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The Glossy Podcast
Week in Review: Nike shuts down RTFKT, London bans exotic skins, Black Friday results
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- [00:01]
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- [00:46]
Danny Parisi
Hello and welcome back to the Glossy Week in Review Podcast. I'm your host, senior fashion reporter Danny Parisi, and I'm here with our international reporter, Zofia Zvaglinska. Hello, Zofia. How are you feeling?
- [00:56]
Zofia Zvaglinska
Yeah, good, thank you. I'm off on holiday in a little bit, so I'm just like, itching to go.
- [01:03]
Danny Parisi
I was going to say you have the wonderful long European vacation which us lowly Americans are so jealous of. But yes, we are swiftly coming up at the end of the year, I think we've got a couple more normal weekend review episodes and then we've got some end of the year stuff planned for around the end of December. It's going to be fun. Until then, though, we have a fun episode. Today we're going to be talking about Nike shutting down its NFT digital sneaker brand, Artifact, which it bought in 2021. We'll talk a little bit about that company and sort of the history of, you know, that it's like funny to call it history now, but that era of like NFT hype and where it is now and stuff like that. We're also going to talk about London Fashion Week announcing a ban on the use of exotic skins. And then finally, we will take a look at some of the Black Friday and Cyber Monday data that has come out this week. Let's start with Artifact, spelled rtfkt, which was so confusing to me when I first saw it written out. But back in the halcyon days of 2021, when NFTs and crypto and the metaverse were all the rage, Nike made this surprise acquisition of Artifact, which is a virtual sneaker brand. And it was really like the high point of that hype cycle where every, it felt like every fashion brand was getting into NFT, Metaverse, Web3 kind of stuff. I remember that time period as just my inbox was so flooded with pitches related to it. And I think Nike buying Artifact was definitely seen as like a big signal of like, mainstream, you know, support for, for that kind of wing of the industry. And then this week they announced that they are shutting it down, they're winding it down, ending operations. Nike, I feel like, 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. Artifact was a big part of that. And then now it's kind of like just going away. So I don't know, 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. So what's your take on this?
- [03:00]
Zofia Zvaglinska
Yeah, I remember I actually featured one of the Artifact founders in our glossy 50. So I think it's quite an interesting circle that it's come to, especially considering I guess the timing of this right now with quite crypto and both NFTs coming around again. I think that a lot of the times people talk about the crypto space and the NFT space going around in cycles and technically, according to some data, I think that the Ethereum or maybe Bitcoin, one of the two, hit an all time high price wise this week.
- [03:37]
Danny Parisi
I think that's. Bitcoin is like over $100,000.
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Zofia Zvaglinska
Yeah, exactly.
- [03:40]
Danny Parisi
For the first time.
- [03:41]
Zofia Zvaglinska
So I think that, you know, it's an interesting time to wind it down. You know, for a long time I'd say that Artifact almost allowed Nike to get in on this very kind of unique community that they didn't have access to before. And then obviously they created.swoosh and they started to almost shift things away from Artifact into, you know, their own platform. And based on some insider gossip from various people I know in that kind of side of things, a lot of those like company issues were around the siloing of Artifact with the rest of Nike. So I think 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. And also, you know, Nike has been having some pretty tough quarters over the last couple of, you know, I'd say last year or so. So I think it's, it's not a good time for them to continue investing in innovative products when they need to find focus on brand building in a big way.
- [04:42]
Danny Parisi
Yeah, it's interesting and I think Nike getting into that world was in part, my feeling was that it was in part kind of a defensive maneuver because Nike products were being made into NFTs by so many other companies. There was that very high Profile lawsuit with StockX, where StockX was selling NFTs of Nike sneakers. And their argument was like, well, these are tied to real sneakers that we own, so it's okay. And Nike was like, no, the NFT is a new product that's just like using our imagery. So that was like a whole thing between them. So I think Nike was like, our stuff is like being made into NFTs anyway, so we might as well like, you know, have our own official kind of take on it. But you're right that we talked about the Trump administration coming in, being flush with crypto cash and Trump promising to be like the most crypto friendly president ever. Does feel like it is reviving some of that world a little bit. Although I think crypto feels like it's coming back. But NFTs, I don't know if it is to the same degree. I think there is a little bit of a bump to prices, but it's like they've dropped like 98% in value since 2021. So I don't know how big of a deal that is. It is also kind of like one of those things where it's like, what's the actual use of it? And like crypto, I feel like for all of its faults, does have some sort of value and that it's like, I mean, it's not really. It's kind of a speculative asset, but nft, I feel like the value of that was kind of like once people woke up from it, it was like, what is the point of this again? So that's my feeling at least. I know I'm a little bit more skeptical of this whole world, but yeah, I wonder if Nike wants to get back into anything related to this space. It probably would be more in the crypto space rather than like NFT or Metaverse stuff, which I feel like has kind of been left behind by a lot of big companies.
