Memo: CryptoKicks

The popularization of crypto wallets, NFTs, and marketplaces like OpenSea pried the door open to more interest in the metaverse. An NFT exists on the blockchain, uniquely representing a digital or real-life asset. It is common to see a social media user proudly showcasing their NFT as their preferred identity over their own likeness. Nike is betting that this will extend to how you want to represent online through your own apparel and accessories. Popularized over the pandemic, the convergence of the physical world and the digital world is being led by commerce as much as it is community. Nike has taken note:

Picture your digital twin rocking Nike sneakers and a tracksuit to a Microsoft Team meeting or Facebook’s — I mean, Meta’s — virtual rooms while you actually lounge on your sofa in pajamas and fuzzy socks. That’s the future Nike is imagining for itself. On Oct. 27, Nike filed over half a dozen trademarks with the US Patent and Trademark Office (USPTO), including those for its swoosh logo and slogan “Just Do It,” that reveal plans of making and selling virtual footwear and apparel. [1]

Two unrelated thoughts got me thinking about Nike’s potential future in Web3:

  • A potential DAO (Decentralized Autonomous Organization) built around its digital community with a tokenization that allows community to experience the upside in Nike’s Web3 pursuits in ways that traditional stock may be slow to reflect.
  • That active digital presence, in the same vein as the CryptoPunks or Bored Ape Yacht Club communities. It would be led by Nike executives and sponsored athletes where interactions resemble Jack Dorsey’s use of Twitter to build its legitimacy.

According to Cathy Hackl, CEO of Futures Intelligence Group, more brands and assets will follow Nike’s lead:

I think that something like what Nike is doing sends a big message to the market that this is not speculation, this is really where we’re going. And eventually, you’re gonna have to hire these leaders that can have the vision and that can lead the company in an informed way.

Nike, which is on track to pull in $50 billion in sales this year, has filed seven trademark applications that show intent to create and sell virtual goods including “footwear, clothing, headwear, eyewear, bags, sports bags, backpacks, sports equipment, art, toys and accessories for use online and in online virtual worlds.” With its swoosh logo and “Just Do It” tagline also part of the trademarks, Nike’s getting ahead of its own brand being used and co-opted by third parties in the metaverse. But it’s also planning on participating directly: the company is also planning to hire virtual material designers. The timing couldn’t be better:

Nike is at the forefront of a retail trend that will become the norm for other capable brands. As 2PM reported in July:

Every brand should have a digital supply chain or a set of components that, when properly constructed, equip a retail business with an important class of end products: content, first-party data, digital products, and community.

There’s few better positioned brands than Nike. To pioneer the marketing of goods inside the metaverse requires a patience, investment, and social capital that few other brands possess. It has a vast network of signed-on celebrity athletes to help drive appeal. Nike’s customers are loyal and engaged enough that sporting Nike sneakers in virtual spaces is a no-brainer. In the process, a new form of community and more accessible – albeit digital – products may begin to address Nike’s issues with its SNKRS app. Nike’s Global Vice President of SNKRS recently commented to Complex magazine on this issue:

We are at risk of losing our most sneaker-obsessed consumer. High heat, hype is ‘killing the culture’ and consumers are migrating towards New Balance and smaller, independent brands.

Many of these customers are currently left out of some of Nike’s most coveted drops, or only dream of actually securing a rare pair of Nike sneakers for themselves. The metaverse can be a solve for that by creating more demand, driving more purchases and making an unattainable purchase attainable in a new way for more people. Nike is not just ensuring control over its digital brand as Web3 spaces proliferate; it’s also creating entirely new revenue and marketing streams.

The adoption of Web3 principles will be gradual, but Nike has begun to lay the foundation by building up its direct-to-consumer business and investing in its own apps, trademarks, and intellectual properties, while reducing its dependence on traditional retail channels. Web3 and DTC are natural partners and Nike will be of the first major retailers to iterate around Web3 principles. It’s not just a new revenue stream: it’s community and status.

Who you are in digital spaces will become as important as who you are in real life, in a similar way Instagram followers have become a status symbol. Nike’s caught on because the company seems to understand that who you are is influenced by what you wear.

There’s no avoiding NFTs at this point. Every retailer with brand equity will strive to build its digital footprint for Web3’s version of the internet. The metaverse is no longer a far-off, futuristic concept, and where Nike goes – others follow.

By Web Smith | Editor: Hilary Milnes | Art: Christina Williams

 

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