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We’re a society obsessed with getting feedback on everything from bagels to B2B vendors because we know that more information, especially up-to-date information, helps us make better decisions. This is as true in fraud prevention as it is in any other field, perhaps even more now that large-scale data breaches and increasingly sophisticated criminal practices have made it easier for thieves to manipulate valid data to commit fraud. Here’s why online retailers who want to stop the rising tide of e-commerce fraud should look for data that’s properly contextualized and subject to regular feedback about its validity.

Three levels of data, three levels of usefulness

Rafael Lourenco

Rafael Lourenco

In general, there are three levels of data sources available to businesses for use in marketing research: demographics, fraud prevention, and other business processes. Each level has its own limits of usefulness.

At the first level, the database is a straightforward collection of a type of data point, such as names, addresses, or phone numbers. Having a data point alone is simply a snapshot in time that shows, for instance, that a particular email address existed a certain number of months ago, but not what billing address or phone number were used with that email address in a valid online transaction. In these databases data points are relatively static, free of context, and only move in one direction—from the data provider to the business client. There’s no feedback from client to provider about the validity of the data, so it’s impossible to be certain that all the data is valid.

At the second data-source level, the provider adds context for multiple related data points. For example, a hotel chain sells data that includes guest emails, phone numbers, and billing addresses. The chain validates the data through its reservations process to ensure that the customer’s email and phone number are related. This is more helpful than simply knowing that the email and phone number exist.  However, the information is still only moving from data source to business client. The lack of feedback leaves a knowledge gap that fraudsters can exploit, and it precludes total reliability for users. For example, by making a booking with the email and phone data at the hotel chain and adding new payment information, criminals can set up the valid email and phone data for use in future fraud with stolen credit card numbers.

At the third level of data source, providers find out whether the data is fraudulent or valid—for example, do account bills go unpaid or are they paid without fraud claims? In cases of verified fraud, the data providers know how all the multiple data points (such as card number, billing address, email address, and phone number) are associated and they can determine how that combination of data was exploited to commit fraud. Most important, data providers at this level know when the data has not been associated with fraud and is reliable. With this two-way flow of information from source to client and back, the data not only has context, but it’s constantly evolving as it is used. This makes it a much stronger and more reliable resource.

Evolving data context matters more and more

These different data-quality levels matter to all businesses, especially for fraud-prevention use cases. That’s because while a one-percent data error rate in marketing databases results in misdirected mail or email advertising, a one-percent rate of completed fraud in e-commerce is a big problem in terms of revenue loss, product loss, and chargeback ratios. A contextualized, evolving data source that shares information in both directions with clients is a much more reliable tool for spotting fraudulent orders.

That’s likely to be even more true in the future because consumer data breaches are fueling a gap in database quality. Consider the Equifax breach that exposed personal information for some 145 million North American consumers last summer. That story has faded from the headlines, but the stolen data could be used by fraudsters for years to come—especially Social Security numbers, which are virtually impossible to change. How will such breaches affect data source quality?

At the first and second levels, fraudsters can use stolen data to affect single-data-point and one-way data sources. For example, thieves can link stolen billing addresses to their own mobile numbers. Over time, as more breaches occur, more thieves corrupt the data and the data information remains one-way so databases at levels one and two will deteriorate cumulatively over time. Meanwhile, the level three data sources are sharing information in two directions to validate their data over time. Ongoing quality maintenance by third-level data sources plus the declining quality of the other two types of data sources will result in greater differences in reliability for end users, especially fraud-prevention programs.

What does all of this mean for online merchants who want to protect their businesses from fraud? High quality consumer data situated in context and continually validated by two-way communication is a key to successful fraud prevention. As thieves become more sophisticated about corrupting valid data, and as more corruptible data falls into the hands of criminals, data providers and end users must share information to maintain data quality and usefulness.


