GM DOers!
Adidas has been a global culture leader for decades. 👟
So in a way, it’s no surprise that they’ve had so much success in web3 which is as much a cultural movement as it is a tech movement.
But how did they do it? 🧐
How did they exceed $184m in total sales volume driving over $11m in revenue?
What has enabled them to build a community with over 57,000 unique holders across 5 collections?
The Adidas Web3 Playbook
Today we’re breaking down the steps Adidas took to build one of the most engaged communities in web3.
Here’s a simplified version of the Adidas web3 playbook:
Step 1: Join an existing Web3 Community
Step 2: Distribute a free NFT to your most loyal fans
Step 3: Create a Twitter account dedicated to web3 efforts
Step 4: Launch phase 1 NFT collection with allowlist given to holders of existing communities
Step 5: Give holders utility and use a burn mechanism 🔥 to continually capture the attention
Step 6: Make identity part of your community with a PFP, use traits to create sub-communities and add more utility through rarity
Step 7: Use Tokenproof to provide exclusive access to your holders 🔑
📆 Here’s a timeline of what Adidas did step-by-step:
Joined one of the strongest web3 communities by purchasing BAYC #8774 (Sept 2021)
Distributed a POAP to their most loyal fans (Nov 2021)
Created a Twitter account dedicated to their web3 efforts (Dec 2021)
Launched Phase 1 (their first collection) of 30,000 NFTs with the majority of the collection reserved for Adidas POAP holders and BAYC/MAYC holders along with a few other communities. (Dec 2021)
Gave NFT holders the opportunity to claim physical apparel and burn their Phase 1 NFT into a Phase 2 NFT. (April 2022)
Airdropped another NFT (the Impossible Box) to all their holders. (June 2022)
Enabled Impossible Box holders to burn their NFT in order to randomly be given one of 16 digital wearable NFTs. (Nov 2022)
Gave Phase 1 and Phase 2 NFT holders the opportunity to burn their NFT in order to claim an ALT by Adidas. (March 2023)
Enabled ALT holders to connect their wallet to the Adidas CONFIRMED app through Token Proof giving them access to buy limited edition apparel only for ALT holders. (April 2023)
ALTs reveal into PFPs based on 8 traits and ongoing utility given to holders such as access to physical and virtual products, ticket for events and more. (Date TBD)
Not only did Adidas deliver an incredible experience filled with digital and physical products, but they also wrote the best playbook I’ve seen for brands to follow when entering web3. 🥇
Let's break down each step by looking at the results onchain so we can see what they did and learn how any brand could implement this playbook. 👇
Step 1: Join an Existing Web3 Community 👥
If we look into Adidas wallet we can see the first onchain purchase they made was a BAYC #8774 on September 17, 2021. We can also see they purchased 144 parcels of land in The Sandbox metaverse around the same time.
This is a genius first step in entering web3. We’ve seen some other brands do this but honestly, I’m surprised we don’t see it more often.
We all know that the best way to make friends when you move to a new city is not 1 by 1. Rather the best way to make friends is to join a community. The same is true when a brand enters web3, or any new tech/platform for that matter.
In the case of Adidas, spending $84,000 on a BAYC (Bored Ape Yacht Club) was probably no big deal. So I’m not saying that a brand needs to spend this kind of money as your first move in web3. But you do need to join a web3 community, whether it’s a free community or one that you have to pay to join.
Adidas joined BAYC because it is the premium NFT community which fits with the premium brand image Adidas wants to portray.
Find a community that aligns with your brand and values. If you do this step right you’ll be able to onboard members of your new community into your community in the future. Make sure you celebrate and show off that you’ve joined this community.
Another simple step Adidas took early on was bringing on gmoney (a respected web3 leader) as an advisor. This turned out to be a great move as gmoney built his own community which he then brought over to Adidas.
Step 2: Distribute a Free NFT to Your Most Loyal Fans 🎁
In November 2021, the footwear giant directed members of Adidas CONFIRMED — an app for drops and exclusive content — to POAP (Proof of Attendance Protocol), a platform that event organizers can use to distribute free NFTs to event attendees.
