing shift to digital shopping. COVID-19 has dramatically accelerated this transition at breakneck speed, to a point where we are now seeing online traffic and sales already reaching numbers that weren’t expected until 2025! Essentially, according to a McKinsey article, it has compressed five years of digital adoption into about 8 weeks(1), with online sales predicted to reach $4.5 trillion in 2021(2).  Lockdowns around the world have catapulted everyone’s buying habits, social interaction and cultural consumption into an almost entirely digital environment; even those less internet savvy or trusting!

However, with all this progress and innovation, unfortunately there are also cyber criminals ready and waiting to capitalise on the emerging trends to make money fast. Cybercrime mirrored the online explosion in 2020 with phishing and scam fraud growing by 59%(3), counterfeit detections increasing by 38%(4) and malicious domain activity up by 22%(3)! More specifically, the WIPO, cybersquatting case filing surged with a 13.8% increase in UDRP cases in 2020(5).

 

Worrying trend emerging

It is, therefore, a little concerning to see a trend emerging in the last few weeks of companies wishing to cut the number of domains within their portfolio, particularly brand name domains! Leaving domain names to expire, or actively cancelling them, is an extremely risky business! Without even mentioning the obvious consequential issues; such as, domain squatting, damage to brand reputation (through scamming and counterfeiting), and the potential access to company data; it also suggests somewhat a lack of understanding from within the business of the intrinsic link between your brand’s trademarks and domain names. If a company is willing to invest in a trademark for that brand in a particular region, why not the domain?

 

So why are companies choosing to cut their domain portfolios when their online sales are booming?

This is a good question!

Was it registered as a defensive domain? Is there a feeling that the domain isn’t “used” anymore? Perhaps a country domain that is not active? If the perception is that it is not “used”, there is a big difference between whether a “domain name is used” or if the “domain is important to have” from a brand protection perspective. Worst case, “unused domains” can always be redirected to the global or country domain in order to avoid any “dead ends” for the customer.

Is it a cost-cutting exercise?  If it is cost-led, the company should consider the value of the domain, even more so its future value and commercial potential. As online sales continue to increase, consumers will expect more from local websites with local brand names, for example. Companies will need to act more local in order to interact with their customers and provide a more tailored and positive customer experience. Recent data has shown that, particularly during the COVID-19 period, local domains have outperformed the global sites with better conversion rates. Any short-term savings have the potential to come back and bite in the future.

Or is an awareness issue? Is there a lack of understanding and recognition across departments (Management, Finance, IP, Legal, IT, Marketing etc.) to appreciate the relationship and value between a company’s brand trademarks and its registered domains? If a company has not strategically mapped out their trademarks per region to what brand domain names they have registered, it is easy to see how a decision to cut a domain is made without thinking about the bigger picture.

Whatever the reason, before cancelling any domains, companies need to ask themselves these three questions:

– Do you have a trademark registered for this brand in this country?

– Do you have online / physical business for this brand?

– Do you expect business within the next 5 years for this brand?

If the answer is YES to any of these 3 questions, then you should keep the domain!

 

Understanding the value or your domains

As COVID-19 has driven us into an even more global, digitally-driven economy, domains are and will remain a valuable IP assets, key to any successful e-commerce strategy. Gone are the days when domains are considered the poor relation to trademarks, it is now essential for any business in a digital environment to understand the commercial value of their domain portfolios and adopt a strategic, long-term view to ensure they are adequately protected. Instead of making cuts, organisations should consider boosting their investment in domain management to secure those that are likely to prove of paramount importance to their future operations. As online pushes to the fore of global economy, this will only become even more critical.

Check out more information on how to form and implement effective domain management strategies here.

 

1) https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-covid-19-recovery-will-be-digital-a-plan-for-the-first-90-days#

2)https://financesonline.com/ecommerce-trends/#link1

3) https://www.interpol.int/en/News-and-Events/News/2020/INTERPOL-report-shows-alarming-rate-of-cyberattacks-during-COVID-19

4) Figure is based on the sale of counterfeit goods across apparel, toys, home goods, accessories and sporting goods between March and April 2020. https://iccwbo.org/content/uploads/sites/3/2020/08/2020-icc-sme-guide.pdf

5) WIPO,” WIPO cybersquatting case filing surges during COVID-19 crisis”, https://www.wipo.int/amc/en/news/2020/cybersquatting_covid19.html,Jun 2020

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