The duel between Nike and Adidas returning to digital format
Do not be surprised if in the next few months you or a friend of yours find yourself buying a pair of digital shoes. Yeah, you got that right, it is not a typo because there are already plenty of people who have done it. That is, they have spent money on buying and other sportswear accessories that they will not be wearing themselves, as they are destined for their virtual avatar. Who is born, grows up and dresses in exclusive and expensive designer clothes. Like fashion-loving humans, even if it lives in a virtual world. Meta‘s plans for a new frontier have sent shares soaring, with Mark Zuckerberg announcing the company’s investment of more than $10 billion in 2021 alone for the Facebook Reality Labs division, which is responsible for creating the ‘parallel world’, the metaverse.
While waiting to see if and how the billions of users of Facebook, Instagram and other popular social networks will embrace the future reality, many brands from different sectors are moving to try to understand how to exploit the enormous potential of the new platform, where elements and trends such as gamification, NFT and e-commerce will intersect. According to a report by Morgan Stanley, social gaming could guarantee up to 20 billion dollars for the most famous fashion brands, while the turnover of Non-fungible tokens linked to luxury goods collections could reach 25 billion dollars. There is a lot of money at stake, so it is essential for all players to play it by ear in order to start spreading services and creating a community of fans around their brand.
With this in mind, as has been the case for years in physical stores, the duel between Nike and Adidas will return in the digital version, a different side of the same coin. Because the rise of the virtual world, be it the Facebook metaverse or other platforms, means being able to diversify the business and increase revenues. A need that is always valid for multinationals, even more so after a long period of crisis and health emergency, which has affected everyone indiscriminately, including the big sportswear brands. As a report by SafeBettingSites shows, during the first half of 2020 Nike, Adidas and Puma lost €7.3 billion in revenue due to Covid-19. Staying with the comparison between the American company based in Oregon and Europe’s most popular sportswear company with headquarters in Bavaria, it is interesting to analyse the different, somewhat opposite, approach to digital reality with NFT collections and virtual trainers for consumer avatars.
Fan community and exclusivity, the vision of the Adidas metaverse
Demand for these objects is also very high because, with the blockchain certifying the ownership of the digital goods in question, the mechanism of the desire to possess, linked to exclusivity, that triggers the purchase of a virtual garment is identical to the mental process that takes place upstream with the purchase of a real pair of shoes. Adidas wants to create a community of fans who, by purchasing virtual objects, can benefit from access to exclusive catalogues and physical accessories produced in limited editions. The first glimpse was given in recent weeks with the launch of Into The Metaverse, a collection of NFTs made in partnership with Bored Ape Yacht Club, Punks Comics and GMoney, some of the best known and most profitable companies specialising in the creation of NFTs. Each NFT was offered at a cost of 0.2 Ethereum, which at the time of writing is equivalent to 540 euros, bearing in mind that due to the volatile nature of cryptocurrency, the corresponding total figure in euros is subject to constant change. NFT purchasers will be able to proceed with the purchase of a hoodie and a special tracksuit that will be available this year.
The attempt exceeded all expectations, with the 30,000-piece collection sold out in a matter of hours, bringing more than €20 million into the company’s coffers (the figure refers to the value of Ethereum on the day of the sale).”The Metaverse is the place where everyone can express their most original ideas and most authentic selves, in whatever form they want,” said Tareq Nazlawy, Senior Director of Digital Growth at Adidas, adding that the company’s goal is to figure out what are the most innovative aspects to follow in the new space to engage the community. Perhaps surprised by the success and the speed with which it has occurred, but perhaps also to maintain a high level of attention and not risk burning out the interest in a short time, Adidas has not proposed other products, clarifying however that it has in store some other operation for the coming months.
Bringing talent in-house, how Nike wants to excel in the virtual world
Nike’s position is different: it has chosen to proceed by acquisition, investing money to bring in experts in the sector. The first step, however, was the launch of Nikeland on Roblox, a small digital sports town animated by players who compete in different games and disciplines, spending money to have their avatars wear suits, shoes, wristbands, glasses and equipment bearing the Swoosh. Then the company started projects that mixed the real and the virtual, such as a treasure hunt with the support of Snapchat lenses in New York’s most famous store. Shortly thereafter came the announcement of the acquisition of RTFKT, a young company specialising in the design and sale of digital trainers. “We have acquired a very talented team of creators that allows us to accelerate the digital transformation of the brand and serve athletes and creators who move between sport, creativity, play and culture,” said John Donahoe, CEO of the American company.
Founded in 2020 by Benoit Pagotto, Chris Le and Steven Vasilev, RTFKT has proven to be a pioneer in blending physical and digital values, riding on the hottest innovations in the virtual market such as Non Fungible-Token, Blockchain and augmented reality, to create unique digital products and experiences. Nike puts so much faith in the qualities of the creators that it combines RTFKT’s logo with the most famous fashion moustache and the symbols of Converse and Air Jordan in its images. Active in the past as a collective serving software houses and fashion houses, RTFKT was one of the first startups to emerge in the context of NFT and metaverse. Among the factors that have fostered its success are collaborations with internationally renowned artists such as Takashi Murakami, with the Clone X project achieving great visibility and total sales of more than $100 million. With these and other similar projects, RTFKT Studios has secured an $8 million funding round from Andreessen Horowitz in recent months. Now a new phase opens up for the startup, where it will have to play a leading role, allowing Nike to turbocharge the digital world in order to increase its real-world revenues.