Nike and Apple lean into the metaverse

The news: While the metaverse remains a nebulous notion for most consumers, Nike and Apple are moving ahead with plans to stake their ground in virtual environments.

• Nike on Monday announced the launch of its web3-enabled .Swoosh platform. The company plans to use .Swoosh to sell virtual sneakers and other goods and allow users to collect and show off in digital games and immersive experiences.
• Apple is reportedly hiring engineers to work on the development of a 3D mixed-reality world similar to the metaverse, according to Bloomberg.

Curious timing: The timing of the companies’ initiatives is notable given that Facebook-parent Meta last week laid off 13% of its staff as it pulls back on its metaverse expenditures, and virtual goods fan-favorite Roblox is facing year-over-year revenue declines. Meanwhile, the broader market is increasingly focused on near-term profits rather than long-term moonshots.

• Few marketers are all-in on the metaverse. For example, only 27% of marketers strongly agree with the statement, “There will be widespread adoption of metaverse technologies for consumers and brands,” per an October Sitecorp survey.
• And the majority of consumers—56%—believe the metaverse will have no impact on their quality of life, per a YouGov consumer survey.
• There’s been little rush to join the metaverse as most marketers and retailers remain in an experimentation mode. For example, Nike, which plans to debut its first digital collection next year, is entering a “test-and-learn phase,” Ron Faris, head of Nike Virtual Studios, told Bloomberg. “We don’t know quite yet what the behavior will be that consumers will have with the virtual product.”

The strategies: .Swoosh is the latest in Nike’s metaverse-related initiatives. Over the past year, it began filing trademarks for virtual goods, opened a virtual world on Roblox, and acquired virtual sneaker creator RTFKT.

• Some of the digital items Nike plans to sell on .Swoosh will unlock access to physical products or events like intimate conversations with athletes or designers.
• Nike athletes will have their own storefronts on .Swoosh, and individual creators may also be able to co-create products with Nike through community challenges and earn royalties on their designs.
• Apple’s plans are less clear; however, job listings from its Technology Development Group show that it aims to hire people to make content for a mixed-reality headset. For example, one position for a senior software engineer requires "experience in 3D graphics to drive building a simulation and synthetic data pipeline for machine learning training,” per Insider.

The big takeaway: Despite the current economic uncertainty, Nike and Apple clearly believe there’s a significant opportunity to build their own mixed-reality communities.

• While Nike and Apple have significant brand equity that may enable them to attract users, most brands would be better off investing some of their test-and-learn budgets (if the opportunity is still available) in readymade ecosystems such as Roblox.
• It is not yet clear whether the metaverse will ultimately resonate with most consumers. Still, it likely will provide some niche segments a place to socialize that retailers and marketers can use to show off products and sell virtual goods.

This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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