Subscription boom: Lockdown subscribers to boost long-term customer retention, new study reveals



Subscription boom: Lockdown subscribers to boost long-term customer retention, new study reveals 1
  • 37% British adults signed up to at least one new subscription service in lockdown
  • 3 out of 4 consumers intend to continue their subscriptions post-lockdown
  • Five key audiences identified for subscription brands

New research by independent media agency The Kite Factory and YouGov finds almost 2 in 5 (37 percent) UK consumers signed up to at least one new subscription service during lockdown (since 23rd March 2020). And the prolonged lockdown measures are driving consumer loyalty with nearly three quarters of new subscribers (72%) likely to continue. According to YouGov, consumers who are signed up to physical subscription boxes jumped from 7.9m to 8.2m (+3.3%) from Feb to Oct 2020. The largest growth was in those over 55 up 74% from 590k to 1 million. The nationally representative survey of 2,141 consumers revealed that video streaming services were most popular across all demographics with three in five consumers signing-up to a new video streaming service since lockdown.

Noticeable differences in purchasing behaviours were identified between generations with 18-24s the most likely to sign up to a music streaming service (41 percent) and 25-34s twice as likely to sign up to fitness, health and wellbeing services. Newspapers and magazines proved most popular with over 55s. Those who signed up to magazines and music streaming services were much more likely to continue subscribing than those that signed up to services such as food & drink boxes or education services such as online language schools. And pet owners who love the newfound convenience of pet food subscription services resulted in none of them (0%) saying they would be very likely to cancel in the next six months.

James Smith, Managing Director, The Kite Factory said: “These findings are hugely encouraging for brands already offering subscription services and may offer hope to those that are considering it. The second lockdown will be another huge challenge for the retail and hospitality sectors but offering a subscription service could help mitigate losses by tapping into these audiences engaging in subscription culture. Our new insight into the different subscriber attitudes will help brands looking to dip their toe into subscription services better identify how best to reach them.”

The study identified five key subscription audiences:

Tech Savvy researchers:

Consisting of late millennials and early Gen-X, 46 percent are between 25 to 44 and over index for women aged 35-44. This group see technology as a benefit to the way they live and are often early adopters of new technology services and apps.

  • 11 percent signed up to an education service in lockdown and 61 percent signed up to an online video streaming service, both possibly linked to children staying home from school.
  • 42 percent say it is very likely they will continue subscribing in the next six months.

Subscription stackers:

A younger, male audience aged 25-44, over indexing for males aged 25-34. Many are pre-family (70 percent without children) and household incomes average at around £40,000 a year. Two thirds prefer to buy things online rather than in-store and two in five are willing to pay more for luxury brands. This group are more into gaming and technology than sports. Many admit struggling to manage their personal finances and are likely to buy things on impulse. They’re comfortable living in minor debt. Many added one or two subscription services to their existing list with self-improvement on their agenda.

  • Eight percent signed up to educational and self-help services.
  • 40 percent say it is very likely they will keep subscribing over the next six months.

Subscription switchers:

A female audience living in middle income households predominantly outside of city centres. They value meaningful brands over luxury, and many signed up to several subscriptions in lockdown.

  • One in ten signed up to pet subscription products
  • 22 percent signed up to a new magazine subscription
  • This demographic is the most likely to say they will remain subscribed to their lockdown subscription for the next six months.

Financial Trackers:

The oldest demographic with 44 percent over 55 and 29 percent currently retired (although there are also a portion of full-time students that fall into this attitudinal segment). Most consider themselves financially secure and nearly all have a wary outlook on fraud – 97 percent regularly check their bank and credit card statements for suspicious activity. This group will switch brands for speed and convenience, and they are happy to pay more for good quality. They trialled food and drink boxes during lockdown and one in five signed up to a new magazine subscription.

  • The least loyal audience, six percent have already cancelled their lockdown subscription and a further five percent say it is very unlikely they will continue subscribing over the next six months.

Offer seekers:

This audience are looking for a short-term offer and will cancel any ongoing payments at full price. Made up of individuals with lower household incomes including students and low-income families, this audience is most likely to sign up to food and drink boxes such as Oddbox or Naked wines, music streaming, beauty, or grooming products. This audience signed up to the greatest number of subscriptions of all audiences and are hard to avoid for brands promoting free trials or discounts as they pride themselves on their ability to seek out offers online.