The Adidas POAP doesn't commemorate a specific event but instead functions as an onchain way to identify its most loyal followers — members of the CONFIRMED app.
Adidas later tweeted a link to its POAP, opening up access to the brand's general fanbase. But by then, most of the POAPS had already been claimed.
"For those of you in search of new playgrounds where possibilities are limitless, we invite you to join us as we voyage into the Metaverse," Adidas wrote.
"This digital collectible is our way of rewarding you for following your curiosity....this token proves you were here from the beginning of this journey. Keep it safe — it may come in handy."
Adidas signed off its cryptic message with WAGMI showing they could talk the talk and understood the slang and culture of web3. They also teased that this POAP will lead to something in the future. 🔮
Step 3: Create a Twitter Account Dedicated to Web3 Efforts 🐦
Adidas took this step all the way.
Not only did they launch a dedicated Twitter account, but they also gave their Bored Ape a name, Indigo Herz, and made him the personality for their work in web3.
We’ve seen numerous other brands follow this step in the playbook.
Most recently Michelin started their journey into web3 by starting a Twitter account.
Of course, not all of us want to manage multiple Twitter accounts, so some brands chose not to start a new account. Take a look at Puma which simply changed its name on Twitter to Puma.eth - a clear sign to the web3 community who spends a lot of time on Twitter.
Step 4: Launch Phase 1 NFT Collection with Allowlist Given to Holders of Existing Communities 🚀
In December 2021, Adidas released 30,000 NFTs priced at 0.2 ETH each. While this high quantity and mint price were likely possible because Adidas launched at the peak of the bull market, it’s impressive that Adidas sold out the mint.
One of the main ways that Adidas was able to sell out was through its association with BAYC.
Early access to mint was granted to holders of an Adidas Originals POAP, gmoney POAP, a BAYC/MAYC NFT or a Pixel vault NFT.
This early access included 20,000 NFTs for private sale. An impressive 8,555 MAYC holders and 5,451 BAYC holders minted. That’s 46% of the entire Adidas collection! 🤯
Basically, Adidas was rewarded by the BAYC community for their commitment when they purchased their BAYC in step 1. Adidas leaned into an existing community, made their presence known, and then brought a large part of that community over to their community with their first NFT.
The incredible thing about web3 is that it’s permissionless. Adidas didn’t need BAYC’s permission to do this. They didn’t need to get lawyers involved and go through negotiations and contracts. They simply used the elegant simplicity of smart contracts. 👌
The success of the Adidas mint points out the importance of really executing Step 1, especially right now while the number of users in web3 is still relatively small.
So many brands are caught up onboarding their current users to web3, which is full of friction most web2 users are unwilling to overcome. This was clearly demonstrated by the fact that only 14.77% of POAP holders minted. 😢
Step 5: Give Holders Utility and Use Burning to Continually Capture Attention 🔥
We live in an attention economy.
Brands must continually create campaigns to capture attention. Well, there’s no better way to capture attention than by giving free stuff to your community.
First, Adidas gave NFT holders a hoodie, a tracksuit and a beanie.
All NFT holders had to do was burn their NFT in order to claim this merch.
But it’s worth noting that only 81% of holders did this, which is a clear indication that brands can plan and budget for less than 100% of members claiming freebies.
There was also a time limit put on the claim period for the merch, so holders who missed the deadline couldn’t claim the merch afterwards. ⏰
Next Adidas airdropped a capsule to their holders. Obviously, this got people excited as it was unexpected.
One day your fans wake up and they’ve got something free in their wallet - something they can sell on secondary markets, which 7,131 holders did, generating over $2.5M USD in volume. 💰
Plus, add the mystery and suspense that comes with a “mystery box” and once again Adidas was grabbing headlines and capturing attention across crypto Twitter.
I won’t go into it now, but there is tremendous power in unboxing. There’s a reason we keep seeing collections do this over and over again.
In order for holders to reveal the contents of their mystery box, they simply had to burn it.
Notice how many times Adidas uses the burn mechanism throughout their playbook! 👀
Once holders burned their Capsule NFTs, they received 1 of 16 new digital wearable NFTs through a random selection process. It’s interesting here to note that only 50% of capsules were burned, once again demonstrating the natural churn of holder engagement. 📉
It’s clear to me that Adidas' original plan in web3 ended at this point.
