Nike Buys A Virtual Sneaker Maker

Nike NKE Inc. has agreed to buy RTFKT, a Utah-based business founded just two years ago. The company produces virtual products like sneakers. It ensures authenticity and it uses blockchain technology. Financial terms were not disclosed.

Nike’s CEO John Donahue said that “this acquisition is another step that accelerates Nike’s digital transformation. Our plan is to invest in the RTFRT brand, serve and grow their innovative and creative community and extend Nike’s digital footprint and capabilities.”

What is metaverse? Metaverse combines the words meta and universe and is generally used to describe a virtual universe accessed by virtual reality (VR) technology. The metaverse supposedly has the potential to revolutionize the way we do business, visit friends, shop and network, but it does not fully exist yet beyond a theoretical concept. Mark Zuckerberg recently changed the name of Facebook to Meta using metaverse to describe his world-wide company.

The virtual world is attracting attention and investments from apparel brands since it is an opportunity to connect with younger users and influencers. It creates awareness of their products. Brands can now work with influencers without actually giving away goods for free. Small brands were especially interested by the ability to save money since they could save by not sending influencer samples.

According to Vogue this is getting real traction. Farfetch became one of the first large retailers to test the practice of digitally dressing influencers to promote the launch of its new pre-order offerings from brands including Balenciaga, Oscar de la Renta, Dolce and Gabbana, Casablanca and many more.

“Because if it is digital, you are one click away from the product,” says Vogue Business. By offering a better approach to sampling and shipping, digital fashion has an appeal in today’s fast-moving world. There is greater speed in completing a transaction. Already Kering, LVMH and Richemont have turned to digital wholesaling and digital trade shows. In the past these companies required samples while today the digital samples take their place.

There is a great example how it works. Farfetch worked with digital fashion platform DressX to digitalize a garment. 3D creator Threedium digitized the accessories. Influencers selected their preferred look, they supplied multiple images to be digitally tailored by the DressX team, influencers were given guidelines on how to pose their images for digital dressing. Then Farfetch, DressX team and the influencers reviewed the images to make any necessary changes.

These are discussions that lets us better understand how Nike will use MTFTK. There will be fewer, if any, samples. The digital samples will be designed and confirmed by teams and it will be a substantial expense saving with fewer samples, faster action and an ability to change designs.

POSTSCRIPT: Nike always assumed a leadership position in the athletic shoe business.  By using VR technology, the company will save money and come to market with new designs quicker.  Here is a company with a vision for the future.