Inside Dot Swoosh, Nike’s big bet on Web3

The brand’s major investment could change the landscape of loyalty.
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Hannah Min

· 9 min read

On a Friday afternoon in February, near the end of a two-week stretch of Super Bowl bliss that turned bitter for the city of Philadelphia, a packed house of sneakerheads were momentarily distracted. The crowd at Lapstone and Hammer, a jawny Center City retailer of tasteful fits, had been given a passcode, one that would enroll them in the future of the world’s largest sportswear brand, they were told.

It was a code to enroll in Nike’s latest and highly anticipated bet on Web3, Dot Swoosh.

Nike unveiled Dot Swoosh in November, describing it as a “new, inclusive digital community and experience and a home for Nike virtual creations.” Exactly what that means is a little unclear, and the company kept things mostly under wraps at first (including rebuffing Morning Brew’s repeated requests for an interview).

That began changing late last year, as Nike set out on tour across the country, holding small workshops and seminars in sneaker stores, seeking to educate the fanbase on its Web3 ambitions.

In Philadelphia, the pitch was fuzzy—representatives weren’t so much spreading the gospel of Web3 as they were emphasizing restraint. Panelists used phrases like “taking it easy,” “methodical and intentional,” and “slow things down” when asked what a roadmap might look like. The Taco Bell NFT, this was not, at least not yet.

Despite the lack of detail, the brand’s ambitions are stark. “Just as Nike has been the conduit to sport, Dot Swoosh is going to be the conduit to Web3,” Iris Yen, head of marketing and community at Nike, told the crowd. “When we think about our mission here, it is onboarding the next millions of users to Web3.”

Sure. But it’s a gamble on a category that’s received more eye rolls than excitement, a hype cycle that’s given way to AI and chatbots. It’s a wager that makes Nike, a blue-chip brand if there ever was one, somewhat of a bellwether for Web3. If a company of its size and status can’t make Web3 work, then who can?

Setting up the shot

Nike has long held a certain elite status as a first mover in the worlds of sports and fashion. It appeared to jump headfirst into the deep end of Web3 in late 2021 with its purchase of digital design studio Rtfkt for an undisclosed sum. Rtfkt’s claim to fame is its creation of distinctive NFT sneakers and digital collectibles for virtual worlds. In both the retail and Web3 worlds, the acquisition was considered a turning point for the mainstreamization of this new era of the internet.

“If you have a leader in this space, it’s Nike,” Benoit Vatere, founder and CEO of mobile publishing company Mammoth Media, said. “There was a big shift with Rtfkt being acquired…they are bringing credibility which [Web3] didn’t have.”

Then Nike announced Dot Swoosh, further solidifying the brand’s Web3 curiosity beyond the purchase of Rtfkt.

Back in  2019, Nike filed an application for “cryptokicks,” for use in, among other things, “recorded and downloadable computer software for use as a cryptocurrency wallet.”

Around the same time it purchased Rtfkt, Nike filed no fewer than seven trademark applications for various logos and slogans for use in “virtual goods, namely, computer programs featuring footwear, clothing…art, toys, and accessories for use online and in online virtual worlds.” Late 2022 saw Nike file trademark applications for “Dot Swoosh,” “.Swoosh,” and the Dot Swoosh logo.

Translation? Nike is making NFTs.

Of course, Nike is far from the only sports apparel brand interested in the potential of Web3.

Adidas, for example, purchased a Bored Ape Yacht Club NFTs and then dropped its first NFT collection in late 2021. The brand followed up a year later with blockchain-based virtual wearables, which reimagined brand apparel for the metaverse. (The brand has made over $22 million in NFT sales.) Puma similarly announced a partnership with 10KTF, an NFT project that features digital collectibles from a fictional tailor.

But while other brands have seemingly leaned into the speculative world of crypto via NFT sales, Nike has shied away from it with Dot Swoosh, emphasizing community, cocreation, and education, and has yet to offer any digital goods for sale to beta members.

Nike’s soft launch of its Web3 aspirations (amid a…challenging…crypto market) may allow it to set the standard for the industry’s relationship with Web3, said Michael Miraflor, chief brand officer at VC firm Hannah Grey.

“I don’t think anyone thinks it’s guaranteed,” Miraflor told Morning Brew. “The downmarket is clouding everyone’s perception of what is valuable or not valuable in the Web3 landscape. But above all, I think the loyalty that people already have to Nike will overcome those immediate barriers of skepticism.”

Building a blueprint

Dot Swoosh arrived on the heels of another major retail brand’s Web3 debut: Starbucks’s Odyssey program.

What sets Nike and Starbucks apart from the Web3 experiments of their respective competitors is their focus on “solidifying a foundation” for Web3 architecture, where users can interact with a platform they’re familiar with and “still connect to Web3 in the capacity that is a little easier, a little more frictionless,” explained Chris Neff, global head of emerging experience and technology at the agency Anomaly.

