Nike's .SWOOSH Is a Web3 Brand Playbook

I realize I write this practically every week but…THIS IS BIG.

Nike’s launch of its own web3-based marketplace for digital and physical creators has so much to unpack. This on the heels of Instagram’s NFT announcement last week and Starbucks’ foray into web3-based loyalty tokenization. (More on this here.)

.SWOOSH (pronounced ‘dot swoosh’) “is the home of Nike’s virtual creations.” According to the announcement, Nike virtual creations include “sneakers, apparel, accessories and other collectibles you can wear in games or other immersive experiences. Some Nike virtual creations will also unlock benefits for you in the physical world, like access to IRL products and exclusive events.”

.SWOOSH is not a site; rather, it is described as an experience powered by a community that acts together to build more experiences. These experiences will be virtual…and physical…and can be owned, shared, traded, sold, bought and used in interoperable ways across virtual worlds and projects.

After a few days to digest the Nike news, here are seven key takeaways for brands and agencies working to determine their own web3 playbooks (fyi, Platinum Balloon can help).

Community, Community, Community

This project depends on community participation, and it is set up for frictionless community co-creation. That means sharing the wealth – Nike plans to host creator challenges where winners can help Nike co-create a virtual product line and earn money from the sales of the line. In the future, .Swoosh could feature digital storefronts not only for top Nike athletes and collaborators, but also for regular users. As my colleague Thomas Pan points out, the key to a healthy community in web3 is ownership and empowerment. .SWOOSH seeks to become a marketplace that onboards, empowers and capitalizes hundreds of thousands of global creators...on web3 rails.

IRL Is Just As Important As URL

Nike virtual creations include sneakers, apparel, accessories and other collectibles you can wear in games or other immersive experiences. Some Nike virtual creations will also unlock benefits for you in the physical world, like tokenized access to IRL products and exclusive events. Digital sneakers and gear could be turned into real-life products as well, with the creators who worked on the designs benefitting financially and reputationally. It has also been noted that Nike might offer a preorder for a physical shoe in the form of a virtual one, available first on .SWOOSH.

Internalize the Capabilities, Externalize the Culture

.SWOOSH is the product of a new division at Nike called Nike Virtualk Studios. The division is a separate, entrepreneurial group with its own teams inside Nike tasked with translating the brand to the world of web3, NFTs, and the metaverse. At the same time, Nike taps into its network of designers, influencers, athletes and celebrities – as well as RTFKT, its digital wearables studio – to feed the .SWOOSH community with inspiration and audiences. When Nike bought RTFKT last year for a reported $100M, eyebrows were raised. Since the acquisition, Nike has already recouped $250M from secondary sales of virtual wearables designed, deployed and marketed by RTFKT.

Choose Your Partners Well

Instead of building, Nike has chosen to partner. .SWOOSH boasts best-in-class partners like the Polygon blockchain; Stripe and Bitgo for payments; and Syndicate and Moonpay for smart contract management and marketplace development. For NFT culture and hype, Nike has its acquisition RTFKT to lean into. Parenthetically, Polygon is becoming the go-to blockchain choice for brands; it already works with adidas, Starbucks, Meta, Reddit, Meta, Robinhood, eBay, Disney, Stripe and Adobe. One salient feature of Polygon is its relatively minimal environmental impact and its pledge to be carbon-neutral by the end of this year. This aligns well with the sustainability and ESG sensibilities of brands and their corporate stewards. Partnerships will matter after the virtual goods are created, too. The brand’s virtual products will eventually be available as wearables in video games, extending their reach. The brand has dabbled in this before, launching Air Jordans for Fortnite in 2019. Next year, Nike will announce new partners that allow wider applications for its virtual goods.

Education Is an Ongoing Priority

With RTFKT, Nike ingratiated the web3-savvy. With .SWOOSH, Nike seeks to ingratiate the web3-curious. The company knows that this will be a slow-build and that audiences will have a healthy suspicion of blockchain (recent crypto headlines have been brutal) and may not have the patience to learn something entirely new. Nike will be hosting host regular events online and IRL to help creators learn about virtual creations and how .SWOOSH works.

Live (and Expand) Your Brand Values in Web3

How cool is this (from the .SWOOSH website): “Nike is selecting the first wave of participants who’ll have access from three groups: its most engaged customers, those who live in cities that generally don’t get first access to new tech, and partners from its diversity, equity, and inclusion groups.” Web3 is an amazing place to find community and shared action around purpose; Nike is well-aware that access to .SWOOSH is just as important as the project itself.

Words Matter

There is no mention of NFTs, crypto, metaverse, blockchain, decentralization. wallets or any degen web3 jargon (LFG anyone!) anywhere on the .SWOOSH site. Instead, this web3 project is described as “a new community experience, designed to give you the opportunity to co-create the future of Nike.” Isn’t that so much better than “buy our NFTs” or “connect your wallet?”

.SWOOSH officially launches on Friday 11/18 and the first digital collection will be released in January 2023.