- [06:36]
Zofia Zvaglinska
Yeah, I think that it's mainly just about that investment. It takes a lot to kind of manage that whole space in terms of resources. You need people who are overseeing communities. You need someone who understands that infrastructure and is able to kind of run it well on the back end so that people don't have a bad experience with that kind of customer service side of things. Because a lot of the times those NFTs were tied to real world kind of perks or shoes or something else. And you see that now with Adidas, who are mainly kind of partnering with Step and Go, which is a kind of game where you basically collect points as you move. And they're still continuing with that project, even though that's NFT based. I think it's different for them because they've seen something which has actually worked and it's their third collaboration, I believe, so they're not acquiring anyone like Nike did with Artifact, but they are continuing that collaboration and they're still growing that community, so. So 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]
Danny Parisi
Yeah, I mean, I remember at the time my feeling and talking to some people in the space was that a lot of the hype element of it was gonna sort of die off. Cause a lot of NFTs were literally just a picture and you buy it and it's like, okay, now you own it. Cool. It's like no value really beyond that. But I remember people saying that there were a lot of more practical uses for the technology that were kind of being overshadowed by the insane prices of the kind of more just speculative parts of it. And people told me that once that kind of dies down, which I think it has now, those more practical use cases would shine through. And I think that's probably still true. But I'm not as plugged in, so I haven't seen as much of it. You talked to Adidas yesterday or this week?
- [08:35]
Zofia Zvaglinska
Yeah, I talked to them this week about the project. I'm hoping to go into it a little bit more in the fashion briefing that will be out this week as well. So I'll divulge in that a little bit more. But it seems like they're more invested in that and they're also taking a more temperate approach by not going all in and trying to acquire any of these companies, which might be a little bit risky because obviously Artifact only lasted say what, two years? I think it's not something that was a particularly long term investment, especially the way that Nike went after that and how things went for them. But in terms of other applications, you talked about practical applications of NFTs. It's always that kind of blockchain element. And I think that in our world at least, the most obvious, I guess, example of that would be the Aura Blockchain Consortium, which has a whole load of luxury brands using it to basically authenticate their goods on chain. And that's the most easy way, I think, of looking at utility outside of just NFTs.
- [09:43]
Danny Parisi
Yeah, the authentication aspect has always seemed like the most obvious practical use of the technology for fashion. So maybe we'll see some more of that. One other element of this to talk about is that the shutdown of Artifact comes only, I think, two months after Nike's new CEO, Elliot Hill, came on board. And the artifact acquisition happened under the previous CEO, John Donahoe. So this definitely feels like maybe this was in the works already, but it does feel like it's part of kind of the new regime is, you know, sweeping away stuff from the previous era that maybe wasn't working. So we will see where he takes Nike from here. Do you want to move on to London?
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Zofia Zvaglinska
Yeah. That's good.
- [10:26]
Danny Parisi
Yeah. So London Fashion Week announced this week a ban on the use of exotic skins in its show. That's like crocodile, snake, reptiles in general, I guess. I think regular cow and goat and sheep leather is still okay. But this comes after London Fashion Week also banned fur last year. And I wanted to talk about this because on the one hand, I feel like we've seen over the years a steady move away from fur and leather and especially exotic leather from endangered animals and stuff. I feel like that has become kind of not okay to do. The ethics of it have become pretty obvious. But at the same time, I also am feeling like recently, especially in the last year, that more companies are kind of like, starting to not care as much about appearing progressive or in touch with stuff. So, like, feels like a weird back and forth there. Like, some things I feel like are progressing and some are maybe regressing in a way. But what do you make of this rule? And do you think also that it has anything to do with London's kind of, like, competition with the other big European fashion weeks?
