#204: Brands Are Still Interested in Web3
#204: Brands Are Still Interested in Web3
What are Nike, Mercedes, and Michelin up to?
For anyone in Crypto and Web3 that’s hung around the past couple of years it may feel like this right now:
AI is on everyone’s mind, AI companies are raising 8 and 9 figure sums, and the applications are more tangible. Companies and individuals are quickly finding AI use cases for work and personal matters, with adoption coming quickly and furiously.
However, I’m observing brands are continuing to invest in and launch web3 initiatives, and I want to share some brands that caught my eye over the past couple of weeks.
Nike
The athletic brand has been a poster child for many in the space because of the obvious brand cachet that comes with it.
Last week, the general release for the Our Force 1’s opened up. 78% of the supply (83,180 out of the 106,453) has been minted so far, with 1 day remaining.
There are two interesting observations with this effort so far:
Communication with the community
Prior to the General Launch, there was a presale phase to a subset of .SWOOSH community members. Unfortunately this phase had a bug that caused significant delays.
The silver lining for this issue is that the .SWOOSH team held a Twitter Spaces to shed more light on the issue and next steps.
This is a $160 billion publicly traded company sharing a post-mortem on the technical issues they faced and what they were doing to address it, with thousands tuning in live or listening to the recording.
It’s hard to imagine many, if any, other Fortune 500 brands going on social media to host a live recorded town hall to share what is going on behind the scenes for a technical issue. That said, they did incorporate some good practices:
The Director of Community + Content, Senior Director of Tokenomics, and Product Manager spoke on the Spaces.
They did not bring up anyone from the audience. This Spaces primarily served an update and announcement, while providing space for the team to share additional details regarding .SWOOSH. The team threaded the needle with accessibility and not oversharing.
You could tell the team was sincere. There was little corporate speak and they knew what they were talking about. Some details around next steps were unclear (eg: when the general release date would be), and the team was upfront about it.
What about utility?!
Something I noticed early on with the Our Force 1 product page was the utility tab. These NFTs are digital collectibles..but so much more!
The .SWOOSH team also elaborated on their vision for utility for the web3 ecosystem they are building. They believe that utility should be dynamic are thinking about the concept of choice. “Utility can and will evolve over time.”
Cross-promotion across Nike properties
I received a SNKRS app (Nike’s mobile app for exclusive sneaker releases and experiences) notification before I started writing today’s piece, and it took me to this section of the app.
This an intentional cross-divisional effort, and I expect more of this as the .SWOOSH platform continues rolling out to a broader audience.
Mercedes Benz
Last week, the luxury car brand announced Mercedes Benz NXT, a division dedicated to building in Web3 and focused on digital and collectibles.
TLDR on what’s been shared so far:
Mercedes has been around for 130+ years and has observed that their fans enjoy collecting physical objects related to their brand, from cars to memorabilia. They want to bring that same energy and enthusiasm to the digital realm.
The NXT ecosystem has 3 categories: core collections, satellite projects, and peripheral projects
Core collections: Planned, developed, and managed by 0xNXT (NXT’s web3 creative studio)
Satellite projects: Focus on playful experimentation and are unrelated to NXT’s long-term plans.
Peripheral projects: Use Mercedes trademarks (under official license or fair use), created and distributed independently from the brand.
There are 3 core collections:
Generative art: Teaming up with a Harm van den Dorpel and Fingerprints DAO, a renowned group of art collectors. The collection will be available via Dutch auction on June 7th.
Mercedes-Benz top customers: This collection of 1,886 NFTs will be minted at IRL top-customer events. Why 1886? That’s the year Carl Benz released the Benz Patent-Motorwagen.
Design heritage: This collection will focus on Mercedes’ design history.
Mercedes-Benz NXT has also created accounts on Warpcast and Mirror, both of which are web3 native content platforms.
Michelin
When reading through one of the Mercedes NXT threads, I saw this in the replies:
Oh noooooo. My mind immediately went to this tweet that many jokingly reference as one of the top signals for NFTs back in the day.
Fortunately, this was a simple GM exchange, phew! But Michelin?! Time to investigate.
What do we know about the Michelin 3xplorer Club so far?
Launched last month, April 2023
There will be a 5,000 supply NFT collection based on the Michelin Man, with unique traits. The Michelin Man is kinda the perfect canvas for a NFT collection: a recognizable character and a blank canvas perfect for traits.
Michelin has a long history in the collectibles space and is continuing it by expanding into web3.
The roadmap and benefits focus on mobility, motorsport, travel, and gastronomy (fun fact: the tire company created the Michelin restaurant guide to promote motor travel and sell tires). From the Discord:
Not too shabby!
Putting it all together
As we can see, web3 is alive and kicking with large brands continuing to enter the space. This is encouraging to see while some of us degens are still reminiscing about the glory days of 2021-2022.
The space which was once rife with speculation is gradually shifting into a space with signs of maturity. The speculation will always be around, at least to some degree. But why are brands entering, and why now?
The 2021-2022 hype cycle has come and gone
A lot of it at least. As the dust has settled, brands are able to separate the wheat from the chaff and take notes from the top web3 native brands:
Who has survived the 2021 frenzy and the 2022 pullback? Why?
How have they communicated, grown, and retained their respective community?
How do you provide value with digital collectibles in a sustainable way while creating mutually aligned incentives?
As brands gain experience, so do consumers. The core audience (the 198 of us left) is battle-hardened, has a more discerning eye, and can smell BS from a mile away.
This forces brands to raise the bar, creating better standards for the next chapter of mainstream adoption. I mean, Mercedes NXT has posted 4 Twitter threads so far for goodness’ sake. And that’s a good thing 😂
Time
Web3 initiatives from large brands take time. The next wave of brands entering Web3 likely have executive sponsorship (Nike and Starbucks certainly do), and have brought on internal team members that actually understand the space.
For example, this is the core team for Mercedes NXT:
The team all has .eth addresses, are sporting PFPs that are ‘for the culture’ (Cryptoadz, Punk, mfer, Crypto Citizen), and have Twitter accounts. They get it.
.SWOOSH has a Senior Director of Tokenomics, that’s a role for team that is taking web3 seriously.
Answering “So what?”
This new wave of brands are answering the business (and brand) question: “So what?”
The obvious answer is that this will be another revenue stream for these companies. Selling digital goods has a much higher profit margin that physical ones.
The other obvious answer is that this is a way to foster community and drive brand loyalty in a deeper and more engaging way.
However, what we’re seeing is an additional storytelling and educational opportunity that augments the first two. One theme from the examples presented is that brands are starting to weave their history and lore into the technology itself:
Nike priced the Our Force 1’s at $19.82, the year the Air Force 1 released.
The Mercedes top collector collection supply is 1,886, a nod to the company’s roots.
Most of the brands exploring web3 have decades if not centuries of history and stories that are gathering dust. Web3 allows for these stories to resurface and be remixed in ways that don’t feel like a boring ‘About Our Company’ page on a website.
The snowball effect
I believe that we will see a snowball effect as more brands enter web3, with the first notable wave being Starbucks, Nike, and Reddit. As playbooks continue to unfold and tangible metrics are shared, eyeballs will return to the space with newfound motivation.
Also, I have to imagine it’s way easier to push for a corporate web3 initiative when you can cite Starbucks and Nike as examples.
I hope this provides some more insight and inspiration around how brands can enter this space for the long haul.
See you Thursday!
This should get the ball rolling.