Open3 Collective Updates 1/2/23-1/8/23 – Is Nike using web3 to set stage for anyone to create sellable digital products using Nike assets, and could some of them lead to physical products? 

This post includes updates to the Open3 Collective knowledgebase and sent via email to members.

The one takeaway for this week’s update

Is Nike using web3 to set stage for anyone to create sellable digital products using Nike assets, and could some of them lead to physical products?

Brand/manufacturer-to-consumer relationship has always been one way when it comes to products – brand sells to to consumer.  Web3 can change that dynamic and Nike is leading., where it is using web3 to create infrastructure that allows anyone to create.  Presumably, people will also be able to profit off of these creations, which is easy to build in using web3.

Consumers are already there, using generative AI to create digital branded items.

Could creations become physical, either because they are popular and there is demand and/or could there be one-offs produced via 3D/Additive manufacturing? Why not?

Nike will always create products in-house, but web3 opens the doors to all of us creating and selling Nike products.

Of all brands, Nike has the mojo and the resources to pull this off.  But doing what Nike is doing is not out of reach for other brands, even right now, and the technology will get better fast so that all brands can model off of Nike to do similar things.

To see all weekly takeaways published to one document, click here.

Key Tools Changes/Additions

• Added a link to extensive list of ChaptGPT prompts to use as examples and for modeling. See tool AI technologies enhancing web3;
• Added Creative subsection to tool Artwork and added data on GenZ;
• Added stats related to user-generated content to the tool Building communities/tribes/superfans/fans in web3;

The above are key updates to consider.   Go to the web3 market intelligence database to see all.

Notable Market Intelligence Updates

• Shopify Merchants Can Now Design, Mint and Sell Avalanche NFTs. This is interesting from an infrastructure perspective, but I don’t recommend using Avalanche as a blockchain for minting, and selling JPGs is not a money maker or sustainable path for the majority of consumer brands.

The above are key updates to consider.   Go to the web3 market intelligence database to see all.

Forward Guidance

Web3 is in the early adopter’s phase

Recent data seems to indicate that 400 million people own cryptocurrencies.  Out of 5 billion global internet users, that is 8%, which in the adoption curve, means crypto overall is in the early adopters phase.  We don’t know what percentage of this number are in web3, because not everyone who owns crypto also participates in web3, but many do, so overall, web3 is most likely in the early adopters phase.  In the United States, data suggests 15% crypto ownership, but for web3 no data could be found.

What is its growth trajectory from here?  When will it hit early majority?  Late majority?  We don’t know, but growth uptake tends to accelerate through the early adopters phase.  Consider the following major brand web3 activations:

1. The consumer product luxury vertical has taken an aggressive lead with many leading brands – too many to list here – pioneering web3 models for the rest of us to learn from and potentially use and is organizing itself at many different levels to bring web3 mainstream.
2. We are seeing mass market deployment of web3 from Nike via their new .SWOOSH platform after successfully testing web3 since 2021.
3. Starbucks is engaged in a massive overhaul of their loyalty program with 27+ million people, to include web3.
4. The NFL is expanding web3 from 20 games in the 2021/2022 season to 100 games for the current season, out of their 272 total annual games (because web3 was a smashing success in last season’s testing).
5. Reddit saw 5+ million NFTs minted to over 4.25 million unique wallets for a simple collectible NFT, which is surprising in and of itself, but even more surprising is that as of this writing, it continues a relentless climb with more mints even in the depths of a bear market in which we find ourselves.
6. Instagram is rolling out functionality to let users create, display and sell NFTs on their platform
7. A huge point of friction with participating in web3 is converting fiat currencies to cryptocurrency.  Paypal is integrating with Metamask, a popular crypto and NFT wallet, to make it easy to covert fiat into cryptocurrency and back again.

I think we could see early majority as early as next year, but more likely in the 2025 to 2027 time frame.

Most brands probably do not need to add web3 for customers at this time, unless their customers are young people or they want to expose their brand to young people now so that this demographic becomes customers when they get older.  We know that brand awareness and perception and possibly brand loyalty forms at early ages and can last a lifetime. This is a big reason why the luxury vertical is pushing hard into web3 and the metaverse.

If brands sell durable products with higher price points, which encompasses many in the outdoor industry, they may want to at least setup their inventory for digital pairing with NFTs, because those products produced and sold today could generate secondary market revenue years down the line.

At a minimum, all brands should be learning and testing it so they get comfortable with the paradigm and understand strategically how it fits for them in the future.

See all forward guidance published to one document here.