Renowned for its iconic sportswear and athletic gear, Nike (NKE -0.66%) now has its sights set on leaving its mark on the digital world. In a recent announcement, Nike disclosed that, in early May, it will be releasing a series of non-fungible tokens (NFTs) on its own Web3 platform, known as .Swoosh.
Although technically the second launch of digital collectibles, this one differs from the original drop that Nike produced last spring. Nike appears to be making this launch more accessible to the average consumer with lower prices, a more equitable approach to minting, and prioritization of community engagement through the .Swoosh platform.
Nike enters the digital age
The new NFTs will be a collection of virtual renditions paying homage to the iconic Air Force 1 model and will utilize the Polygon (MATIC -0.00%) blockchain to process transactions. Referred to as Our Force 1 (OF1), these NFTs will only cost collectors $19.82, a nod to the year the shoe debuted.
Holders of new OF1’s will be able to earn exclusive perks and rewards in the form of physical merchandise or access to unique experiences sponsored by Nike. The collection also includes four designs created by .Swoosh community members as a way to increase collaboration with consumers.
The concept behind this new collection is in stark contrast to other brands that have minted NFTs in pursuit of a quick profit. Nike recognizes the growing trend of people “choosing to express themselves across physical and digital worlds” and wants to ensure that it is able to tap into this potential.
As such, the company is prioritizing the development of its .Swoosh platform to become the “marketplace of the future,” creating innovative digital-based relationships and exploring new ways to remove barriers of traditional physical products.
Pursuit of this new frontier signals that Nike is more than aware of the direction fashion and retail are headed. The company created its Virtual Studios division in Jan. 2022 solely dedicated to “deliver best-in-class Web3, Metaverse, and blockchain-based experiences.”
While the Virtual Studios division likely doesn’t add much to the company’s bottom line today, the foresight to jump into digital-based opportunities underscores Nike’s pursuit of innovation and its vision to remain a household name.
Nike’s progress in offering NFTs is a strategic move that will likely benefit the company in the long run. NFTs have gained immense popularity in the past couple years, and have already become a multi-billion dollar market. But even better, the industry is likely only in its infancy, as the collective value is expected to reach north of $230 billion by 2030.
The continued evolution of the company’s digital offerings and the development of its .Swoosh platform are things investors should keep an eye on in the future. While the Our Force 1 collection might have additional functionality and represent a new approach compared to Nike’s first NFT release, there are a near infinite amount of use cases that NFTs could be used for in the future. For example, the technology could be used to authenticate limited edition products, or even create virtual stores for consumers in the metaverse.
Nike’s early adoption of NFTs will enable the company to tap into a massive market of younger generations and more tech-savvy consumers. As a leader in the sports apparel industry, and armed with its iconic brand and designs, Nike is well-positioned to thrive in the NFT market and the future of retail.
RJ Fulton has positions in Polygon. The Motley Fool has positions in and recommends Nike and Polygon. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike. The Motley Fool has a disclosure policy.