- [11:33]
Zofia Zvaglinska
Yeah, I mean, I think that, you know, this is a move that is, I guess, the first out of the other fashion weeks to do so. As you mentioned, obviously, all of the other big fashion weeks have prohibited fur already. And, you know, the kind of starting point for that was in Copenhagen with Copenhagen Fashion Week, which has always been more tied to sustainability and also animal welfare than maybe some of the other fashion weeks. I think their decision to ban fur came in 2022, and that's something that I guess has always been the tipping point. I think it's coming at an interesting time for London Fashion Week because obviously Caroline Rush is leaving the BFC, and she's been spearheading it for, I think, almost 20 years now. You know, this week with the Fashion Awards, she gave a very kind of heartfelt speech about what it's going to take to move London Fashion Week forward. But she's going to be stepping back, and we're still unsure who's going to be kind of taking the reins in terms of where that direction is going to be. But I do think it might be a slight deference on the part of London Fashion Week of pulling away attention from some of the other bigger issues that are affecting designers in this capital. You know, it's quite an easy move nowadays, I think, to ban exotic skins because it's not a material, I think, that a lot of young designers who make up the most of London Fashion Week would use simply because of the cost. Like, it's not something that they would be particularly interested in. And, you know, you see it in other kind of areas. The only times when maybe more exotic skins are used is when they're used by brands who are keen on eradicating invasive species, which is, I think, something that I've seen happen with the sneaker brand called P448. I think they've used fish scales and I believe, something from Python, which both considered invasive species in specific parts of the world. So it's almost like a waste product. Interesting that there's no focus on leather, like, at all. And I'm wondering what that kind of says about, again, making kind of real change. And it kind of calls to your point about whether brands are really caring about this or if they're a little bit less fast about keeping to all of these guidelines. This feels like the lowest thing that you can do on the checklist in terms of kind of moving things forward.
- [14:04]
Danny Parisi
Yeah, I think you're right to describe it as a safe move. I was doing a little research and, like, crocodile leather and snakeskin stuff is, like, definitely still out there. It's definitely expensive. And so you'll see it more at, like, super luxury handbag brands and stuff. Like, you can get. I'm pretty sure you can get a crocodile Kelly bag.
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Zofia Zvaglinska
Yes.
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Danny Parisi
Don't quote me on that. But, like, there is, like, the really expensive handbag brands are definitely still using this. But you're right that, like, I think a lot of the brands, a lot of the designers at London Fashion Week are not. So it was kind of an easy, like you said, like, an easy thing to do. It's like, it's like I remember being a kid and for Lent, trying to give up broccoli or something, and my mom was like, no, you have to give up something you actually, like, want to eat. But, yeah, I think the lack of comment on, like, sort of like leather, leather, like, regular leather is interesting, since that would Be way harder to do. But that's kind of untouched. And then yeah, I feel like there's been in the last five or six years that I've been covering the industry. It's like there was a narrative of like, brands need to be more socially conscious, they need to show their values, consumers want to like buy from brands that share their values, etc. And like, I feel like just in the last year, maybe a little longer, there's kind of been a move away from that. Like maybe you could, you could tie it to Trump winning, you could tie it to like, I don't know, the resurgence of kind of the far right across like the western world a little bit maybe. It's like, I feel like DEI stuff is another thing where like a lot of brands are really into that for a while and now it feels like they're like, eh, maybe we'll just not care about that anymore. And actually another thing I was going to mention was, I think at Paris Fashion Week there was a, was it PETA or a different group that like stormed a Hermes show like protesting leather. So like, it's not like people don't care. But I do feel a little bit that companies are like realizing that they can sort of just not do stuff like that and it doesn't really hurt them that much. Like we talk all the time about how a lot of people tell me that like companies like Shein, these super low cost Chinese brands are like so bad for the environment, they have such terrible working conditions. And then separately they're like, young people want brands that like represent their values. But then a bunch of young people are buying from Shein, so like it's doesn't change the morality of it. But I do think that maybe some companies are realizing that it maybe doesn't hurt the bottom line as much as they were concerned it would to just not do that stuff, you know, which isn't good. Like it shouldn't just be about the bottom line, but like it kind of is for a lot of companies. So for most I would say I don't know. So that's just a feeling I've had. Is there sort of like this unwokening happening a little bit where they just kind of like stop giving a shit?
