After Nike’s virtual sneaker drop, NFT cynicism gives way to intrigue among marketers
This story was originally published on Modern Retail’s sister publication, Digiday.
Whatever you do, don’t call Nike’s latest collection an NFT, web3 or crypto project.
It is not that these descriptions are wrong in themselves. On the contrary, they are right in many ways. Nike wrapped up the first digital sneaker drop on its web3 marketplace .Swoosh last week (May 16). The release of the digitized Air Force Ones are for all intents and purposes NFTs, i.e. a digital thing that anyone can own.
And yet that term – and the other two most commonly associated with it – was nowhere to be found in any of the marketing for the collection. Instead, Nike called the sneakers a series of “virtual creations.”
Sure, there’s an element of marketing hype to this designation, but it’s also a nod to something more profound: the average consumer only cares about experience. They are not interested in the underlying technology that makes this possible. And in this case, they are particularly interested in the power of collective ownership.
Four virtual shoe designs from .Swoosh members were picked by Nike to be part of the sneaker release. And Nike worked with these designers to bring their products to life in the marketplace. These digital products, which were created with Nike customers and the brand, were randomly scattered among the 100,000 so-called virtual creations that Nike had made available in the past week.
The designs were stored in a digital version of a Nike sneaker box. Fans could purchase one of two of these boxes – “Classic Remix or “New Wave” – each costing $19.82. And were only available to those who had an account on the .Swoosh site. Each box came with a 3D file that the owner can potentially use to export the digital sneaker to other platforms as a game, for example (if compatible) and more.
Between the low price point and the involvement of the Nike fanbase, it’s clear that the company has prioritized community engagement with its latest sneaker drop over hard returns. In other words, it was a branding effort – an attempt to connect a group of people through content as opposed to finding clever ways to trick them into seeing an ad individually.
“The company isn’t just selling digital sneakers, it’s creating a community of fans who can interact with each other and with the brand in new and cool ways,” said Anjali Young, co-founder of crypto community management tool Collab.Land. “Marketers are embracing NFTs as part of their marketing and sales strategy rather than being skeptical of it.”
A cursory glance at the .Swoosh site (Nike did not respond to a request for comment) makes that all too clear. Copy lecture on how fans can create, collect, exchange and more importantly display their digital goods from the market. Nike has also promised that fans will get access to products, experiences, content and even more drops. In addition, members will be able to work with others, compete in challenges and earn prizes.
Simply put, Nike’s reaches out to self-identified fans with token-gated content and exclusive experiences in NFT form. It is not “selling a jpeg” or appealing to speculators.
“It’s going to be really interesting as fans self-select into other interest groups, whether it’s Nike NFTs or partner NFTs,” said Toby Rush, co-founder and CEO of web3 platform Redeem. “More brands engaging directly with consumers based on NFT media will unlock a new relationship model for everyone.”
Where this turns out remains to be seen. Nike is clearly in test and learn mode – and it looks like it will be for a while longer. And yet, even at this early stage, building a platform through .Swoosh where the membership value for it can be quantified, codified and ultimately commercialized in a way that makes everything transparent and immutable thanks to the marketplace being built on blockchain technology.
The idea of NFTs as media is still early days. As in, it’s likely to be taken with a large dose of skepticism. But the idea is starting to pique the interest of a few marketers.
Take Starbucks, for example. It has launched a tokenized loyalty program “Odyssey” where members can buy and sell their NFTs on a marketplace. But like Nike, Starbucks doesn’t call them NFTs, preferring “digital travel stamps” — a nod to the fact that stamp collecting is a well-known and popular concept.
“Marketers are embracing NFTs as part of their marketing and sales strategy rather than being skeptical of it,” said Matthew Novogratz, co-founder and head of partnerships and business development at NFT specialist agency Candy Digital. “The biggest shift in how marketers think about NFTs is that they are no longer seen as just a way to generate revenue or a buzzword. Instead, NFTs are seen as a way to engage with consumers on a more meaningful way.”
Nike’s NFT game is one example: The company didn’t just sell digital sneakers, it also planted the seeds of a community of fans who can interact with each other and with the brand in new and exciting ways, Novogratz continued.
Moves like this dismiss the skepticism of NFTs among marketers. But as widespread as it is, skepticism will disappear – everything always does.
In fact, there are signs that it is already happening. Marketers are becoming more thoughtful about NFT technology. For example, sports leagues use NFTs to sell digital collectibles, such as trading cards or video highlights. Or there are those artists who use NFTs to sell their artwork, allowing them to sell directly to collectors without intermediaries and participate in downstream revenue.