What: Nike announces the closure of its NFT and digital fashion subsidiary RTFKT, marking a strategic shift in its digital transformation approach three years after acquisition.

Why it is important: The decision highlights the evolving nature of retail digital transformation, where companies are prioritising integrated physical-digital experiences over purely virtual assets and NFT ventures.

Nike is shutting down RTFKT, its digital fashion and technology subsidiary acquired in 2021, marking a significant shift in its digital strategy. The company, known for creating $10,000 NFT sneakers on Nifty Gateway and collaborating with artists like Takashi Murakami, built a comprehensive ecosystem of Ethereum-based NFTs and physical collectibles. Despite initial success and high-profile collaborations, including NBA star LeBron James wearing RTFKT Nike sneakers during the 2023 playoffs, the venture faced challenges with declining NFT prices, particularly affecting its flagship Clone X collection. The closure comes amid broader changes at Nike, coinciding with the retirement of CEO John Donahoe, who had championed the RTFKT acquisition as part of Nike's digital transformation. While RTFKT operations will wind down, Nike maintains its presence in Web3 through its .Swoosh platform on the Polygon network, though the platform has indicated it won't launch new NFT collections for now. The Clone X collection, which once reached an all-time high floor price of $63,000 in 2022, now trades for less than $1,000 in ETH.

IADS Notes: The decision to wind down RTFKT operations reflects broader strategic shifts in retail digital transformation observed throughout 2024. In September, Nike announced a renewed focus on innovation and direct-to-consumer strategies , suggesting a more streamlined approach to digital initiatives. This aligns with the industry's evolving perspective on phygital experiences, as seen in November 2024, where successful retailers began prioritising practical applications of virtual elements over purely digital assets . The timing is particularly significant given October's developments in retail technology, where major players like Google and Walmart demonstrated the value of AI-powered shopping experiences that directly enhance customer engagement. This suggests Nike may be reallocating resources from experimental Web3 projects toward more immediate digital transformation priorities that directly impact consumer experience and sales performance.

Nike is killing its Ethereum NFT sneaker and avatar company RTFKT