Part of that pitch is largely ignoring the lexicon of Web3—nowhere on the Dot Swoosh site do the words “NFT” or “crypto” appear. That’s intentional. (“You’ve seen a lot of people move away from ‘NFT’ to ‘digital collectibles’ because NFTs have now become a dirty word,” Neff said.)

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That approach is readily apparent in Nike’s decision to eschew Discord, an instant-messaging platform favored by many Web3 communities, including Starbucks’s Odyssey. (“Discord is hard to use,” Nike’s Yen said.)

To be clear, the differences among Dot Swoosh, Rtfkt, and Nike’s other digital ventures are important. Nike has said that Rtfkt is a brand under the Nike umbrella, like the Jordan brand, but aimed at early adopters of Web3 technology with more of a “gamer mindset.”

Not to be confused, Nike itself has dropped NFT collections with Rtfkt, though again, these are distinct from its community-based approach with Dot Swoosh.

Meanwhile, Nike Virtual Studios (the arm of the company responsible for creating Dot Swoosh) is geared toward the broader Nike consumer, and the pitch is much less about Web3 than it is about community building, which makes sense considering the brand’s immense and dedicated audience.

“I have friends that aren’t even part of Web3 as a whole—they don’t even own any NFTs or anything like this—but they are heavily watching Dot Swoosh,” Christian Jones, a self-proclaimed sneakerhead who operates a Nike Instagram fan account called Catch The Swoosh, told us. Jones is enrolled in Dot Swoosh’s beta and said he’d “quite happily” spend thousands on an NFT minted by Nike.

The Dot Swoosh experience

Ease and simplicity are evident in the Dot Swoosh beta, whose interface feels less like a high-tech internet club and more like the sign-up for the 2000s-era online video game Club Penguin (albeit a sleek, chromed version).

Using the access code provided via email to those lucky enough to get off the waitlist (and to Dot Swoosh event attendees), new members are guided through a sign-up that includes claiming a handle (read: username), customizing a Dot Swoosh ID (which looks like a digital ID card), and creating a wallet to store both their Dot Swoosh ID and future digital Nike goods

Creating a passcode and then “minting” a Dot Swoosh ID all take place within Nike’s own interface, and while it may seem slow for users who are new to blockchain transactions (up to three minutes to mint), it requires absolutely zero Web3 knowledge.

After minting an ID and being treated to a set of moving, neon graphics featuring the iconic swoosh, beta members can access the Dot Swoosh homepage (a gridded background with a user’s newly customized ID card). And then, because Nike has yet to release any digital items, they wait. Some beta users have been waiting for months, though the company says big things are coming soon.

Keeping things exclusive

Nike has repeatedly emphasized that Dot Swoosh isn’t about speculation or trading, presumably avoiding the criticisms of the crypto winter. Instead, the brand seems to be focused on keeping its digital creations close to home.

The Dot Swoosh Terms of Service require users to agree that digital collectibles are “for your own personal collection, use, and enjoyment, and not for distribution,” and not “as an investment, and you have no expectation of economic benefit or profit as a holder.”

This was hammered home during the workshop in Philadelphia when someone in the crowd asked why Swoosh IDs had so many digits (seven, to be exact), unlike the more memorable single- or triple-digit usernames?

“We want to make sure there’s actual value. This is not speculation—you’re not getting this thinking it’s going to go up and to the right. We want to deliver value to the collective,” answered Nick Remlinger, a director of product at Nike. “If you’re in the Web3 space, you know how many places get scammed.”

While Nike hasn’t released any digital collectibles for Dot Swoosh users yet, the website says that the first Dot Swoosh virtual drop is coming in “early 2023.” But it’s unclear exactly what that will look like or when it will come (though we do know it will only be purchasable using USD—no cryptocurrency payments for the moment).

In the meantime, Nike isn’t leaving Dot Swoosh members completely hanging: In January, Nike opened up submissions for what it called its first “co-creation opportunity,” encouraging Dot Swoosh members to create a “visual mood board” via an Instagram post with eight original images. Winners were invited to collaborate with Nike on a virtual creation inspired by their art and could earn royalties on digital goods in the future if their design is picked.

The slow rollout doesn’t seem to bother those who have had the chance to hear Nike’s vision firsthand. At least in Philadelphia, a majority of the crowd seemed to just want to hear Nike’s pitch, which emphasized utility and hypothetical Dot Swoosh tokens, that could, maybe, one day, unlock Super Bowl tickets (a rather shameless appeal to homerism considering all the Eagles swag in the store). Some degree of revenue sharing between virtual creators on Dot Swoosh and Nike was also mentioned.

Miraflor, who attended a Dot Swoosh event in Melrose, said he sees the contained pace as a positive sign.

“Nike’s not rushing it with Dot Swoosh,” he said. “They’re taking their time. And that’s good to see. I think there’s a higher chance of survival if it’s a more considerate rollout.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.