Nike May Lose the Battle, But They’re Winning the War


Yesterday, Nike revealed the new campaign marking the 30th anniversary of their “Just Do It” marketing slogan, with NFL player Colin Kaepernick as the face of it. The Internets, understandably, went to shits.

For one side of the culture, the campaign was a massive hit and a salute to American athletes who have been taking a knee during the National anthem in protest of police brutality. Celebrities and athletes tweeted their support. Blacktwitter raved about it. I thought it was awesome.

A different corner of the Internets thought it was a betrayal that Nike would endorse an athlete and a movement that disrespects the ‘military’ by not standing for the anthem. So they’re boycotting the brand and destroying what Nike gear they had because all of a sudden they cannot stand the brand because it stood with Cap. Personally, I find the ‘respect the military’ argument very suspicious considering that the freedom the military fights for is the freedom of American citizens to protest or refuse to salute the flag or anthem, if they so choose. You can’t put the people fighting for the freedom above the freedom itself. But that’s talk for another day. For now, let us talk about the business angle. Nike, after all, is a business so whatever stand they’re taking has to be looked at through business lenses.

First, yesterday morning, the stock dipped around -2.58% or roughly $3.4bn. Headlines screamed that the ad campaign cost Nike over $3billion as if that’s some sort of disaster. Nike’s market capitalization is $128 billion, a $3bn fluctuation in stock price is not meaningful. So as far as their stock goes, this campaign hasn’t dented them at all. Investors are saying, we don’t think there will be any significant damage to Nike’s business from this, and I’m inclined to agree. I was even hoping to get more dip so that I could even consider buying, but it didn’t dip enough so I’m still watching.

The bigger picture however, is what impact this campaign has overall on Nike’s business in the long term. Nike understands their market and their recent campaigns around Serena Williams, Lebron James and now Colin proves it. Black people, young people and progressives are Nike’s biggest customers. Most of these people support Colin and the entire protest around police brutality in America. Nike identifying with that struggle gives them a halo of authenticity and increases their brand power among those who actually buy shoes. While I hate the fact that Nike as a company is one of the single biggest sources of wealth transfer from the black community to the pockets of Phil Knight and other Nike shareholders, it is what it is. Nike will become more popular among the right buyers, while those who are boycotting the brand are people who weren’t moving the numbers to begin with. Even on twitter, most of the people destroying Nike gear are destroying mostly socks, shirts, and every now and then a few Roshes or low cost running shoes. The real money makers are happy with Nike and that’s all that matters.

The second reason this is a stroke of genius from Nike’s part is that it takes full advantage of the switch in cultural direction by the biggest mover of Adidas shoes, Kanye Omari “Yeezy” West. Kanye said slavery is a choice, and no matter how many times he tries to clarify that statement, people heard it in the context of his evident preference for white women, his outspoken support for Donald Trump and the MAGA movement, and other unwelcome shenanigans. By taking Colin’s side, and provoking reactions in the red state, relatively low income demographic, Nike has pigeon-holed Adidas into an unsavory perception of being the MAGA supported brand which Adidas now has to work to distance itself from. No matter how Adidas goes about it, they will alienate some buyers. This is a master stroke from Nike, and proof that their marketing department continues to drive great results for the company.

It also kills the budding sentiment from some quarters that Nike is not a progressive enough brand, considering the noises that were made about their treatment of female employees and diversity in the company. This bit of marketing tokenism will translate into massive goodwill which should drive sales in their core customer demographic for years to come.

Controversy can be great business if you play it right.

Overall, great business from Nike. I’ll wait to see more meaningful impact on their financials before I decide whether or not to buy their stock, but for now, I applaud the brilliance.

They took their own advice, and just did it.



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