- [16:48]
Zofia Zvaglinska
Yeah, definitely. And I think you're seeing that kind of across the board as you mentioned. Like I don't know if you saw but Coca Cola, Cola's kind of like gone back on its plastic pledge, saying that now they're not going to reduce the amount of plastics they're just going to change it for ones which are going to be recyclable. And again, this comes like hot off the heels of cop and I guess the agreements that were supposed to be made around plastic commitments, I feel like this is just a bigger part of that. Chasing that bottom line and kind of making sure that profits keep growing is becoming way more of a priority for brands. It's almost like it's kind of a race at any cost at this point.
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Danny Parisi
Yeah. And COP was kind of depressing to read about for me because it's one, it was hosted in Azerbaijan, which is like a petro state. Saudi Arabia just vetoed anything that would actually move the world away from like fossil fuels. There was like so many lobbyists for fossil fuel companies there and it's just like nothing got done. The US like Trump is literally going to remove the US from the Paris Accords. It's like, feels like the opposite of progress is happening in a lot of ways. And I feel like, you know, the companies in our industry like kind of are feeling that and they're like, hey, we can just like be regressive kind of openly and it's like kind of fine.
- [18:06]
Zofia Zvaglinska
Yeah. It's interesting though because the EU targets are still going to be in place and granted they might move some of the deadlines. But something that I'm writing about this week is for example, the kind of right to repair. And also I guess the more widely just thinking about all of those different country specific regulations that people are going to have in the eu. So obviously in France, that's the fast fashion bill, that's the kind of right to repair thing which is going to be coming Into Place in 2027, all of these things are going to be affecting global brands. And I think that with digital product passports and generally a small motion of countries trying to do their bit, I guess in this world right now, when every company is going to be globalized, it doesn't really make sense for them to make two sets of products. So I'm wondering, even if that small minority of countries is able to do something, is that going to be enough to kind of shift things across the board because they don't want to be producing things twice?
- [19:12]
Danny Parisi
No, that's a really good point. And my sort of American centric view is like, oh my God, this is so disastrous. We're pulling out of the Paris Accords. And it's like I'm trying to remind myself that the US is not the only actor in the world and EU definitely has problems, but is a lot better about this kind of stuff. So that's good. Let's move on. Our last topic, I want to talk a little bit about Black Friday and Cyber Monday, since it just happened. The National Retail Federation released some data that showed that actually fewer people shop this season in the US at least than usual. 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. Still like 2/3 of the US that's a lot of people. But it's. It's definitely decreasing. I actually did the opposite. Like, for me personally, I usually skip. Like, I don't really, like, participate in this whole thing, but this year I did buy some stuff. I don't know why. Maybe I just kind of like my natural holiday shopping just happened to line up, really. I wasn't like, seeking out the deals necessarily, but I was, like, thinking about getting gifts or maybe because I was with my wife's family and I was thinking about getting them gifts and stuff. And then I was looking at stuff and I saw it was on sale and I was like, why don't I just do it right now? But I normally don't. I'm one of the people who kind of sits it out usually. So it's interesting that the world had the opposite. I'm like, everyone should just be following what I do. But the world had the opposite kind of. It seemed like fewer people participated. I think part of that is people are just extremely, extremely price conscious, very protective of their wallets, and really wanting only the best deals, which is like, it's always true, but it does feel like the increasing cost of everything, anything and everything has made people really cautious about when and where to spend their money. So I don't know, what did you think of some of the data that came out after the week was over?
