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Nike is betting on a future of fashion that will not be made with threads but with pixels.
Last October, Nike filed seven trademark applications for virtual goods as they quietly prepared for the metaverse. By mid-December, Nike announced their acquisition of RTFKT (pronounced “artifact”), a digital shoe brand focused on virtual reality and NFTs. It is a move that signals to others in the industry that virtual fashion is no longer just a trend but is present and ready to expand.
Not a stranger to the virtual world, Nike had previously collaborated with online gaming platform Roblox and Fortnite in 2019 to release exclusive character skins. However, the new partnership with RTFKT cements Nike’s investment into the next evolution for fashion on Web3. Founded in 2020 by Benoit Pagotto, Chris Le and Steven Vasilev, RTFKT is a “creator-led organization” that uses blockchain authentication to create digital collectible sneakers, according to their website.
“This acquisition is another step that accelerates Nike’s digital transformation and allows us to serve athletes and creators at the intersection of sport, creativity, gaming and culture,” says John Donahoe, President and CEO of Nike. RTFKT found early success when one of their hybrid NFT/physical shoe collectibles with rising artist FEWOCiOUS was sold for $3.1 million. Now, Nike is hoping to leverage RTFKT’s technology to deliver a new level of social exclusivity and rarity for their collectibles.
The rising demand from users for a unique online presence is indicative of the rising popularity of the metaverse. Accordingly, digital fashion and NFTs play an important role in helping users curate their digital identities.
“We’re all heading towards working and living in different metaverses, or digital worlds, so as people care even more about their online presence, then digital fashion will become commonplace,” said Doddz, an augmented reality creator from the UK, in a series of interviews by Vice.
In response to this trend, many large fashion brands such as Gucci and Buffalo London have begun releasing virtual trainers. Their products, though, lack the technology to verify each asset in terms of its authenticity or chain of custody, which is crucial in the metaverse. What sets RTFKT’s products apart is that each of their digital assets are backed by a blockchain-based certificate of ownership in the form of an NFT. This is a huge game changer because owners can now collect, trade or sell their RTFKT products with the assurance that their royalties and transactions are secured. This enables a newfound ownership for consumers who can now access various types of sales engagement and digital interactions that come with NFTs on the new web.
Beyond the financial opportunities, major fashion players such as Nike are also compelled to adopt NFTs because of the values represented by Web3. The space has already attracted many creators, such as Australian digital fashion startup The Fabricant, who believes the future of digital fashion does not restrict gender, size or physical reality.
“Gen Z consumers see the metaverse as a way to live out their digital lives more fully [through] a series of interconnected, immersive worlds where users can maintain any identity they desire,” said Quynh Mai, founder of Gen Z-centric digital marketing consultancy.
Presently, retail and luxury consumption is evolving around a new generation of consumers who value “ethical consumption, inclusive communication, truth and transparency,” according to Forbes. As a result, the underlying methods of authentication with NFTs are well-positioned to offer a hybrid future for the digital expression of originality and transparency in fashion.
Gen Z views NFTs as extensions of the things that they already value online— their identities, their reputation and their most prized possessions. By embracing NFTs early on, Nike is aligning itself with the democratic and decentralized messaging of Web3, which is contrasted to the fashion world’s historic exclusivity.
Nike’s acquisition of RTFKT is just the beginning of a long line of corporate-backed projects looking to join the metaverse. RTFKT is a brand that was fully formed in the metaverse, much like a lot of independent digital fashion companies that are popping up due to the comparatively low barrier to entry in the NFTs scene.
The terms of the deal were not disclosed.
ABOUT THE WRITER
Ivy Tsang is a Tech Innovation Fellow at Identity Review from the University of Southern California, where she explores the intersections between the Arts, Technology and Business of Innovation.
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