The Glossy Podcast - Week in Review Summary

Title: Week in Review: Nike shuts down RTFKT, London bans exotic skins, Black Friday results
Host: Danny Parisi
Guest: Zofia Zvaglinska
Release Date: December 6, 2024

1. Nike Shuts Down RTFKT (Artifact)

Overview:
In this segment, Danny Parisi and Zofia Zvaglinska delve into Nike's decision to shut down its NFT digital sneaker brand, Artifact (spelled as rtfkt). Acquired in 2021 during the peak of the NFT and metaverse hype, Artifact represented Nike's significant investment in digital fashion. The shutdown marks a retreat from the ambitious NFT ventures, reflecting broader industry trends and internal company challenges.

Key Discussions and Insights:

• Historical Context of Artifact Acquisition:
  Danny recounts the 2021 acquisition of Artifact by Nike, highlighting it as a "big signal of mainstream support" for NFTs and metaverse initiatives. He notes, "Nike was one of the companies that went pretty hard into it," emphasizing the company's commitment through platforms like Dot Swoosh.
  “Nike was one of the companies that went pretty hard into it. They had a platform called Dot Swoosh to house all of their NFT metaverse kind of stuff.” [00:56]

• Reasons Behind the Shutdown:
  Zofia suggests operational challenges, such as the siloed nature of Artifact within Nike, may have contributed to its closure. She adds, "Nike has been having some pretty tough quarters over the last couple of, you know, last year or so. So I think it's not a good time for them to continue investing in innovative products."
  “It might have just been more of an operational thing where it just didn't really work team wise to have that acquisition in there.” [03:00]

• Impact of Cryptocurrency Trends:
  The duo touches on the resurgence of crypto, noting Bitcoin surpassed $100,000, which may influence future corporate strategies. Danny remarks, "crypto feels like it's coming back," though he remains skeptical about the long-term value of NFTs compared to cryptocurrencies.
  “I think crypto feels like it's coming back. But NFTs, I don't know if it is to the same degree.” [03:39]

• Comparison with Competitors:
  Zofia contrasts Nike's approach with Adidas, which continues to invest in NFT-based projects like Step and Go, indicating that the market response and operational strategies significantly impact sustainability in digital ventures.
  “It's interesting to see so big a player like Adidas still continuing on with that journey, even though, as you said, the space has cooled off in a pretty big way.” [07:46]

Notable Quotes:

• Danny Parisi: “I feel like there’s a lot we could talk about there, but I feel like you covered quite a bit of this stuff as it was happening and in the years since.” [01:02]
• Zofia Zvaglinska: “I think it’s quite an interesting circle that it’s come to, especially considering the timing of this right now with quite crypto and both NFTs coming around again.” [03:36]

2. London Fashion Week Bans Exotic Skins

Overview:
The conversation shifts to London Fashion Week's recent announcement banning the use of exotic skins, such as crocodile and snakeskin, in its shows. This move builds on last year's fur ban and reflects a growing emphasis on sustainability and ethical practices within the fashion industry.

Key Discussions and Insights:

• Historical Movement Towards Sustainability:
  Zofia explains that London is following in the footsteps of other fashion capitals like Copenhagen, which has long prioritized sustainability and animal welfare.
  “I think their decision to ban fur came in 2022, and that’s something that I guess has always been the tipping point.” [11:33]

• Leadership Changes Influence:
  The departure of Caroline Rush, a pivotal figure in London Fashion Week, may influence the direction and enforcement of new policies regarding sustainability. Zofia notes, "she’s been spearheading it for, I think, almost 20 years now," suggesting that leadership transitions can impact policy continuity.
  “Caroline Rush is leaving the BFC, and she’s been spearheading it for, I think, almost 20 years now.” [11:33]

• Industry Compliance and Brand Behavior:
  Danny and Zofia discuss the practicality of the ban, noting that many up-and-coming designers may not utilize exotic skins due to cost constraints. However, the lack of focus on regular leather raises questions about comprehensive sustainability efforts.
  “It was like an easy move, like something you can check off as part of moving things forward.” [14:03]

• Cultural Shifts and Brand Values:
  The hosts reflect on the broader cultural shifts, suggesting that some brands might be deprioritizing progressive values in favor of profitability. Zofia adds, "brands are realizing that they can sort of just not do stuff like that and it doesn’t really hurt them that much."
  “It’s almost like it’s kind of a race at any cost at this point.” [16:47]

Notable Quotes:

• Danny Parisi: “I think it was never really that fun, and I didn’t really like doing it, so I, like, I’m happy that that’s over.” [14:22]
• Zofia Zvaglinska: “And I think it's coming at an interesting time for London Fashion Week because obviously Caroline Rush is leaving the BFC.” [11:33]

3. Black Friday and Cyber Monday Results

Overview:
The final topic covers the latest data on Black Friday and Cyber Monday, revealing a slight decline in participation compared to the previous year. The discussion explores consumer behavior shifts, especially in the context of economic pressures and evolving retail strategies.

Key Discussions and Insights:

• Participation Decline:
  The National Retail Federation reported that fewer people in the U.S. participated in Black Friday and Cyber Monday sales, with just under 200 million shoppers, down by approximately 2% from last year.
  “Just under 200 million people bought something on Black Friday or Cyber Monday, which is down like 2% or a little under 2% from last year.” [19:11]

• Consumer Spending Habits:
  Zofia highlights that consumers are becoming more selective, seeking larger discounts and being more strategic with their purchases. She notes a significant reduction in spending across various retail categories.
  “Shopping categories in general were down 30% and that even retailers in the kind of fast fashion space... were all kind of down.” [21:03]

• Impact of Discount Strategies:
  The hosts discuss how deep discounting by retailers like Temu, Shein, and AliExpress (offering up to 90% discounts) attracts price-sensitive consumers, putting pressure on traditional retailers to adapt or risk losing market share.
  “Discounting strategies that are available right now via Temu and Shein and AliExpress... prices are down 90%.” [23:01]

• Shift to Mobile and Online Shopping:
  There is a noticeable trend towards mobile shopping, with consumers favoring convenient, on-the-go purchasing methods over traditional brick-and-mortar experiences.
  “Mobile shopping in general was up in a big way this year.” [24:17]

Notable Quotes:

• Danny Parisi: “It’s always the customer and the retailers have a little bit of opposing interests.” [23:01]
• Zofia Zvaglinska: “There’s this financial AI app called Clio who've said that a lot of the kind of spending has gone down.” [21:03]

Concluding Remarks

Danny Parisi and Zofia Zvaglinska provide a comprehensive analysis of the current state of the fashion and luxury industries, touching upon significant shifts in technology adoption, ethical practices, and consumer behaviors. Their insights suggest a dynamic landscape where sustainability and profitability are continually balancing forces shaping the future of fashion.

Key Takeaways:

• Corporate Strategy Adjustments:
  Major brands like Nike are reevaluating their investments in emerging technologies like NFTs amidst changing market conditions and leadership.

• Sustainability as a Continual Challenge:
  While fashion weeks are making strides in banning unethical materials, the broader industry faces challenges in maintaining consistent sustainable practices.

• Evolving Consumer Dynamics:
  Economic pressures and advanced discounting strategies are transforming how consumers engage with retail, favoring online and mobile platforms over traditional shopping events.

For More Information:
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