Virtual reality and augmented reality are poised to become the next phase of internet consumption. With companies like Nike and Roblox taking advantage of new forms of marketplaces, the possibilities for innovation in digital consumer experience are endless. Catering to the expectations and values of Millennials and Generation Z consumers will be key to the success of the virtual world, the metaverse. Nikeland on Roblox is a prime example of marketing personalized experiences to Gen Z consumers.
This month, Nike announced the creation of Nikeland on Roblox, an online gaming platform meshed with virtual reality where users can play games through their digital avatars. Time defines Roblox as “a venue for free games, a creation engine that allows users to generate new activities of their own, and a marketplace to sell those experiences.” [i]
In 2019, Nike and Roblox paired to promote the Nike Air Max with Roblox avatars wearing the new products.
Already, the youngest members of Gen Z are using Roblox to connect with their friends and play games. Avatars can be characterized in whatever way the user wants. In particular, Nikeland offers users a showroom for Nike shoes, clothes, and accessories specially made for Roblox avatars. Users can then purchase digital outfits for their avatars to wear while they play games and interact with other players throughout Nikeland. Users can even create their own games from the ground up. [ii]
Allowing users to customize their experience is not a new concept, but it works. One-to-one marketing and mass customization have been popular in online shopping for both firm and consumer because of ordering and supply-chain efficiencies and the enjoyment of creating a product made specifically for oneself.
Roblox and Nikeland have introduced a transformation in retail much like how the internet changed traditional retail with the advent of online shopping. Rather than buying a pair of Nike sneakers so you can go for a run outside, you can purchase digital sneakers so your Roblox avatar can race down a digital track in style. Or better yet, you can purchase a real-life Nike backpack and buy a matching one for your avatar as well.
As the oldest members of Gen Z begin to enter the workforce, technology like the metaverse will play a significant role in shaping the lives and careers of the youngest generation. [iii] With things like virtual workspaces, cryptocurrencies, and augmented reality changing the way consumers view the world, marketers constantly have to adjust strategy. How do you impress someone that has grown up surrounded by evolving technologies? Flexibility and innovation will allow market strategists to continue aligning their products and services with the wants and needs of consumers.
Roblox offers commerce opportunities to its users through creating and selling digital goods: “These purely digital opportunities to make a living are inspiring a young generation to believe that the metaverse is the place to make their fortunes.” [iv] Likewise, Mark Zuckerberg’s Meta, a social technology company, will further transform the metaverse and mixed reality experiences once fully implemented. [v]
Partnering with Roblox was an unexpected but innovative move for Nike, a company that – thinking conventionally – would not be interested in the virtual realm. But Nike’s forward-thinkers see the advantages of a digital game place. According to the Wall Street Journal, “Roblox is the largest pure-play U.S. videogame company by market capitalization. It had an average of 47.3 million daily active users at the end of September—many of them kids. The company has been working to expand its user base, and play a role in the metaverse.” [vi] With similar interests of reaching new consumers and expanding the metaverse through games and sports, Nike and Roblox may make a formidable pair.
For now, Nikeland mostly appeals to younger children looking to play games with friends. [vii] My 15-year-old brother, for example, used to play games on Roblox but has since lost interest because “it’s no longer popular” for someone his age. Nikeland’s future will depend on retaining those young consumers as they age and attracting new consumers.
Conversely, it provides Nike with an ideal platform to introduce young consumers to their products, and Nike appears to have plans to incorporate global sporting events into Nikeland. It could also prove to be a valuable and less expensive way to test consumers’ reactions to new products. [viii] For example, a product launch that is unsuccessful in virtual reality could prevent a much more disastrous outcome had the new product been released and failed in the real world despite market predications.
Companies like Roblox, Nike, and Meta are some of the few entering the new metaverse marketplace, which “is expected to reach $6.16 billion in 2021 and $41.62 billion by 2026, according to research firm Strategy Analytics.” [ix] While technology and gaming firms’ interests in the metaverse are obvious, the partnership between Nike and Roblox suggests infinite possibilities. If Nike can sell digital products in Nikeland, then any firm in retail or – even broader – in customer service, can enter virtual and augmented reality to market and sell their products and services.
Questions Marketing Managers Would Consider:
- Do you think virtual and augmented reality platforms like Nikeland and Roblox will be successful long-term? Explain your reasoning.
- What advantages and disadvantages are there to providing goods and services through the metaverse or other virtual reality marketplaces?
- How might Nike and Roblox continue to create engagement opportunities for users while upholding their goal to bring gaming and sports together?
- What marketing strategies do you think Nike and Roblox are using or should begin using going forward?
[i] Clark, Peter Allen. (November 15, 2021). “The Metaverse Has Already Arrived. Here’s What That Actually Means.” TIME USA, LLC. https://time.com/6116826/what-is-the-metaverse/
[ii] Nike News. (November 18, 2021). “Nike Creates NIKELAND on Roblox.” Nike, Inc. https://news.nike.com/news/five-things-to-know-roblox
[iii] Hackl, Cathy. (September 7, 2020). “Gen-Z And The Future of Work And Play.” Forbes. https://www.forbes.com/sites/cathyhackl/2020/09/07/gen-z–the-future-work–play/?sh=4f3bc6f142eb
[iv] Clark, Peter Allen. (November 15, 2021). “The Metaverse Has Already Arrived. Here’s What That Actually Means.” TIME USA, LLC. https://time.com/6116826/what-is-the-metaverse/
[v] Meta. (October 28, 2021). “Introducing Meta: A Social Technology Company.” Meta Newsroom. https://about.fb.com/news/2021/10/facebook-company-is-now-meta/
[vi] Pisani, Joseph. (November 18, 2021). “Nike Launches Virtual Play Place on Roblox.” The Wall Street Journal. https://www.wsj.com/articles/nike-launches-virtual-play-place-on-roblox-11637270756?mod=Searchresults_pos3&page=1
[vii] Lipscombe, Daniel. (November 26, 2021). “Nike Meets Roblox In NIKELAND: A Metaverse Leap For The Sports Brand.” VRFocus. https://www.vrfocus.com/2021/11/nike-meets-roblox-in-nikeland-a-metaverse-leap-for-the-sports-brand/
[viii] Golden, Jessica. (November 18, 2021). “Nike teams up with Roblox to create a virtual world called Nikeland.” CNBC. https://www.cnbc.com/2021/11/18/nike-teams-up-with-roblox-to-create-a-virtual-world-called-nikeland-.html?utm_term=Autofeed&utm_medium=Social&utm_content=Main&utm_source=Twitter#Echobox=1637254994
[ix] Reuters. (November 18, 2021). “Into the metaverse: Nike creates ‘NIKELAND’ on Roblox.” https://www.reuters.com/technology/into-metaverse-nike-creates-nikeland-roblox-2021-11-18/