  • Two in three (68 percent said they would continue subscribing to their lockdown subscription over the next six months.
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Accurate forecasting is vital for supply chains in the COVID-19 era and beyond



Accurate forecasting is vital for supply chains in the COVID-19 era and beyond 2

By Andrew Butt, co-founder and CEO of Enable,  a modern, cloud-based software solution for B2B rebate management.

All companies have to know how to prepare for an uncertain future – from shifts in the market and consumer behavior to the possibility of reduced revenue or increased overhead, it’s often necessary to adapt to changing circumstances as quickly as possible. This is particularly true when companies are attempting to navigate the economic consequences of a once-in-a-lifetime pandemic. If a company doesn’t have robust forecasting tools, it will continually be forced to respond to new developments and crises in a reactive instead of proactive way.

Forecasting is especially important for the management of rebate contracts, which are typically negotiated on the basis of last year’s performance and expected growth. This presents a significant problem for companies that aren’t capable of accurately predicting supply and demand or how other shifts in economic conditions will affect their business. This problem is even more serious in the COVID-19 era, which has thrown existing projections about consumer spending patterns and the state of the economy into disarray.

COVID-19 has been a stark reminder that rigorous forecasting is vital for negotiating rebates, facilitating alignment between manufacturers and distributors, and planning for the future in many other ways. However, despite the existence of increasingly powerful and accessible digital forecasting resources, many companies are still relying on antiquated methods to anticipate and prepare for the future.

The forecasting status quo isn’t working for many companies

Consumer behavior drives supply chains – when distributors submit an order to manufacturers, they do so based upon predictions about what volume of products and materials they need to satisfy demand. This is why it’s striking that, according to survey data from EY, only 20 percent of consumer products companies are “confident they can rapidly align their supply chain activity with changes in demand.”

At a time when 94 percent of Fortune 1,000 companies are experiencing supply chain disruptions due to the economic consequences of COVID-19, the ability to identify which adjustments are necessary to avoid costly inefficiencies and missed opportunities is paramount. However, too many companies are trying to make predictions with a limited set of tools. They’re using simple linear extrapolations which don’t take into account seasonality and other fluctuations (much less the effects of a crisis like COVID-19); many of their forecasting efforts are manual, which means they’re subject to human error (they also use up valuable human capital); and they’re not updated with the latest industry data or other relevant information.

But all these problems are solvable. Companies have never had more access to digital platforms that can help them collect and analyze the data necessary to generate detailed forecasts and align their production and distribution processes with the market.

Why forecasting is necessary for rebate negotiations

When a merchant or other distributor purchases products from a supplier, it’s important to determine which goods will be required in which locations and quantities. Rebates are retrospective payments that help buyers and sellers align their transactions with each others’ objectives – i.e., if a buyer purchases the seller’s target quantity, the seller can provide additional rebate as a bonus. This incentivizes continued trading with a partner and ensures that neither party is wasting resources.

Andrew Butt

Andrew Butt

While this may sound like a simple concept, rebate negotiation and management can actually be quite complex. For example, some rebates are based on year-to-year revenue growth, in which certain forms of purchases are eligible and others aren’t. Other rebates are contingent on an array of other elements, such as product-specific incentives and the maintenance of certain margins, promotions, etc. In these cases, forecasting is essential to account for many different variables over time, which will allow buyers and sellers to sign agreements underpinned by accurate pricing calculations.

When rebate forecasting is systematized and data-driven, the chances of a dispute are much lower. And if a dispute does arise, there’s an audit trail that allows companies to resolve it more quickly and fairly. The ability to predict which rebate structures and pricing make the most sense doesn’t just strengthen relationships between suppliers and distributors – it increases margins and cash flow, allows companies to allocate human capital more productively, and ultimately leads to stronger and more sustainable growth.

