Just Do It: How Nike's Industry-Leading Web3 Strategy Marks a New Era for Consumer Brands
Just Do It: How Nike's Industry-Leading Web3 Strategy Marks a New Era for Consumer Brands
Nike continues to be the benchmark for consumer brands entering Web3. This is the definitive case study on Nike's Web3 strategy and how this marks a paradigm shift for co-creating brand culture.
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This is the definite case study of Nike’s Web3 strategy – and it is much more.
Nike would already be intriguing enough in its own right. At the same, Nike helps us to understand the sweeping changes at the intersection of culture, branding, communities and technology - changes that herald a new era for consumer brands.
So, why focus on Nike?
Nike has been a trailblazer among consumer brands that have started using Web3 tech to redefine their consumer relationships. “Nike has embedded itself into the fabric of Web3 culture before the competition has even taken off”, titled CoinDesk. And we know how so much in Web3 is about culture.
In April, Nike revealed its inaugural digital collection, named “OurForce 1” (OF1). This marks a new phase in its Web3 journey and a shift towards a wider consumer market. Described by Nike as a "tribute to our first 50 years, designed for the digital generation," the collection underlines the brand's continued evolution.
How did the leading Web3 consumer brand (just) do it? What can we learn from it? And what’s the big picture?
In this article, I’ll cover:
Understanding Nike’s culture, storytelling, and brand experience
Nike’s Web3 journey
Assessing Nike’s Web3 performance. For that, I’ll be using my Web3 community formula outlined here, among others.
The bottom line of Nike’s Web3 journey
The big picture (the 🥩 part of the discussion)
If you’re new to Web3 and the metaverse, I suggest starting here.
Ready? Let’s dive in!
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Understanding Nike’s culture, Storytelling, and Brand Experience
Nike is one of the most iconic brands in the world. It has achieved global recognition as a brand synonymous with performance, innovation, and style. With its timeless slogan "Just do it," Nike evokes a sense of aspiration and ambition, transcending the barriers of language, age, and culture. Nike succeeds in expanding its brand appeal to diverse audiences and subcultures with a perfect mix of impactful storytelling, cutting-edge innovation, and engaging brand experiences. It's an art that few have been able to replicate.
Creating and becoming part of culture has been a trend in branding spanning decades. Aleksija Vujicic from Multicoin Capital writes:
“As religion declined across the Western world, consumers began to seek meaning, identity, and belonging elsewhere – such as influencers, or more importantly, from brands. It was not enough for brands to merely be attached to a subculture—brands recognized the need to become culture.
Nike embodies this trend by integrating into everyday life, effectively becoming a part of culture itself.
A key factor in Nike's cultural impact lies in its strategic partnerships with influential individuals and brands, keeping brand at the forefront of cultural trends. From hip-hop collaborations with Drake, Wu-Tang, Jay-Z, Eminem, to partnerships in skateboarding with Paul Rodriguez, Stefan Janoski, and in e-sports with Jian Zihao, Nike consistently maintains cultural relevance.
Nike's entry into e-sports demonstrates its readiness to embrace new subcultures. As e-sports gathers momentum, it has cultivated a distinct subculture with dedicated fans, professional leagues, and a distinct style. In 2019, Nike became a four-year sponsor for China's League of Legends Pro League (LPL) and teamed up with Vodafone Giants to create a training regimen for e-sports athletes.
Doug Stephens explains how Nike crafts compelling cultural narratives:
For most brands, the product is very clearly the physical objects they sell: shoes, apparel and accessories. For Nike it’s something much bigger. It’s about powerful human ideas. When we buy Nike, we’re buying into a cultural story. It may be a story about social justice and equality. It may be a story about perseverance against the odds, as was the theme of their memorable Find Your Greatness campaign. Or it may be a story about the many failures we all (even legends like Michael Jordan) experience en route to victory.
And it’s not only culture.
In the past decade, Nike has followed a bold direct-to-consumer approach centered on content, community, and personalization. This included revamping its distribution strategy to eliminate wholesale.
This gave Nike greater control over the entire brand experience. And for Nike, the brand is everything. Business of Fashion notes:
By radically cutting back on its wholesale distribution and raising the bar for brand experience with the third-party partners that remained; expanding its focus on content, community and customisation to keep customers close; investing in its data analytics and logistics capabilities; and rethinking the role of the store as a brand stage, Nike drove a veritable direct-to-consumer revolution.
Nike stores became cultural hubs for the brand, inviting customers to immerse themselves and even design their own clothing. Doug Stephens writes:
With a deep focus on hands-on engagement and product customisation, Nike’s stores were no longer the well-lit, mini warehouses that most big box shoe stores had become. Instead, Nike was creating beautiful and dramatic stages upon which its powerful brand and product stories could be told. Customers across major cities could not only see the unique store experience but become part of it, engage in it, play and be inspired by it.
Inviting customers to co-create their products aligns with a larger trend over the last two decades: the growing influence of social media on brand culture.
With social media’s rise, communities became increasingly important for brands. Suddenly, brands could create culture with their consumers, and thus brand culture became co-created.
