18.1 Mission and Purpose of .VONS Safeway Inc. (ʺSafewayʺ) is one of the largest food and drug retailers in North America. As of December 31, 2011, the company operated 1,678 stores in the Western, Southwestern, Rocky Mountain, and Mid-Atlantic regions of the United States and in western Canada.... Read more
18.1 Mission and Purpose of .VONS
Safeway Inc. (ʺSafewayʺ) is one of the largest food and drug retailers in North America. As of December 31, 2011, the company operated 1,678 stores in the Western, Southwestern, Rocky Mountain, and Mid-Atlantic regions of the United States and in western Canada. Safeway content is accessible in multiple TLDs, including the .BIZ, .COM, .INFO, .NET, and .ORG gTLDs, and the .CA, .CO.UK, and .US ccTLDs.
VONS, a division of Safeway, began as a 20-foot wide neighborhood store in downtown Los Angeles that catered to the needs of local families. Its founder, Charles Von der Ahe pioneered ʺcash and carryʺ as an alternative to ʺcharge and deliveryʺ. VONSʹ growth and innovation over the years has been non-stop. Thanks to the introduction of pre-packaged perishables, VONS was able to offer some of the first self-service produce, meat and deli departments. This milestone marked the advent of the first true supermarkets as we know them today. The most explosive growth occurred during the 1970ʹs when VONS branched out to 159 stores with 16,000 employees, making it firmly the #1 grocery retailer in Southern California.
Today the VONS operation, which includes Pavilions stores, is now a part of the Safeway family of companies. VONS stretches from San Diego to Fresno, from Clark County, Nevada to the Pacific. Its 325 stores serve millions of Southern Californians and Nevadans. The marketing area that Vons covers comprises some of the most affluent, forward thinking, culturally mixed communities in the U.S. The VONS business strategy has always been to provide for the needs of these communities with the highest quality meat and produce at competitive prices.
Safeway will analyze and evaluate other .BRAND gTLD applications as well as general market adoption to determine short- and long-term potential best-in-class use case options to more effectively service and enhance its online strategy. Safewayʹs current operating strategy is to provide outstanding value to consumers by offering a unique shopping experience in its stores and online, with a wide selection of high quality products at low, everyday prices and attractive Club Card specials. Safeway is also taking a brand management approach to building high quality proprietary Consumer brands with significant innovation and new product development work.
The intended future mission and purpose of the .VONS gTLD is to serve as a trusted, hierarchical, and intuitive namespace provided by Safeway and its qualified subsidiaries and affiliates for consumers. Safeway will be the entity to bring the .VONS gTLD to market and is also applying for .SAFEWAY, .JUSTFORU, and .GROCERY ("Safeway Family of gTLDs").
Although ICANN has not recognized a .BRAND gTLD specification in the current version of the Applicant Guidebook, it is widely anticipated within the brand owner community that this will become a specialty subset of new gTLDs. The .VONS gTLD was planned as a .BRAND gTLD, with the goal of protecting VONSʹ online presence and identity, expanding its marketing and promotional efforts, providing a secure channel for products and information online, and offering a platform on which to consolidate many of the intellectual property activities of VONS.
Safeway intends to initially limit registration and use of domain names within the .VONS gTLD to Safeway and its qualified subsidiaries and affiliates. This initial use will allow Safeway to establish its operations and achieve full sustainability. This limited distribution, coupled with the other requirements set forth in Specification 9 of the template Registry Agreement, is intended to exempt Safeway from its annual Code of Conduct Compliance requirements.
Safeway has currently planned a four-stage rollout for the .VONS gTLD:
1) Stage 1
In the initial stage of implementation of the .VONS gTLD, Safeway will register a limited number of second-level domain names and, potentially, use .VONS domain names to redirect to VONS content in the .COM TLD.
This will provide Safewayʹs IT and security personnel with the time to run a number of tests to ensure seamless and secure access using .VONS domain names, interoperability with various software and Web-based applications, and unbroken and secure use of all domain names. This will also allow the appropriate Safeway staff to coordinate with the internal and external staff responsible for the delegation and setup phases of the .VONS gTLD to ensure proper transition from delegation to full operation.
2) Stage 2
Once all testing has been successfully completed, Safeway will begin allocating domain names in .VONS for more widespread internal use. During this same period of time, Safeway will begin evaluating strategies to potentially migrate traffic away from its current network of second-level domain names, which are registered in a variety of TLDs, to the new Safeway Family of gTLDs.
It is during Stage 2 that Safeway will evaluate expanding the operations of the gTLD to permit registration by other registrants, including licensees and strategic partners. Should this lead to a decision to extend registration rights to other parties, the expansion would take place during Stage 3. However, any expansion would be conditional upon a review of Specification 9 (Registry Code of Conduct), as set forth in the template Registry Agreement, to ensure compliance with Safewayʹs business model.
3) Stage 3
Depending upon the analysis of the evaluations undertaken in Stage 2, Safeway may begin to implement the permanent migration of Internet traffic away from the TLDs in which Safewayʹs domain names are currently registered, to the new Safeway Family of gTLDs. It is during this stage that Safeway may also implement its decision to extend registration rights to a wider class of registrants, including licensees and strategic partners, depending upon compliance with Specification 9, as noted above. The dates of such an expansion are subject to change depending upon business, strategic, and industry factors at the time.
After consideration of the following factors: analysis of Safewayʹs existing domain name portfolio; internal analysis of marketing initiatives; and the fact that Safeway will have full control over the number of registrations in the .VONS gTLD namespace, Safeway is confident that the number of domain name registrations will be less than 500 in the first five years of operation.
4) Stage 4
Based on its experience with any expansion implemented in Stage Three, Safeway will assess whether its business plan and expansion strategy should be augmented by extending registration rights to a wider class of registrants, including, potentially, Safeway and VONS customers. Safeway anticipates that changes to the domain name industry, particularly the impact of .BRAND gTLDs, will take at least five years to be realized and assessed. Any decision to expand the .VONS gTLD beyond use by Safeway and its qualified subsidiaries and affiliates will take into account this experience as well as the technical analysis of potential expansion.
The potential use of the .VONS gTLD by Safeway will also be driven by Safewayʹs future business strategies for VONS as identified in its annual report and investor filings, see http://www.safeway.com/ShopStores/Investors.page#iframetop.
Utilizing current projections based upon Safewayʹs existing businesses, future business plans, current domain name portfolio, and other strategic factors, Safeway estimates that second-level domain name registrations will be in line with the projections set forth in the financial template provided in response to Question 46 of this application.×