The content of this Answer to Question 18 set forth below which describes the plans for Applicant’s registry constitutes the “purpose” of the registry as that term is used in Paragraph 1.b. of Specification 9 of the Draft New gTLD Registry Agreement found in Module 5 of the Applicant Guidebook dated January 11, 2012 (the “Purpose”). Applicant will publish its Charter and its policies, guidelines, and other supporting documentation related to the implementation of the registry consistent with the Purpose, all prior to launch. All second-level domain names registered by Grainger and its qualified subsidiaries and affiliates will be registered through an ICANN-accredited registrar and will be consistent with the Purpose.

The applied-for gTLD registry will be a standard, not a community-based, registry. The applied-for gTLD registry will be a standard registry open only to Applicant and its subsidiaries and affiliates or business partners. For the avoidance of doubt, the applied-for gTLD registry will be closed to registrants that do not have a formal, written trademark license agreement from Applicant specifically allowing the registration of a second-level domain name in the applied-for gTLD registry (the “Required License”). The applied-for gTLD registry will not be a community-based registry and there will be no market for second-level registrations outside of registrants that are affiliated with Applicant and⁄or that have the Required License.

W.W. Grainger, Inc. (“Grainger”) is a leader in the distribution of maintenance, repair, and operating (“MRO”) supplies and related information to the commercial, industrial, contractor, and institutional markets in North America. Grainger, in 2011, had net sales of nearly $8.1 billion, and operates over 700 branches across the globe. Grainger’s products can be purchased worldwide in branches and online. Grainger content is accessible in multiple TLDs, including the .COM gTLD and the .CN, .CA, and .MX ccTLDs.

Grainger has created a wholly owned subsidiary, Grainger Registry Services, LLC (“Grainger Registry”), as the entity to file this application and bring the .GRAINGER gTLD to market.

The intended future mission and Purpose of the .GRAINGER gTLD is to serve as a trusted, hierarchical, and intuitive namespace provided by Grainger and its qualified subsidiaries and affiliates for its business partners, customers and potential customers. Although ICANN has not specifically recognized a .BRAND gTLD specification in the current version of the Applicant Guidebook, the .GRAINGER gTLD is planned as a .BRAND gTLD, with the Purpose of protecting Grainger’s online presence and identity, expanding its marketing and promotion efforts, and providing a more secure channel for its online products, services, and information.

Grainger Registry intends to initially limit registration and use of domain names within the .GRAINGER gTLD to Grainger and its qualified subsidiaries and affiliates. This initial limited use will allow Grainger Registry to establish its operations and achieve full sustainability. This limited use, coupled with the other requirements set forth in Specification 9 of the template Registry Agreement, is intended to exempt Grainger Registry from any annual Code of Conduct Compliance requirements.

After Stage 3 (see below), Grainger Registry will evaluate whether opportunities exist to continue the sustainable operations of the registry through fee-based registrations to parties other than Grainger and its qualified subsidiaries and affiliates. All such parties would have the Required License in place prior to registration of any second level domain names.

Grainger Registry currently plans a four-stage rollout for the .GRAINGER gTLD:
  1. Stage 1
    The initial stage of implementation of the gTLD will involve Grainger registering a limited number of .GRAINGER second-level domain names.
    This initial use will provide Grainger’s IT and security personnel the time to run a number of tests to ensure seamless and secure access to the .GRAINGER gTLD domain names, interoperability with various software and Web-based applications, and unbroken and secure use of all names. This initial allocation will also allow the appropriate internal and external staff responsible for the delegation and setup phases of the .GRAINGER gTLD to ensure a proper transition from the initial delegation of the gTLD to full operation.
  2. Stage 2
    Once all testing has been successfully completed, Grainger Registry will begin allocating domain names in .GRAINGER to Grainger and its qualified subsidiaries and affiliates for more widespread corporate use. During this same period of time, Grainger will begin evaluating strategies to potentially migrate some traffic away from its current network of Grainger-related second-level domain names, which are registered in a variety of TLDs, to the .GRAINGER gTLD.
    It is also in Stage 2 that Grainger will evaluate expanding the operations of the gTLD to permit registration by other registrants such as licensees or strategic partners, all of whom would have the Required License in place prior to any second level registrations being issued to them. Should an assessment of its expansion strategy lead to a decision to extend registration rights to other parties having the Required License, the expansion would occur during Stage 3. However, any expansion would be conditioned upon a review of the Specification 9 (Registry Code of Conduct) set forth in the template Registry Agreement to ensure compliance with Grainger Registry’s business model.
  3. Stage 3
    Depending upon the analysis of the evaluations undertaken in Stage 2, Grainger Registry may begin to implement the migration of some Internet traffic away from the TLDs in which Grainger-related domain names are currently registered, and toward the new .GRAINGER gTLD.
    It is in this stage that Grainger Registry also may implement Grainger’s decision to extend registration rights to licensees or strategic parties having the Required License, depending upon compliance with Specification 9. The dates of such expansion are subject to change depending upon business, strategic, and industry factors.
  4. Stage 4
    Based on experiences gained through the first stages of operation, Grainger Registry and Grainger will assess whether the business plan and expansion strategy should be augmented by extending registration rights to a broader class of licensees, including potential customers of Grainger, each of whom would have to obtain the Required License prior to any second level domain names being registered to them.
    It is anticipated by Grainger that changes to the domain name industry, and particularly the impact of .BRAND gTLDs, will take at least five years to be realized and assessed. Any decision to expand the gTLDs beyond corporate, qualified subsidiary⁄affiliate, and licensee⁄partner use will take into account this experience as well as the technical analysis of potential expansion.
    Utilizing current projections based upon Grainger’s existing businesses, future business plans, current domain name portfolio, and other strategic factors, Grainger Registry estimates second-level domain name registrations to be in line with the projections set forth in the financial template provided in response to Question 46 of this application. In addition, Grainger Registry believes that the number of domain name registrations will be less than 10,000 in the first five years of operation.
    Ultimately, the potential use of the .GRAINGER gTLD by Grainger and its various business segments may also be driven by Grainger’s future business strategies.
Jovenet Consulting,
Aug 17, 2016, 8:57 AM