In web3, things move very fast, so it’s vital to be agile and to execute quickly. Making strategy decks and long roadmaps can often be a waste of time because today's hottest trend is tomorrow's old news.
At Web3 Academy, we tell all investors: don’t get caught in the hype cycle. 📣 Well, the same is true for creators, founders and business operators.
Step 6: Make Identity Part of Your Community With a PFP, Use Traits to Create Sub-Communities, and Add More Utility Through Rarity 💎
Now this is where things get really interesting for Adidas. They clearly felt really good about their web3 results and decided to double down. I mean, who wouldn’t feel good about making $11M? 💰
Up until this point, their Phase 1 and Phase 2 collections were ERC-1155 which means that all NFTs in the collection are identical.
Collectors aren’t going to show these NFTs as a profile picture as there are no uniquely distinguishing traits or rarity. They are essentially editions within a collection rather than unique 1 of 1s.
So what did Adidas do? 🤔
Quite simply, they enabled holders to burn their phase 1 or phase 2 (ERC-1155 NFT) in order to receive an ALT (ERC-721).
To date, 62.5% of holders have completed the burn and claimed their ALT. So while Adidas started with 30,000 memberships, they now only have 18,755 superfans left. Talk about an incredible way to identify your most engaged fans! 👏
While this burn mechanism is quite simple, the brand and campaign that Adidas built around this phase was anything but.
They rebranded their NFTs to “ALTs by Adidas”. They built a 3 chapter experience and story with Indigo Herz journeying to Rift Valley Hotel. Oh, and they turned their Adidas originals logo sideways making it look like a 3.
Adidas also revealed traits and rarity for the ALTs. The traits are ⚽️ Strikes, 🏃♀️ Sprints, 🏀 Hoops, 🎮 Thrills, 🎵 Amps, 👟 Soles, 🎨 Decos and 🕶️ Drips. Each ALT will have utility based on its trait.
At the time of this writing, we’re in chapter 1 of 3 for the reveal of ALTs. So there will be more to come in the next few weeks or months in the unboxing, story and utility of ALTs.
Step 7: Use Tokenproof to Provide Exclusive Access to Your Holders 🔐
Adidas already has the CONFIRMED app. This web2 app has millions of members who get access to exclusive products and are rewarded points for activity.
Through an integration with Tokenproof, anyone who has an ALT can get access to exclusive merch just for ALT holders.
Earlier in the playbook Adidas gave free merch to holders. 🎁
Whereas now they are just giving access to exclusive merch. The holders still have to purchase the merch. This is an important distinction to make, especially for brands like Adidas who were able to make millions off their initial mint.
Adidas doesn’t need to give free stuff to their holders forever, but they need to give enough to make their holders feel value for the initial mint price of 0.2 $ETH. Long-term access can become the primary value.
It’s not necessary to use Tokenproof in this step. There are many apps that provide similar functionality. However, it’s worth noting that Adidas used Tokenproof. I’ve personally used Tokenproof several times, including at IRL Moonbirds events. The UX is excellent. 💪
Conclusion
Did you notice that Adidas did not start their web3 journey by launching a 10k PFP?
That’s because 10k PFP collections should be setting off Hype Cycle alerts 🚨 for users and creators alike. Despite that being the most popular trend of early NFTs, it is not the path I would recommend for a brand entering web3.
It doesn’t mean you should never launch a PFP collection.
There’s great power in identity and the community that is built from recognizing others in your community. Clearly, Adidas recognizes that, which is why now 1.5 years after launching their first collection they are launching a PFP for their community.
Disclosure: I am an Adidas NFT holder. Even though I’ve lost thousands on this since I bought near the top, it’s also the collection I’ve had the most fun with and learned the most from.
That’s it, DOers! I hope you enjoyed this one! If you did, let us know by giving it a like and leaving a comment. 😉
See you at the next week’s Discord Live Session! (details below 👇)
ABOUT THE AUTHOR
Jay Hamilton
Founder of Web3 Academy and Impact3
Find him on Twitter
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