The astonishing success of Nikeland showcases how a great strategy can lead to success.
This success comes down to –
- Product Fit – Nike is selling virtual equivalents of their footwear, which ties closely with their brand.
This is far better than a company hopping on a trend even though it does not affect them.
- Integration – Nikeland is a big part of Nike’s overall strategy, with a fully integrated campaign that works across all of their products.
- Consistency – Nikeland was not a one-shot-then-done campaign.
The metaverse has been supported for many months as part of a consistent activity and always be part of the conversation.
From this, it’s clear a well-done metaverse execution can attract a huge audience. To date, the entertainment industry has been the biggest beneficiary of that audience hunger, but the success of Nike demonstrates that brands are becoming more interested in having a presence in the metaverse ecosystem to increase opportunities, revenue, brand value, etc.
Nikeland, which is the sporting goods brand’s micro metaverse, has attracted 6.7 million people since its launch in November 2021. The space allows users to try on virtual products in addition to playing to the strengths of Roblox as a metaverse platform with games such as dodgeball.
On its Q3 earnings call, Nike’s CEO and President Jack Donahoe explained how the company has been driving consumers to it saying – “ During NBA All-Star Week, LeBron James visited Nikeland on Roblox to inspire its community towards physical movement in play. On the Nikeland court, LeBron coached and engaged with players, and participants were rewarded for physical gameplay with the ability to unlock virtual products. We plan to continue driving energy there with virtual products like LeBron 19 styles special to Roblox.”
Donahoe also noted that the key revenue strategy for Nike in the metaverse is branded NFTs. Nike has been among the first big brands to push the idea of virtual goods having value on parity with their real-world counterparts, in line with Burberry and some luxury manufacturers. It also adds some utility to the brand extension rather than just being a collectible for the sake of it, which is necessary to prevent NFTs simply becoming a fad.
It builds upon its creation of Nike Virtual Studios, following the brand’s acquisition of agency RTFKT in December last year. Donahoe said – “ With Nike Virtual Studios, our vision is to take our best-in-class experiences in digital and build web3 products and experiences to scale this community so that Nike and our members can create, share, and benefit together.“ In Q3, RTFKT released the first official Nike-branded NFT – its first step into the world of digital product creation.
Donahoe further indicated – “ We’re pleased by the positive momentum and energy we’re already seeing in the space and we’re excited by the future as we continue to extend our digital leadership in the industry. Nike Digital continues to be the fastest-growing component of its marketplace, now representing 26% of our total Nike Brand revenue.” As a result, and to capitalize on the growth across real-world and virtual products, the company said it had grown its ad spend by 20 % in the quarter, with the total now being $ 854 M.
April 5, 2022 CAIL Innovation commentary 905-940-9000 firstname.lastname@example.org www.cail.com/BI