How our thinking process led to a web3 revolution for Nike

tl;dr

After many years of delivering products to a high standard and establishing themselves as a household name, Nike’s consumer engagement was the highest it had ever been. They had a worldwide fandom at their fingertips and an ever-growing younger audience to accommodate. Still, this audience was demanding more.

As their success continued to skyrocket, demand surpassed supply, leaving them with a puzzling revenue challenge. How do you hit growing sales targets whilst having a limited amount of physical products able to be manufactured and sold? Plus, how can you leverage this audience and allow them to engage with Nike on a daily basis?

Landscape

At this time, there was no market for digital collectables, and NFTs weren’t a thing yet. Without a brief, our team had to pull on our experience in both technology and disruptive markets, as well as our knowledge of identifying emerging revenue streams.

As we planned out our approach, we knew we had to look at the landscape holistically to see where Nike could break out into a new space. From the very beginning, we worked to create a strategy that not only solved the above challenges but fundamentally shaped the future of Nike.

Culture driving revenue

Our initial research looked at what makes consumers buy and what drives these high levels of engagement. This led us to dive deeper into drop culture and what it meant for revenue. At this time, drop culture had already made a big splash in the global market; we knew how product drops and brand collaborations have become an unparalleled retail trend and a marketing and PR force to be reckoned with. But we learnt that it wasn’t always that way. Just a few decades ago, this term ‘product drop’ didn’t even exist. The same goes for collaborations between brands and influencers, let alone rappers and basketball players.

Drop culture in the sports and fitness industry quickly became associated with sneaker and streetwear culture, which had its own sub-communities, forums and jargon. Drop culture also lent itself to a specific audience that was just beginning to emerge, which was “the sneakerhead”, or a person obsessed with buying and, more importantly, collecting sneakers. This newfound fandom also birthed “the Hypebeast”, or someone who closely follows trends and acquires hyped products. This whole culture was almost unthinkable in the past, and it was starting to drive revenue in a way never before imagined.

These emerging audiences became the focus of our research and were where our biggest insights were derived from. The most illuminating aspect revolved around how this new audience demanded not only more engagement from Nike but also from other fans. This discovery allowed us to be confident that collectables and community needed to be at the heart of our strategy.

Where art meets technology

As we moved through phases of exploration, we came to creativity. In response to being limited by production, we wondered how much more imaginative you could be with Nike sneaker design if logistics were taken out of the equation. This space had the potential to be the intersection of where art meets technology. Our final strategy was shaping up and imagining sleek digital sneaker assets that could be collectable, tradable and combinable on the blockchain. This concept is now globally known as Cryptokicks.

The role of the creator

There was one more element to our thinking that came from the value we saw in these emerging audiences and that’s the role of the creator. We knew that in order to engage this audience in web3, we had to create omnidirectional relationships between Nike and the fandom. We envisioned a future where everyone could be a creator. Cryptokicks meant relinquishing control of the design and allowing the ‘fandem’ to create and customize their own sneakers, giving life to a new generation of creators who could sell and trade their digital creations within the community.

Our early thinking and initial strategy paved the way for Nike to enter the digital collectables market with Cryptokicks and .SWOOSH and position itself as an early adopter of web3, equipped with the tools needed to thrive in the next-gen advancements of the metaverse and beyond. However, our thinking didn't stop there. As a team, we continue to dream up new concepts and identify new areas for them to break into. With rehab as a trusted innovation partner, Nike is able to stay ahead of the curve.

Find out how you can stay ahead of the curve at rehabagency.ai.

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