This post was originally published on this site
This story was originally published on Modern Retail’s sibling publication, Digiday.
Whatever you do, don’t call Nike’s latest collection an NFT, web3 or crypto project.
It’s not that those descriptions are wrong per se. On the contrary they’re right in many ways. Nike did end the first digital sneaker drop on its web3 marketplace .Swoosh last week (May 16). The release of the digitized Air Force Ones are NFTs for all intents and purposes i.e. a digital thing someone can own.
And yet, that term — and the other two most commonly associated with it — were nowhere to be found on any of the marketing for the collection. Instead, Nike called the sneakers a series of “virtual creations.”
Sure, there’s an element of marketing hokiness to this moniker, but it’s also a nod to something more profound: the average consumer only cares about experience. They’re not interested in the underlying technology that makes this possible. And in this instance, they’re especially interested in the power of collective ownership.
Four virtual shoe designs from .Swoosh members were picked by Nike to be part of the sneaker drop. And Nike worked with those designers to bring their products to life in the marketplace. These digital products that were co-created with Nike customers and the brand were randomly scattered among the 100,000 so-called virtual creations that Nike had made available over the last week.
The designs were stored inside a digital version of a Nike sneaker box. Fans could buy one of two of those boxes — “Classic Remix or “New Wave” — each costed $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 could potentially use to export the digital sneaker to other platforms like 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 involvement with its latest sneaker drop over hard returns. In other words, it was a brand building play — an attempt to connect a group of people through content as opposed to finding smart ways to trick them into watching an ad individually.
“The company is not 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 instead of being skeptical about it.”
A cursory look at the .Swoosh site (Nike did not respond to a request for comment) makes that all too clear. Copy talks about how fans can create, collect, trade and more importantly show off their digital wares from the marketplace. Nike has also promised that fans will be able to access products, experiences, content and even more drops. Moreover, members will be able to work with others, compete in challenges as well as earn prizes.
Simply put, Nike’s is reaching 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 will get really interesting as fans self-select into other interest groups, whether those are Nike NFTs or partner NFTs,” said Toby Rush, co-founder and CEO of web3 platform Redeem. “Multiple brands engaging directly with consumers based on NFT media will unlock a new relationship model for everyone.”
Where this nets out remains to be seen. Nike is clearly in test and learn mode — and it looks set to last for a while longer. And yet, even at this early juncture, is building a platform through .Swoosh in which membership value to it can be quantified, codified and ultimately commercialized in a way that everything is transparent and immutable thanks to the marketplace being built on blockchain tech.
The idea of NFTs as media is still an early one. As in, it’s likely to be taken with a heavy dose of skepticism. But the idea is starting to pique the interest of a few marketers.
Take Starbucks, for instance. It has launched a tokenized loyalty program “Odyssey” where members can buy and sell their NFTs in a marketplace. However, like Nike, Starbucks doesn’t call them NFTs, it prefers “digital Journey 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 instead of being skeptical about it,” said Matthew Novogratz, co-founder and head of partnerships and business developments 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 drive revenue or a buzzword. Instead, NFTs are seen as a way to engage with consumers in a more meaningful way.”
Nike’s NFT play is a case in point: the company didn’t just sell digital sneakers, it also sowed the seeds of a community of fans who can interact with each other and with the brand in new and exciting ways, continued Novogratz.
Moves like this belie the skepticism toward NFTs among marketers. But as prevalent as it is, the skepticism will fade – everything always does.
In fact, there are signs of that happening already. Marketers are starting to be more thoughtful about NFT tech. Sports leagues, for example, use NFTs to sell digital collectibles, such as trading cards or video highlights. Or there are those artists who are using NFTs to sell their artwork, allowing them to sell directly to collectors without an intermediary and participating in downstream revenue.