Flash: Nike's Web3 Update
Flash: Nike's Web3 Update
Nike just released its plans for what’s next for its Web3 platform ".SWOOSH". Here’s a summary of the updates along with the strategic take-aways.
Hey, it’s Marc. ✌️ Last Friday, Nike revealed major updates to its Web3 strategy. Today we’ll take a short look at:
.SWOOSH year 1 recap
.SWOOSH updates
Strategic highlights
Ready? Let’s dive in!
⏱️ Reading time: 3 min
.SWOOSH: First Year Recap
What’s “.SWOOSH”? If you haven’t heard about this, I suggest you to read my in-depth case study.
Briefly, .SWOOSH is Nike's blockchain platform launched in November 2022. It's a space for digital community building, co-creation, and virtual products.
Key features:
To join, users need a SWOOSH ID, a non-transferable NFT. 379,095 ID’s have been minted so far.
In January 2023, Nike introduced the Your Force One contest, inviting members to design virtual sneakers.
Throughout 2023, Nike engaged its community through workshops, a signature collection (“OurForce 1”), and its first Fortnite game world called "Airphoria."
They also offered physical products, like the limited edition TINJA sneaker, exclusively to active .SWOOSH members.
Zooming out: For Nike, this first year was all about experimenting with different engagement formats and blending digital and physical while staying true to its brand legacy.
.SWOOSH Updates
Nike’s most recent update reveals what they’ve learned in the first year. Here’s are the key updates:
In-game wearables: Launch of Nike in-game wearables tied to unlocks of physical apparel and footwear. Note: These wearables aren’t blockchain based, but locked into the platform they’re purchased in.
Physical products: More exclusive physical products and offers for .SWOOSH members.
Transferability: Users can now move collectibles to their wallets for trading on external marketplaces. Nike won’t build its own marketplace.
These updates provide a give a glimpse Nike’s Web3 strategy and come amidst Nike's recent $450m restructuring announcement.
Strategic Highlights
Four things of this announcement are notable:
Offline, online, and on-chain: With in-game wearables, we’re witnessing convergence between
different virtual worlds and platforms (blockchain based or not)
Web3, gaming and brands
offline, online and on-chain.
Control of assets: A major brand like Nike embracing the Web3 ethos of asset ownership and transferability is significant.
Own vs third party infrastructure: Nike's decision to not build its own marketplace, unlike Starbucks1, is a leaner approach for now, but comes with drawbacks:
Less control over the brand & user experience
Lower margins as royalty fees can’t be enforced
Beyond collectibles: Nike understands that next-gen consumers are all about self-expression – whether these assets are blockchain based or not. I can’t highlight this enough:
70% of Fortnite players said they’d bought special outfits and characters – for no in-game benefit other than looking cool.
In the latest Roblox study, 56% of Gen Z users now say styling their avatar is more important to them than styling themselves in the physical world
NFTs will continue to play an important role in a brand’s Web3 strategy, but they can’t stand alone.
Owning a brand’s virtual products will become a top-of-the-funnel gateway drug for next-gen consumers, who spend more time online to create, earn, and hold virtual assets.
We’re still early.
Talk soon,
– Marc
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Save the date: LinkedIn live session
I’ll host a 30min LinkedIn live session on “What’s Next for Web3 Loyalty”, tomorrow at 4pm UTC. Joining me is Tyler Moebius, CEO of SmartMedia Technologies (partner of Dematerialzd). They power Visa’s recently announced Web3 loyalty solution.
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Starbucks built a dedicated marketplace together with Nifty Gateway for their Odyssey members, integrated into the Odyssey web app.