Despite the credit crunch, the online retail sector continues to grow (albeit at a slightly slower rate than in previous months). Improving Your Online Look was a timely opportunity for the retail sector to gather and consider the future of e-tailing and how to maximise the time a customer spends online.The seminar held at Olswang on 24 October kicked off with a fascinating talk from retail consultant, Tony Stockil from the Javelin Group, who took us on a whistle-stop tour of his view of how the online sector is likely to develop over the next 2 to 5 years.
Ashley Hurst, associate in the Media Litigation team at Olswang, discussed the issues surrounding adding social networking capability to retail websites. As well as using established social networking websites such as MySpace to generate publicity for their products and drive traffic to their websites, many retailers are now looking towards developing their own websites in order to build in elements of user-generated content to increase brand loyalty.
Ashley examined how, from a legal point of view, website operators can be held liable for user-generated content on their websites, risking being sued for libel, breach of privacy and intellectual property infringements in respect of material posted on their websites by customers or other interested internet users.
Online sales have been out-performing the high street for some time now. For many retailers, entering the online space can be a time consuming and costly exercise. Tom Torkar, associate in Olswang's Technology team, looked at sourcing some or all online retail processes from a third party service provider as an answer to these concerns. Typically outsourcing can result in lower costs, an improved customer service and it should involve a service provider who has a higher degree of expertise and resources than the retailer has. But, if not managed correctly, the process can lead to a loss of control and visibility of the sales processes and the customer experience. Tom went throught some of the contractual mechanisms that retailers can put into place to manage the service provider's performance and to reduce risks for a retailer.
Sarah Wright, partner in the Intellectual Property team at Olswang (and founding member of the Fashionista team), discussed the unique challenges faced by brand owners online as they try to police misuse of their brands. Sarah explained that while the domain name dispute processes offered by ICANN (the UDRP) and Nominet are quick and relatively inexpensive, a brand owner cannot recover its legal costs or get any damages. Filing a UDRP claim against a domainer therefore has little deterrent effect. By issuing Court proceedings for trade mark infringement, a brand owner hits the cybersquatter where it hurts: the pocket.
Another challenge for online retailers is the growing cost of paid-for searches and the fact that since May 2008, Google amended its Adwords policy making it possible for competitors to purchase keywords identical to someone else's brand to direct traffic to their website. Without a precedent in the UK confirming the legality (or not) of purchasing third party trade marks as keywords, retailers are faced with a stark choice of either joining in and bidding on others' brands or watching their online ad spend grow as they compete with rivals to purchase their own keywords.
