The idea of spending thousands or even millions of dollars to buy “land” in a virtual world seems to become more and more common. We’ve seen significant investments in virtual land within the metaverse, in recent months. The company Exclusible, which offers a high-end NFT marketplace designed for luxury brands in the fashion industry, is a good example of this trend. Exclusible is the ultimate provider of a truly digital luxury experience in the new virtual world.
Nowadays, many companies testified their interest for the metaverse, and most of them are striving to be the first to reach the goal of developing their own through different platforms such as Decentraland, or SandBox.
Adidas, among other major brands, has made its first steps towards it lately, in 2021. December has been a crazy month for the German company as they have launched many initiatives in this regard. If you missed it, you’re in the right place to get a quick recap on what they did!
Adidas’ first steps into the Metaverse
Every new business strategy requires the company to structure its teams to reach its objectives. It’s even more important when you aim to join a new universe, surrounded by technologies that only a few people understand and struggle to conceptualize for now. To ensure a sustainable strategy, Adidas has formed a team dedicated to developing their new projects around the Metaverse.
Adidas Originals’ Vice President of Global Marketing and Communications, Erika Wykes-Sneyd, a San Francisco-based marketing specialist and former Google, Uber, and PayPal executive, has been leading the Adidas Metaverse taskforce since January 2021.
A few months later, the company laid the first stone of its project on November 22, 2021, buying 144 plots in The Sandbox for more than 400 ETH (which represents around $1.7 million). The Sandbox is a virtual Metaverse game where people can play, build, own, and monetize their virtual experiences.
Twitter Adidas Originals: https://twitter.com/adidasoriginals/status/1462873002350202882
Then, Adidas has partnered with a cryptocurrency industry powerhouse, to pursue its journey: Coinbase. The cryptocurrency exchange platform is one of the most popular platforms for crypto acquisition. Through this partnership, the German brand surprised the whole crypto community especially as the brand announced the partnership in a concise tweet, without giving any details: “We’ve partnered with Coinbase. Probably nothing.”
Twitter Adidas Originals: https://twitter.com/adidasoriginals/status/1463571957249630223
Coinbase replied with that popular crypto community phrase “gm” (short for good morning), and tagged Adidas Originals, writing, “Welcome aboard, partner!”.
At this stage, neither Coinbase nor Adidas have provided further information on this partnership, leaving many speculations open, the main one being the creation of a cryptocurrency payment system — only the future will tell us.
Following on from these two prominent efforts, Adidas has partnered with NFT communities on December 2, 2021. “The company is partnering with prominent figures in the space including the Bored Ape Yacht Club founder, Pixel Vault’s NFT comics Punks Comic, and crypto investor and NFT collector Gmoney”.
Business Insider: https://markets.businessinsider.com/news/currencies/metaverse-adidas-bored-ape-yacht-club-nft-punks-comic-gmoney-2021-12
Andrea Nieto — Senior Designer Future, Adidas, commented on the collaboration: “We always seek to be community first, born from culture, and to do what Originals do. That is what led us to gmoney, Pixel Vault and the Bored Apes Yacht Club. You can’t say you’re doing stuff with a community if you just partner up with one person. So, it had to be more than one, which makes this a lot more beautiful, but also more complex.”
These new partnerships have resulted in the creation of a limited digital collectible, launched on December 16th, 2021, through the sale of non-fungible tokens (NFT), called “Into the metaverse”.
Adidas Originals: https://news.adidas.com/originals/into-the-metaverse--how-we-got-here-and-where-we-are-headed/s/6ccb61cb-2135-453e-8626-ac3d56faab30
The acquisition of these NFTs will allow people to access premium experiences within The SandBox but also to a physical offer (IRL: In real life) in November 2022. “NFT holders unlock exclusive access to in-virtual land experiences and free collaborative merchandise throughout 2022, including a graphic hoodie and a co-branded AdiColor Firebird tracksuit, as featured in PUNKS Comic”.
By stepping back and looking at a broader perspective, there are a lot of opportunities here for Adidas, as streetwear enthusiasts are already used to competing to get limited-run product drops. The “Into the Metaverse” NFT series just offers a new (and potentially even more exclusive) way to offer those kinds of drops, and Adidas’ story continues to confirm this hype for limited product acquisition.
Indeed, the entire Adidas Originals Into the Metaverse NFT collection has sold out within minutes of its public launch. A total of 30,000 Adidas Originals NFTs were put up for grabs, minted on the Ethereum blockchain, of which 20,000 were offered for the first time to NFT Pixel Vault, Bored Ape or Mutant Ape holders, and gmoney or Adidas Originals POAP holders.
