Is .SWOOSH The Future of NFTs?
Going Deep on Nike’s Attempt To Onboard The Masses
Welp, happy June everyone. A giant blast of positive news has hit the web3 universe this week but you might’ve missed it with all the other stuff going on (Blackrock’s Bitcoin ETF, the BAYC price drops, whatever random Twitter beef people care about)...
It’s one of the largest NFT/metaverse announcements to date:
Nike has dropped a full-blown digital asset integration with Fortnite, having built “Airphoria” – a new Fortnite world where players can engage in a sneaker hunt to find a pair of Air Max 1 '86 Back Bling, wearable in-game.
On its own, this is a pretty cool marketing stunt. But as part of the launch, you could also connect your .SWOOSH account to “flex” and receive a separate soulbound NFT.
On the back of this news, we felt it was time to revisit what Nike is doing with .SWOOSH and digital collectibles.
A few weeks ago, we teed up the idea that the “Metaverse” may have been preemptively called dead by focusing on Adidias’ doubled-down efforts on virtual goods.
In that piece, we compared what they were doing to a few other brands, notably Nike.
We also teased the idea that Apple’s big upcoming announcement (which we now know was Apple Vision Pro) could factor into how seriously brands are taking the Metaverse.
And while the Apple Vision Pro may be ~very~ expensive, tethered to use at home, and a ways away from mainstream adoption, it’s a clear sign that wearable AR glasses are in our collective futures. Digital wearables are likely part of that experience.
But if that future is a few years away, how do you make digital wearables interesting now? How do you drive more people to care?
Nike is on the case & their new .Swoosh initiative is attempting to answer these questions.
Before we dive all the way in, let’s look at how Nike entered the space and what they learned:
NIKE + WEB3
Nike’s entry to point into the world of NFTs was loud and big. The company purchased web3 native studio RTFKT for an undisclosed sum back in December of 2021. The news sent shockwaves throughout a still nascent space, with the promise of big brands finally arriving. And while, in retrospect, it’s clear NFTs were in a massive bubble, the purchase made absolute sense.
At the time, RTFKT had a major hit on their hands with their CloneX PFP, a collab with renowned Japanese artist Takashi Murakami, which itself was a follow-up to a number of successful smaller mints. RTFKT lore claims that the RTFKT founders had dreamed of being acquired by Nike even when they first launched the company, dubbing themselves a “virtual sneaker brand” with early hits like the Fewo mint in March of 2021 that raised 3.1m dollars.
RTFKT was showing the world at large that there was an audience for NFT virtual goods and that there was a significant community that would form around them. And Nike, always a leader in technical and market innovation, saw an opportunity to enter the market with a significant leg up.
You probably already know the story of how RTFKT & CloneX has gone since then (big run up, significant dilution, letting down of holders, community revolt - same as 95% of other NFTs) but Nike has taken the learnings from RTFKT and have now established an entirely different NFT brand, something with a much broader appeal and aimed at a remarkably larger audience.
At its heart, .SWOOSH (and we apologize for how this name is going to look throughout this entire newsletter) is Nike’s plot to bring NFTs to the masses.
An entirely separate entity from RTFKT (with different management as well), .Swoosh is the ultimate dream project for everyone who’s wanted NFT-based digital fashion to matter… at least it seems that way on paper.
The plan when it launched was to hit on all of the following:
Digital Goods: The heart & soul of .Swoosh
Access: Product, Pre-orders and more!
Events: Tickets to special .Swoosh-exclusive events with Nike’s top roster of talent
Co-Creation: The opportunity to work with Nike themselves on digital goods
.SWOOSH was going to do things differently. It was going to start slow, taking their time to make sure their audience understood exactly what they were offering. This was about bringing the web3 product to an established sneaker head audience who may not be familiar at all with NFTs or, if they were, might have a negative association. This would be a delicate balance.
“We're not going to sell you anything right away. We're going to move into taking our time to educate.”
WHO IS RON FERIS + NIKE’S SNKRS APP
Before we go further, you should know a bit about Ron Faris and why Nike selected him to run the new .SWOOSH program.
Before Nike, Ron did a mix of marketing & product at Virgin, within Richard Branson’s Virgin Group. In 2013 he came up with, and then subsequently ran, Virgin Mega, a small digital studio within the larger entity dedicated to “fan communities and shopping on mobile phones”. Nike & Virgin Mega worked closely together on digital + physical experiences and Nike eventually purchased the small studio.
Ron then joined Nike and very early into his tenure was put in charge of their SNKRS app.
This platform was more than just an online store; it was a hub that not only provided an innovative shopping experience but also immersed users in the journey behind each shoe, showcasing in-depth stories and inspirations behind Nike's iconic designs.
SNKRS used a combination of raffles, known as "Draws," and first-come-first-serve releases, known as "Drops," to sell shoes. This made purchasing high-demand shoes exciting but also incredibly competitive. Often, with high traffic volumes during peak release times, there were occasions where the app experienced crashes and slowdowns, leading to frequent customer complaints. Oh and did we mention bots were an issue?
All this is to say that Ron has seen the harder side of trying to sell & market scarce digital assets. Ron even created a slide deck that got leaked around the problems with SNKRS. One of those slides said:
We are at risk of losing our most sneaker-obsessed consumer. High heat, hype is killing the culture and consumers are migrating towards New Balance and smaller, independent brands.