By the numbers, Nike is winning Web3, the somewhat vague next-generation internet that is fast becoming marketing department shorthand for “nonfungible token and metaverse strategy.”
It’s a sneaker-focused nonfungible token (NFT), sales are so far ahead of other brands that it’s not even a race. Its $185 million in sales is 60% more than the combined sales of the rest of the top 10 and 14 times higher than the NFT earnings of the No. 2 brand, fashion house Dolce & Gabbana.
See also: Walmart, Disney, Nike Push Further Into Metaverse
Those numbers from Dune Analytics are not just a matter of more sales. Nike racked up that total with 67,000 NFT sales, while No. 5 brand Adidas’ 50,000 sales brought in a little less than $11 million.
Nor is that the total extent of its digital wearables sales either. Nike’s highly successful metaverse home Nikeland is set in Roblox, an 18-year-old metaverse with more than 50 million daily active users that is not built on a blockchain and does not support NFTs. Roblox has its own fashion accessories sold for its in-game currency, robucks.
This leaves Nike in the unusual position of having NFT and metaverse presences that don’t overlap at first glance. But dig down deeper, though, and you’ll find that the two are fairly complementary.
They’re both ideal for a marketing-focused company like Nike, which can combine top-level sponsored athletes with a core product line that is highly collectible and encourages customers to buy multiple styles for both activity and style.
A Win for Team LeBron
A prime example of Nike’s use of the metaverse was its launch of a new flagship sneaker, the Nike LeBron 19, in February to coincide with NBA All-Star Week — where LA Laker legend LeBron James captained Team LeBron won the All-Star Game by three points.
A variety of LeBron 19’s — a fair number of them highly collectible limited editions — were made available not only in the real world but also in Nikeland and in another NFT-free gameworld, Epic Games’ burgeoning metaverse Fortnite, where “King James” in July joined its Icon Series of purchasable avatars — equipped, naturally, with LeBron 19s.
James himself made a live appearance in Nikeland during All-Star Week, doing tutorials and virtually meeting fans.
The ? @kingjames has arrived in NIKELAND on @roblox!
Hoop on his hometown court in Akron and earn an exclusive crown all while throwing down a dunk in the LeBron 19 'Chosen 1'.
Meet LeBron here: https://t.co/2iOJ4uyl85 pic.twitter.com/GoMRLosLk8
— Nike Basketball (@nikebasketball) February 17, 2022
Nikeland is both a store for virtual sneakers and other apparel, as well as a fairly sizable theme park with a variety of minigames such as trampoline tag and lava-floor parkour. But there’s also basketball, with dunking contests and LeBron James tutorials.
But mostly it’s a marketing tool and a very effective one.
“During NBA All-Star Week, LeBron visited NIKELAND on Roblox to inspire its community toward physical movement in play,” Nike President and CEO John Donahoe said during its March 21, 2002 earnings call. “On the NIKELAND court, LeBron coached and engaged with players, and participants were rewarded for physical gameplay with the ability to unlock virtual products.”
Noting that it had attracted 6.7 million visitors — a number that’s reportedly up to 21 million now — from 224 countries, Donohoe said “we plan to continue driving energy there with virtual products like LeBron 19 styles special to Roblox.”
RTFKT
A big part of Nike’s NFT strategy began last December when it bought NFT design studio RTFKT — pronounced “artifact” — which started in the blockchain-based metaverse Decentraland.
Big congratulations to @RTFKTstudios for joining the @Nike team! Checkout #RTFKT's original HQ in #Decentraland here!https://t.co/TH803mY7PD pic.twitter.com/N5EPd6u5Rr
— Decentraland (@decentraland) December 14, 2021
It has enough of a reputation on its own that Nike’s purchase made news in Women’s Wear Daily and Vogue Business.
RTFKT started out as a creator of NFT wearable focused on virtual sneakers, and within a few months of buying it, Nike Virtual Studios was launched. Donohoe said that in buying RTFKT, the company’s “vision is to take our best-in-class experiences in digital and build Web 3 products and experiences to scale this community.”
Read more: Nike Buys Digital Fashion, NFT Startup RTFKT
Earlier that month, RTFKT had collaborated with a well-known NFT artist, FEWOCiOUS, to create 600 pairs of custom Nike sneaker NFTs, which sold for $3.1 million in seven minutes.
And Nike keeps making money on them, as it has set the NFTs to collect royalties on all secondary sales.
Read also: NFT Royalty Payments: Potentially Game-Changing, Easily Bypassed
So, Nike’s used its massive marketing and celebrity endorsement machine to make the virtual merchandise providing marketing for the physical-world product, and vice versa — a virtuous circle. And one that, if the blockchain-based metaverse lives up to the hype, will continue to build.
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