Based on the quick sales of the first collection, it seems unlikely that this will be the last collection, considering that the German company earned more than $22 million from the sales: “Each NFT cost 0.2 ETH, which currently equates to about $765, and the company sold 29,620 NFTs (“Adidas and partners’’ held onto 380 for “future events”), meaning the company earned more than $22 million from the sales in the span of an afternoon.”
The Verge: https://www.theverge.com/2021/12/17/22843104/adidas-nfts-metaverse-sold-bored-ape
The Metaverse: a land of opportunity for brands
Let us put this in context. We’ve focused on Adidas’ move into the metaverse, but in reality, it’s not the only brand that aims to join this new land of opportunity.
Indeed, Nike has also taken a step further into the metaverse. In a statement published on Monday, December 13, 2021, the American giant announced the acquisition of the start-up RTFKT. Founded in 2020, this studio specializes in the creation of virtual sneakers in the form of non-fungible tokens. By acquiring RTFKT, Nike is looking to design sneakers and apparel that will be tailored for the metaverse.
Nike official statement: https://news.nike.com/news/nike-acquires-rtfkt
And, this is not Nike’s first move into virtual worlds. In November 2021, the sports manufacturer opened NIKELAND, a virtual space dedicated to the brand, in collaboration with Roblox, a global platform that brings people together through play. The American brand went further as they launched a digital showroom to outfit NIKELAND avatars with special Nike products.
From a wider perspective, other fashion brands have stated their interest to reach these digital worlds.
Balenciaga, a French fashion and luxury company, announced in early 2021 the launch of a metaverse business unit to explore opportunities for marketing and commerce. Virtual fashion has become a focus for Balenciaga, which released its Fall 2021 collection via a video game and collaborated with gaming platform Fortnite on a collection of digital skins for players. We could also mention Dolce & Gabbana, which sold at auction a collection of nine pieces of digital NFTs, as well as actual sewing for a total of 1,885.719 Ether, the equivalent of nearly $5.7 million.
As we can clearly observe, many actors are now looking to enter into the Metaverse, but it is important to embrace the trend with a real strategy. Brands need to take the time to think about the benefits for both their business and their end customers. They need to hire the right people and first build a qualified team that really understands the issues of it. Then, it is all about the value that you can create to your customer through the metaverse and NFTs.
Janet Balis, Partner, Marketing Practice Leader — Business Transformation at EY Consulting wrote an article in Harvard Business Review to draw a kind of first steps plan. According to her, it’s important to:
- Pick targets: Who are your target demographics, and what behaviors are trending with your current and prospective consumers right now?
- Watch Competition: What peer companies do things in the metaverse? Are these projects exciting to you? Did you take part to these?
- Look for applications: Is the metaverse giving you opportunities as a company to accelerate your purpose or long-term goals? What can you pilot in the metaverse that allows you to test new approaches to serving your customers?
- Plan your entrance: What tests could they put in place to enable you to get your brand exposed to the metaverse comfortably?
As the Metaverse is opening up a wide range of possibilities in terms of creativity and storytelling, Brands should follow carefully established action plans in order to create rewarding experience that really brings value. NFTs and parcels in digital universes such as Decentraland or Sandbox are not just a new way to develop additional revenue streams. It should serve your brand and reinforce your community around what you can offer.
How Brands Can Enter the Metaverse:
Coming back to Adidas, the end of 2021 was certainly the beginning of a new era. Having partnered with many top players in the NFT/Metaverse industry, Adidas reaffirmed its desire to be best positioned when new trends are showing off. Closely attended by its long-time rival, Nike, the two giants want to get closer to young consumers by moving into their own universe.
The 3-banded brand’s activities will be something to keep an eye on as we enter 2022, as physical products, associated with these NFTs, will be available to owners. Especially since, NFT holders unlock exclusive access to in-virtual land experiences and free collaborative merchandise throughout 2022.
We are only at the beginning of the commercial and societal possibilities that the Metaverse can offer to fashion brands such as Adidas or Nike, considering the other industries that are already active in this world. It is quite conceivable to imagine a world where the collectors of sneakers would no longer exhibit their collections on social networks, but in a space dedicated to them within the Adidas universe.
Harvard Business Review: https://hbr.org/2022/01/how-brands-can-enter-the-metaverse