Accurate forecasting in the COVID-19 era

As economies around the world saw massive contractions amid COVID-19, supply and demand across many industries and sectors swung wildly. An analysis from the U.S. Federal Reserve pointed out that the “massive lockdown of the economy represents a large negative demand shock” while “supply chains in a number of industries have been affected not only internationally, with international trade in general greatly reduced, but also domestically, resulting in price increases for many goods and services.”

It’s extremely difficult to negotiate and manage rebates amid this economic uncertainty, which makes it much likelier that anticipated rebate thresholds (and the attendant pricing tiers) won’t be met. This could lead to a lack of motivation from buyers, which would result in lost profits all around. For some product categories, however, the recovery will be surprisingly fast, which means sales will quickly outpace their thresholds and pricing tiers (thereby eliminating the incentive to make rebate deals in the first place).

To address these issues, suppliers and distributors should renegotiate their rebate agreements after considering several potential scenarios for the next few months (and for 2021 more broadly). This is where technology comes in – digital rebate management platforms don’t just provide the ability to compare multiple forecasts, but they also make the process of renegotiation (and adherence to the terms of a new deal) more streamlined.

COVID-19 has demonstrated how important it is for supply chains to become as data-driven and flexible as possible, and forecasting is an integral part of that process. We’ll never know exactly what the future holds, but we can come closer to predicting it than ever before.

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EU Commission sets out new intellectual property action plan affecting SEPs, patent pooling and EU design protection



EU Commission sets out new intellectual property action plan affecting SEPs, patent pooling and EU design protection 3

By Andrew White, Partner and UK & European patent attorney at intellectual property firm, Mathys & Squire

The EU Commission published a new intellectual property action plan.  The action plan, touted as “an intellectual property action plan to support the EU’s recovery and resilience” outlines possible future moves, noting that intangible assets are “the cornerstone of today’s economy”, with IPR-intensive industries generating 29.2% (63 million) of all jobs in the EU during the period 2014-2016, and contributing 45% of the total economic activity (GDP) in the EU worth €6 trillion.

The action plan also notes that the quality of patents granted in Europe is among the highest in the world, and that European innovators are frontrunners in green technologies, and leaders in specific digital technologies, such as connectivity technologies.  That being said, the action plan notes that while smart intellectual property (IP) strategies can act as a catalyst for growth, European innovators and creators often fail to grasp the benefits of IP.

The action plan indicates that the Commission is willing to take stronger measures to protect European IP, to increase IP protection amongst European SMEs and to help European companies capitalise on their inventions and creations.

Ambitiously, the action plan also notes that the EU aspires “to be a norm-setter, not a norm-taker” and is keen to seek ambitious IP chapters with high standards of protection in the context of Free Trade Agreements, to help promote a global level playing field.

Some of the key takeaways are noted below.

Unified Patent (UP)

The implementation of the Unified Patent is seen as a priority in the action plan, indicating that it will reduce fragmentation and complexity, and will reduce costs for participants, as well as bridging “the gap between the cost of patent protection in Europe when compared with the US, Japan and other countries”. The action plan also indicates that it will “foster investment in R&D and facilitate the transfer of knowledge across the Single Market”.

SEP licensing

With the introduction of 5G and beyond, the number of standard essential patents (SEPs), as well as the number of SEP holders and implementers, is increasing (for instance, there are over 95,000 unique patents and patent applications supporting 5G).  The action plan notes that many of the new players are not familiar with SEP licensing, but will need to enter into SEP arrangements, and that this is particularly challenging for smaller businesses.

One area that has garnered a lot of press attention recently relating to the licensing of SEPs, and in particular to businesses that are perhaps not as familiar with SEP licensing, is that of the automotive sector.  The action plan acknowledges this and notes that “although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEP licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems.”

To this end, the Commission is considering reforms to further “clarify and improve” the framework governing the declaration, licensing and enforcement of SEPs.  This includes potentially creating an independent system of third-party essentiality checks, and follows off the back of a pilot study for essentiality assessments of Standards Essential Patents and a landscape study of potentially essential patents disclosed to ETSI also published alongside the action plan.

