After Nike announced that American football star Colin Kaepernick is the new face of the new “Just do it” campaign in 2019, the company’s stock price went down despite Nike’s pricing strategy. Meanwhile, the picture of the campaign is completely different and the share is at a record high.
The fuss around the sports brand arose because Nike made a political statement with the choice for Kaepernick, says sports marketer Marcel Beerthuizen. The football player refused to stand up during the American national anthem two years ago. He knelt in protest against discrimination and police brutality against black Americans.
Because of his action, he became a controversial figure. Part of the population thinks he is an icon, another part, including President Trump, should have nothing to do with him. They see his protest, which was followed by others, as an insult to the American flag and the national anthem.
“In light of the polarization in America, and the whole world, it is interesting that a company like Nike takes such a position,” says Beerthuizen. Many companies, partly out of fear of strong reactions on social media, try to avoid taking a stand.
More online sales
Nike does not. The company has signed Kaepernick with a lucrative new contract and will sell clothes with his name and photo on them. As a result of that announcement, Nike’s share price dropped by 3 percent. For a few days, the price remained at that level, until the end of last week. Then it became known that online sales were on the rise: according to Marketwatch, the online sales of the sportswear manufacturer then increased by 31 percent. For comparison: last year it was about 17 percent in the same period.
As a result of that news, and because tempers had calmed down a bit, the share went up again. In fact, now it has even reached a record high.
It’s not the first time Nike has hired a controversial figure. Previously, the brand refused to tear up Tiger Woods’ contract after he publicly went through the dust for his extramarital affairs. Other sponsors pulled their hands off him. Nike continued to support him.
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Although we have to nuance that a bit, says stock market analyst Corné van Zeijl. “Throughout the year, Nike’s stock has been going up, as have all the stocks in America. In the second quarter, the company’s figures were also very good, after which a substantial price jump followed. The record price is therefore not only due to the so-called Kaepernick effect.
“But it can be seen that this has contributed to it. You can see that in the price development that runs parallel to the reports about Kaepernick,” says van Zeijl, who finds the company’s campaign daring. “For such a campaign, Nike of course gauges what the public would think of it, but public opinion can then also turn against you.”
In part, that happened: Kaepernick haters started a boycott. They set fire to the clothing and shoes of the brand and posted the videos on social media.
Beerthuizen calls that reaction particularly exaggerated because if you look at the basis of the campaign, it is not very extreme. “If you look at the message behind the slogan ‘Just do it’, it has been the same for 30 years: go hunting for your dreams and don’t let anyone hinder you. This time is no different.”
According to Beerthuizen, it is also not a problem that a certain group of people – especially the elderly – no longer want to have anything to do with the brand. Nike continues to appeal to a young target group: two-thirds of customers in the US are under 35 years old. This shows that even 30 years after the launch of ‘Just do it’, the company still knows how to appeal to a young target group.
“Nike has announced that it is targeting 15 to 17-year-olds with this campaign,” says Beerthuizen. “In doing so, they are aiming for the society of the future. It is much more diverse than the older generation, and is open to this message.”