- [21:03]
Zofia Zvaglinska
Yeah, I mean, I agree. I think that a lot of people are spending less and again, they're being more choosy about where they're going to be spending. I was on a panel with list and launch metrics kind of before the holiday season even then. We were talking about how people are being very specific months ahead of time in terms of knowing what they want to buy, when it's going to be on offer, and waiting for the absolute kind of biggest discount they can get. Because I think nowadays, when you think about it, I don't think discounts of 30% really do it that much anymore. You'd want to have something bigger. And that usually either happens because you couple discounts or you have coupons or you're able to kind of do something to even get more money during this kind of specific discounting season. And that's something that I've seen from a couple of different companies that have provided data. There's this financial AI app called Clio who've said that a lot of the kind of spending has gone down, that shopping categories in general were down 30% and that even retailers in the kind of fast fashion space, which is something that we cover a lot, Temu has remained in that top 15 of retailers. But other ones like Shein, Forever 21, Zara, and they were all kind of down. I think Zara was down 29%. Forever 21 was down 36%. So it's quite significant considering, I guess, the kind of expansion of discounting strategies. I recently wrote a story about the types of discounting strategies that are available right now via Temu and Shein and AliExpress. It is insane. Some of those prices are down 90% and they also do daily offers and specific discounts if you engage with the app. So I feel like that's somewhere where even if those customers are not keen on buying through there with rock bottom prices, I think that that's a pretty good indicator of what kind of trends are happening right now.
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Danny Parisi
No, I think you're totally right that like the, the level of discount is a big factor. And I was thinking about how this is. This is always the case that the customer and the retailers have a little bit of opposing interests. Like the customer wants the deepest discount and the retailers want to not discount. Like obviously they want to make the most money. But I think particularly recently and the like sort of economic environment is like really pushing those two apart where like prices are higher in the US wages are stagnated for many, many years now. So like people only want to get something when it's like 70% off or something. And then in the meantime, a lot of the retailers like the business environment, the focus has shifted a lot toward profitability. And if you're not profitable, you need to get there because there's not as much venture capital flowing around and stuff. So the retailers don't want to discount. They're trying to get the most margin as they possibly can. They're less willing to give up margin in exchange for growth or scale. So I don't know, it feels like I definitely heard about some companies, like we're doing a lighter discounts this year. It's only going to be 10% or 20%. And it's like, no one's going to show up for that because they're either going to go to the companies that are discounting way deeper, or they're going to go to TEMU or something like that.
- [24:18]
Zofia Zvaglinska
Yeah, and the other thing is, it's always kind of about opportunistic shopping when you're kind of doing things around Black Friday. So, again, like, making sure that you have all of that convenience kind of set up around the customer experience. So whether that's, you know, is your product available to shop on Instagram? Shop. Is it available through Shopify? Like, is that checkout process, like, as simple as you can get it? Like, those kind of things affect what kind of purchases you make on your phone, which, you know, mobile shopping in general was up in a big way this year. I feel like that's kind of the main platform that people are shopping on right now, because, again, it's like, you see something, you click on it, and, like, you buy it there and then, guilty as charged. I. I bought something from Issa Maya. Like, with that.
- [25:03]
Danny Parisi
Yeah, yeah. And. And I think that I saw some data that, like, foot traffic at Brick and Mortar, Black Friday shopping was down, like, 3% or something. And that's, like, kind of an interesting cultural thing, because I feel like that used to be in the US this common cultural experience of, like, waking up at the crack of dawn the day after Thanksgiving and then going and, like, fighting a suburban mom over a TV at Best Buy, you know, and, like, that just doesn't really happen anymore. Maybe the pandemic was, like, kind of the death knell of that, but I'm like, that's just a practice that I think a lot of Americans don't. Don't do anymore. But also, it was never really that fun, and I didn't really like doing it, so I, like, I'm happy that. That. That's over. Well, this has been a great conversation. Thank you, as always, for being here, Zofia.
- [25:49]
Zofia Zvaglinska
Thank you, Danny.
- [25:50]
Danny Parisi
For those of you listening, don't forget to give us a rating and a review, whether that's Apple Podcast, Spotify, wherever. You listen to this podcast, because that helps us out so much. And don't forget to subscribe to the glossy podcast here. Interviews with industry insiders every Wednesday and weekend review episodes with me every Friday. Until next time, thank you all for listen.