Modernising EU design protection

The Commission has indicated that it wants to “modernise” EU design protection “to better reflect the important role design-intensive industries play in the EU economy”.  At present, the Commission is asking for stakeholder feedback on the options for future reform. Recent results of an EU evaluation show that the current legislation works well overall and is still broadly fit for purpose. However, the evaluation has also revealed a number of shortcomings, including the fact that design protection is not yet fully “adapted to the digital age” and lacks clarity and robustness in terms of eligible subject matter, scope of rights conferred and their limitations. The Commission also considers that it further involves partly outdated or overly complicated procedures, inappropriate fee levels and fee structure, lack of coherence of the procedural rules at Union and national level, and an incomplete single market for spare parts.

Updating the SPC system

While the Commission notes that, following an evaluation, the Supplementary Protection Certificate (SPC) framework finds that the EU SPC Regulations “appear to effectively support research on new active ingredient, and thus remain largely fit for purpose”, it believes the EU SPC regime could be strengthened to reduce red tape, improve legal certainty and reduce costs for business.  One option being touted is to introduce a centralised (‘unified’) grant procedure, under which a single application would be subjected to a single examination that, if positive, would result in the granting of national SPCs for each of the Member States designated in the application. The creation of a unitary SPC, complementing the future unitary patent, is listed as another option.

Patent pooling in times of crisis

The EU Commission notes how the pandemic has highlighted the importance of effective IP rules and tools to boost innovation and secure fast deployment of critical innovations and technologies, both in Europe and across the globe, but that it sees a need to improve the tools in place to cope with crisis situations. To this end, the action plan includes proposals to introduce possible mechanisms for rapid voluntary IP pooling and better coordination if compulsory licensing is to be used.

Increasing access for SMEs to IP protection and the introduction of an “IP voucher”

Andrew White

Andrew White

The action plan notes that only 9% of EU SMEs have registered IP rights.  It aims to help SMEs better manage their IP and improve their competitiveness by giving EU SMEs easier access to information and advice on IP. Through the EU’s public funding programmes and further rolled-out at a national level, EU SMEs will get financial aid to finance so-called IP scans (comprehensive, initial, strategic and professional advice on the added value of IP for the individual SME’s business), as well as certain costs related to IP filings.

This will happen through the implementation of an “IP voucher”, which is made available in co-operation with the EUIPO, providing co-funding of up to €1,500 for:

  • IP Scans: up to 75% of the cost and/or
  • registration of trade marks and design rights in the EU and its Member States: up to 50% of the application fees.

SMEs will be able to apply as of mid-January for the IP voucher, through a dedicated website. We understand that the voucher will be provided on a “first come first served” basis.

The action plan also indicates the EU Commission’s intention to make it easier for SMEs to leverage their IP when trying to get access to finance, and that this may be done for example through the use of IP valuations.

EU toolbox against counterfeiting

The EU commission notes that counterfeiting is still a major problem for European businesses and proposes that an “EU toolbox” is set up to set out a co-ordinated European approach on counterfeiting.  The goal of this EU toolbox should be to specify principles for how rights holders, intermediaries and law enforcement authorities should act, co-operate and share data.

AI and blockchain technologies

The action plan notes that in the current digital revolution, there needs to be a reflection on how and what is to be protected – perhaps a nod to the recent litigation we have seen regarding whether an AI can be considered as an inventor.  The action plan in particular notes that questions need to be answered as to whether, and what protection should be given to, products created with the help of AI technologies.  A distinction is made between inventions and creations generated with the help of AI and the ones solely created by AI.  The action plan notes that the EU Commission’s view is that AI systems should not be treated as authors or inventors, which is the approach taken by the EPO, but that harmonisation gaps and room for improvement remain and the EU Commission has indicated that it intends to engage in stakeholder discussions in this respect.


There is much to take in from the action plan, and we will closely monitor developments in all of the above areas to see what will be implemented and when.

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