Like all other sectors, luxury brands have not been immune to the pandemic, and in fact, the onset and continued effects of COVID-19 have prompted a sizable downturn in sales – and margins – in the luxury goods segment. But it is not merely revenues that have been affected by the pandemic; no shortage of brands have significantly overhauled their strategies, which has seen them “brave new industry sectors,” with software and electronics, for instance, “brimming with potential for luxury brands,” and also shift to focus on e-commerce with more rigor than ever before. The increase in online spending by consumers and corresponding reliance on e-commerce by brands has brought with it a need for increased attention among luxury brands to issues involving domain names.
Given the marked increase in e-commerce appetite among high fashion and luxury goods brands, the need to “protect their digital brand identities is more vital now than at any other time before,” Clarivate states in its recently-released “Luxury brands: Re-calibrating brand strategies for a changing world” report, noting that domain management is a critical part of the ownership equation, particularly for overly image-conscious luxury brands.
Domain Name Strategies Are Mixed
Examining the domain name registration strategies of the some of the world’s leading luxury players, Clarivate found that the “picture is decidedly mixed.” For instance, the London-based business insights and analytics firm points to the likes of Rolex, Moncler, Swatch, Chanel, Calvin Klein, and Gucci as among the companies that “have the most comprehensive domain registration coverage with a proactive registration approach” that helps to keeps unauthorized “third-party registrations to a minimum.” On the other hand, it discovered that brands – including Schiaparelli, Givenchy, Fendi, Yves Saint Laurent, Supreme New York and Chow Tai Fook – “have surprisingly low ownership scores,” which means that they are “operating in global markets primarily through configured webpages under one domain name, rather than actively engaging their brand through global domain registrations.”
Companies’ approaches are also mixed when it comes to domain registration strategies in Asia, where there is “no single, preferred approach.” According to Clarivate, companies tend to fall into one of a few main camps. “Some brands, such as Armani, have opted to operate under their primary .com site” regardless of geographic location. For instance, Armani uses the armani.com/cn domain to reach consumers in China. The result, per Clarivate, is that the armani.com.cn domain name is registered to a third party. Another strategy is the “hybrid approach,” in furtherance of which companies register an array of geographic domain names for “purely defensive purposes, while creating local content on pages from their .com site.” Burberry is one such example, having secured all the major country-code TLDs (ccTLDs) extensions including .cn, .jp, .hk and .tw, but nonetheless, operating its regional content from pages, such as hk.burberry.com, which are tied to one overall site.
Given the varying approaches to domain name strategy, Clarivate contends that luxury brand owners can benefit from a strong domain registration policy and strategies that incorporate primary brands, as well as common “high-risk” top level domains, including “.org, .net, .asia, .shop and .store.” Where incorporation of these terms into a registration policy is not possible, Clarivate asserts that “luxury brand owners may monitor domain names that contain descriptive terms such as those mentioned, and equally, may consider Asia and other geographical areas of economic growth for their brands in their registration policies.”
Trends in Litigation and Expansion
One place where there are clear trends is in domain name arbitration and litigation. “Mainland China’s penchant for luxury brands and Europe’s position as the home to many of the world’s most recognizable and desired luxury brands means they are the primary focus of luxury brand litigation,” Clarivate states. “When considered as a region, Asia outstrips Europe in terms of the location where the highest number of actions and cases are filed by luxury brands.” 41 percent of brands’ domain-specific actions were initiated in Asia between 2010 and August 2021 (with 31 percent in Mainland China, alone), Clarivate found, versus 21 percent of actions that took place in Europe and 16 percent in North America.
And as briefly noted at the outset, Clarivate’s report touches on another trend that has bearing on the trademark space: companies’ active expansion beyond their most immediate offerings in terms of market segment, a trend that has, in some cases, been accelerated by the pandemic. The result is that “previously clear lines between sectors are blurring and the competitive set is widening,” as companies in the luxury brands sector continue to grow their presence in “non-traditional sectors.” Clarivate points to luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton as an example of what such inter-industry expansion looks like, stating that “computer, software, electrical and scientific products” are among the top five in types of trademark filing activity for LVMH in recent years, along with enduring filings for leather goods products, of course, and cosmetics.
“Another area of growth and diversification for LVMH,” per Clarivate, is the self-care category, with candles, in particular, proving to be “an increasing focus in LVMH’s strategy,” as indicated by an increase in filings in the relevant trademark class of goods, namely, lubricants and fuels.
Still yet, delving deeper into the family of brands owned by LVMH, Clarivate noted that the larger trend towards the adoption of augmented reality (AR) and virtual reality (VR) technologies, as well as developments like non-fungible tokens, is “particularly pronounced for Louis Vuitton,” as indicated by “a spike in filing in the category for computer games and software in 2018 and 2019, which preceded the launch of the game, Louis.” Trademark filing activity in this realm is less remarkable for other LVMH brands, such as Fendi and Christian Dior, Clarivate states based on its trademark filing findings. Chances are, that is likely to change, as more brands venture into the metaverse in order to cater to an increasingly large pool of consumers.
