News: Nike’s online sales jumped 31% after company unveiled Kaepernick campaign, data show
Talk of Nike Inc. sales taking a hit from the company’s decision to put ex–NFL player Colin Kaepernick at the center of its latest “Just Do It” campaign is looking overblown, based on data from a Silicon Valley digital commerce research company.
After an initial dip immediately after the news broke, Nike’s NKE, -0.60% online sales actually grew 31% from the Sunday of Labor Day weekend through Tuesday, as compared with a 17% gain recorded for the same period of 2017, according to San Francisco–based Edison Trends.
“There was speculation that the Nike/Kaepernick campaign would lead to a drop in sales, but our data over the last week does not support that theory,” said Hetal Pandya, co-founder of Edison Trends.
Nike’s stock has also held up after its initial slump. The stock rallied 2.2% on Monday and has retraced 93% of the decline to a three-week low that it suffered on Sept. 4, immediately after the campaign was revealed. It has gained 31% in 2018, while the Dow Jones Industrial Average DJIA, +0.64% , which since 2013 has counted Nike as a member, has gained 5%, as the S&P 500 index SPX, +0.06%has risen about 8%.
The news generated plenty of online buzz, with social engagement around Nike and Kaepernick rising sharply this week, according to 4C Insights, a marketing technology company. Mentions of and comments about Nike on social-media platforms rose 1,678% on Sunday and Monday, according to 4C data. Mentions of Kaepernick spiked 362,280%, the data showed.
The athlete has become the face of player protests against racial injustice and police brutality, since he started sitting and later kneeling during the national anthem, inspiring others to follow suit. The action has irked President Donald Trump, who weighed in on the Nike campaign in a series of tweets this week.
That didn’t deter Nike from airing its first TV ad of the campaign on Thursday. Narrated by Kaepernick, the ad includes appearances by other high-profile African-American athletes Odell Beckham Jr., LeBron James and Serena Williams. The ad urged people to follow their dreams and ignore naysayers.
“Calling a dream crazy is not an insult,” Kaepernick says in the Nike spot. “It’s a compliment.”
To be sure, Nike has taken some flak from customers who oppose the NFL player’s actions. Sentiment toward the brand dropped 38% on Sunday and Monday, according to 4C, but it’s not all bad news.
Nike’s most engaged audience persona is “Made it and Know it,” said 4C Chief Marketing Officer Aaron Goldman, one of 70 categories of consumers that 4C has identified by analyzing social-media engagement on a range of platforms. People in that bracket are generally successful in their careers and personal lives, are typically single with robust social lives, and like to spend money on entertainment and travel, as well as online streaming services.
“Racial equality is a top concern for this audience, along with causes like clean-water access and gun control,” Goldman said.
Sentiment toward Kaepernick actually improved by 40% this week, he said.
“You can be darn sure that Nike has done its research and knows what will move its product and who this campaign will resonate with,” said Goldman. “They are the ones [Nike has] decided will be its future customers, so, if others are getting upset, [Nike has] planned for that, and it doesn’t care.”
Daring to take a political stand has become a new paradigm for brands, as they seek to connect with a younger generation and changing political views, said Goldman.
“A company like Procter & Gamble PG, +0.19% that makes products for everyone from young to old, male and female, are not going to do something controversial that might alienate half their audience. But a company like REI can take a stance on national parks, because they know that is really important for their customers.”
The outdoor-pursuits retailer REI was one of the companies that hit back against Trump’s executive order late last year that would dramatically reduce the size of two national monuments in Utah.
Oppenheimer analyst Brian Nagel commended Nike for its “more edgy, risky” campaign, while refreshing the three-decades-old “Just Do It” slogan.
“The extensive roster of athletes and their powerful stories are core to the company’s stepped-up efforts in reaching a younger demographic,” Nagel wrote in a note earlier this week.
The Kaepernick campaign “is clearly an effective way to make some noise in the industry, regardless of any political bent. Over time, for Nike, we think the power of the messaging from this new broader campaign is apt to overshadow any potential backlash, near term, in our view,” Nagel wrote.
By CIARA LINNANE