Over the last two decades, Nike has been a trailblazer in using the internet, social media and new tech to strengthen its relationships with consumers, both digitally and physically:
In 1999, Nike launched "Nike By You" (originally "NikeID"), a feature on its website that let customers design their own Air Force One shoes. Now, Nike By You includes over 100 in-store studios where customers can work with trained designers.
In 2006, Nike introduced Nike+ and the Nike Run Club, allowing users to track their runs and fitness activities on their iPods and iPhones. The platform has evolved into the Nike Run Club app, offering users fitness tracking, virtual challenges, and a connection to the global running community.
In 2015, Nike launched the SNKRS app, a platform dedicated to exclusive releases and previews of the brand's latest sneaker drops, allowing customers to get the newest shoes right from their devices.
In 2018, Nike bought Zodiac, a data analytics firm that predicts customer behavior and value, enhancing the brand's personalized marketing.
In 2018, the Nike app started bridging the gap between online shopping and physical stores. The app recognizes when users walk into a Nike store, providing them with information about available products and services and triggered rewards.
In 2019, Nike introduced "Nike Fit," a VR feature in the Nike app that helps users find the perfect shoe size.
Doug Stephens says:
Nike never viewed technology as simply another channel for transactions, but rather a means of creating an ongoing connection with their customers, while also connecting their customers to the community.
And then, Web3 came along.
Next-gen marketing for next-gen consumers? Let’s find out.
And then, Web3 came along
It was only a question of time until Nike discovered how Web3 could mark a fundamental progression of that trend. Digital ownership, enabled by blockchains, offered a way to augment the co-creation process to be more personalized and engaging. And reward the community in return.
This led Nike to be one of the first and most successful major brands to embrace Web3.
Let’s look at the milestones of this love story:
2019: Securing a patent for the blockchain-based CryptoKicks, a blockchain-based system that unites a physical product with an NFT (aka “Phygital”).
2021, November: Launch of Nikeland, a virtual experience in the online gaming platform Roblox1
2021, December: Acquisition of RTFKT, a Web3 studio for virtual sneakers, and launch of the CloneX NFT collection in partnership with Takashi Murakami. CloneX owners have commercial rights over their avatars, and a token-gated site was used to allow holders to download the 3D files.2
2022, February: RTFKT releases a co-branded Nike x RTFKT collection called “MNLTH” which was airdropped to Clone X holders alongside PodX virtual spaces.
2022, February: Start of the “.SWOOSH Community Collective”, a series of IRL events to collect and discuss feedback from the community. It looks like this.
2022, April: Launch of CryptoKicks together with RTFKT, a collection of 20’000 customizable sneaker NFTs for MNLTH holders. CryptoKicks can be customized with RTFKT Skin Vials. Skins can be equipped on a page that is token-gated for MNLTH holders.
2022, July: Launch of RTFKT x Nike AR Hoodie NFT for CloneX and CryptoKicks holders, a wearable with the option to forge a physical counterpart.
2022, August: Launch of a phygital fashion collection called Forging SZN 1 for CloneX holders. The dynamic drop allows users of specific Clone X NFTs to order merch that is tied to their avatar’s DNA. Wearables include hoodies, jackets, t-shirts, hats, socks, and sneakers.
2022, November: Launch of its Web3-enabled platform called .SWOOSH, on which users will be able be able to gain access to exclusive events, collaborate with Nike designers on virtual products, and even earn royalties from the sale of those products.
2022, November: Announcement of the first .SWOOSH collection called “OurForce 1” based on the timeless design of the original, physical Air Force 1. Start of the community curation phase.
2023, January: Announcement of .SWOOSH Studio, Nike’s vision for the future of virtual consumer engagement, including co-creation initiatives for which users are rewarded. Start of the Your Force One contest as the first co-creation event.
2023, April: Official launch of the “OurForce 1 Collection”.
2023, October: Nike announced its first physical sneaker called Air Force 1 Low “TINAJ”, which stands for “This is not a jpeg.” TINAJ will drop in November to .SWOOSH ID NFT holders who purchased and revealed an OurForce 1 box.
Quite a journey.
To understand Nike's Web3 strategy, it's useful to look at it in terms of what happened before .SWOOSH and what's happened since .SWOOSH was introduced.
Pre-.SWOOSH and post-.SWOOSH period
The pre-.SWOOSH era saw Nike's initial exploration into Web3, marked by the acquisition of RTFKT, a native Web3 studio. This step led to new collections and various experimental projects, mainly involving RTFKT/CryptoKicks and CloneX collections.
Just as in traditional markets, entering the Web3 involves two strategies: organic growth through independent development or inorganic growth through partnerships or acquisitions. The trend among the biggest brands appears to favor partnerships, as demonstrated by Nike with RTFKT, Adidas with Bored Ape Yacht Club (BAYC), and Gucci with Yuga Labs.
In this pre-.SWOOSH period, Nike operated without explicit ties to the parent brand, fostering experimentation and mainly engaging a niche group of Web3 users.
After years of exploration, Nike decided to integrate its Web3 initiatives more closely with its parent brand and core customer base. This was marked by the launch of the .SWOOSH Studio and the OurForce 1 collection.
.SWOOSH offers a glimpse of how a future Web3 enabled digital ecosystem of co-creation and co-ownership might look like.