Nike has a plan to take digital goods mainstream. Just don’t call them NFTs.

Nike has a plan to take digital goods mainstream.  Just don’t call them NFTs.

Since Nike launched .Swoosh, its first major web3 game under its own name, late last year, it has been signing up members, running contests and hosting events to educate people about the platform.

What it hasn’t done is throw around words like “crypto” and “NFT,” even though technically NFTs—as in unique assets logged onto a blockchain—are what the .Swoosh membership cards are. The same goes for the first collection of virtual products, a series of reimagined Air Force 1s called Our Force 1, which emphasizes the community aspect of the project, and will be released next month.

“Our approach around our virtual creations is above all to provide a sense of utility and utility, and not to be some speculative resource,” said Ron Faris, vice president and general manager of Nike Virtual Studios. “The underlying technology is what we find engaging to explain concepts like digital ownership, royalties for co-creation – that’s what we find exciting because it allows us to reshape our relationship with our members.”

Four Nike members who won an online challenge that involved submitting a creative brief will have their ideas turned into virtual products for which they will receive royalties. It’s a “Nike first and very exciting for us,” Faris said. The company does not disclose the royalty amount, but the co-creators will receive a financial payout.

Public interest in NFTs has waned since the bottom fell out of the crypto market at the end of 2021, yet a number of fashion companies have continued to invest in NFT projects. Gucci just signed a multi-year partnership with Yuga Labs, creator of Bored Ape Yacht Club. Typically, however, these efforts have focused on fan communities with 30,000 members or fewer, often with high price tags.

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Nike’s .Swoosh members already number around 330,000, according to Faris, and they’ve deliberately sought out crypto newbies as much as natives. The company held 15 .Swoosh events in various cities around the United States, in places like New Orleans and the South Bronx in New York that Faris said historically have been the last to receive new technology.

That makes Nike arguably one of the biggest forces driving new consumers into web3, even if it keeps the crypto part of it all in the background. Items from the new digital collection, for example, will cost $19.82 — a reference to the year of the Air Force 1’s debut — paid for by credit card, but not cryptocurrency.

There will still be distinctive web3 elements to release. On April 18, Nike will send free virtual posters to select .Swoosh members, who will then have first-time access to purchase the digital merchandise on May 8. A general access sale starts on 10 May. Shoppers won’t be purchasing a virtual sneaker, but rather our Force 1 box, which they’ll later be able to open to reveal one of more than 100,000 variations of the Air Force 1, including renditions of real AF1s the brand has released in over several decades, recently expanded for the digital world. In one example, the “Citrus” AF1 twists over a glass and fills it with fresh orange juice.

The shoes will all be displayed in a gallery, but buyers can also leave the boxes closed if they prefer, like collectors of toys in sealed packaging. Buying and selling won’t be an option at first to give users time to get to know the products and avoid users buying shoes to flip at high prices, though Nike plans to share more details about how members will be able to buy from each other in the summer.

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The virtual shoes will have different tools, such as access to physical products or experiences. Nike plans to make them portable in certain online games as well, and it will let owners download the underlying 3D files so they can customize their items. In this regard, Nike takes influence from RTFKT, the virtual product studio they acquired in 2021, which has encouraged its customers to learn 3D tools and get involved in the creation process.

However, Nike’s approach is meant to be beginner-friendly. Several of the previous AF1s were selected by Nike’s online community over the past few months in a series of tournament-like voting rounds. With its co-creation challenge, the company chose to have participants submit creative briefs with themes and color palettes rather than asking them to create virtual shoes because many of its members “don’t have access to the level of technology necessary to create 3D designs, Faris said. The company’s goal with the .Swoosh is to “democratize” that kind of access, he said, noting that the .Swoosh started with the AF1 as its canvas because it’s the company’s “most democratic shoe.”

It is also reportedly the brand’s best seller of all time. For such a large company as Nike, the world’s largest sneaker manufacturer, a niche project of a few thousand members is unlikely to move the sales needle. It benefits the brand to make its virtual products a mass game. While Faris said they’re still in a test-and-learn phase to see how customers engage with the digital goods, it’s clear Nike sees an opportunity worth exploring.

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“We believe there is a huge appetite for us to create this marketplace of the future that meets the consumer where they are across digital or physical worlds, harmonizing products, services and experiences,” Faris said. “As we learn more, we’ll see where that takes us.”

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