Nike’s NFT sales make it one of the most profitable fashion brands in the digital world
When non-fungible tokens (also called NFTs) – essentially certificates for digital or physical assets – were first launched, big brands were applauded. They didn’t launch their own, entertain the trend of the time (now full-fledged industry) or rush to retrofit previous releases with crypto benefits. People knew there would be a Nike NFT one day, but when Nike initially showed hesitation, many wondered if the brand, and others of similar stature, would eventually go all in.
Then Nike started a series of acquisitions – NFT technology companies, other NFT manufacturers and so on and so forth. And while real-life apparel and footwear remains the giant’s main focus, NFTs seem to be paying off, even if most shoppers (myself included) remain skeptical.
Nike has earned $185.33 million in NFTs so far, beating out Gucci, Tiffany, Dolce & Gabbana and Adidas for the top spot on a new list of Noah Levine ranking of the place’s highest incomes. Dolce & Gabbana ($25.65 million) was second; Tiffany ($12.62 million) was third; and Gucci ($11.56 million) and Adidas ($10.95 million) claimed fourth and fifth, respectively.
But these brands don’t make NFTs for the money… even though they make a lot of money from them.
Remember, $185.33 million is just 0.3% of Nike’s total annual revenue. As such, the money Nike, for example, makes, is not the primary incentive to continue creating or at least promoting NFTs (which are often digital sneakers or apparel). Samuel van Deth, says Marketing Strategy Director at Oracle for the markets in Europe, the Middle East and Asia. “I would argue that’s not the most important metric … the impact on overall brand awareness, engagement, loyalty and customer lifetime revenue are probably the biggest reasons brands invest here.”
Not only are Nike, Tiffany, Gucci and Dolce & Gabbana technically early adopters, especially if the NFT/crypto market starts growing again like it was in 2021, but they are seeing incredible gains in NFTs as a marketing tool. Nike recorded nearly 68,000 secondary transactions from its NFTs, totaling more than $1.2 billion in secondary volume. Here, this means that someone searched with the intention of buying a Nike NFT, but ended up with Nike socks or a Nike T-shirt instead. For scale, Adidas, which claimed second place behind Nike, did not even reach the secondary volume that Nike made from NFTs.
So far, it looks like Nike will remain one of the biggest brands ever, even as we transition from real life to the digital world. However, whether it can protect its IP remains to be seen.
