trending Market Intelligence /marketintelligence/en/news-insights/trending/dm31psKCY1uPScfMyXAt3g2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us
In This List

Nike's Colin Kaepernick 'Just Do It' campaign could be a win

Amazon e-commerce sales soar amid COVID-19

Gauging Supply Chain Risk In Volatile Times

S&P Global Market Intelligence

Cannabis: Hashing Out a Budding Industry

Segment

IFRS 9 Impairment How It Impacts Your Corporation And How We Can Help


Nike's Colin Kaepernick 'Just Do It' campaign could be a win

NIKE Inc.'s Colin Kaepernick ad campaign could be a touchdown for the sportswear company as it targets young, city-dwelling athleisure customers, industry analysts said Sept. 4, following the launch of the campaign.

Nike has tapped Kaepernick — the former National Football League player who kneeled before games during the national anthem to protest racial injustice and police brutality — to be one of the faces of its "Just Do It" campaign's 30th-anniversary. Nike will also launch an apparel line with Kaepernick.

The decision immediately garnered protests and backlash from markets and on social media. Nike shares fell 3.16% Sept. 4, closing at $79.60. Videos of protesters burning Nike merchandise and promising to boycott the company trended on Twitter after news of the Kaepernick decision broke. The ad campaign with Kaepernick, who is suing the NFL for collusion, could also complicate Nike's relationship with the league, where it is the official apparel sponsor until 2028.

But Nike's gamble on Kaepernick is likely to pay off in the long-term, several analysts said.

Nike wants to keep up sales momentum in its North American market, largely by capitalizing on the growth of high-margin yoga pants, running tights and other athleisure apparel, said Morningstar analyst R.J. Hottovy in an interview. Athleisure, unlike many retail sectors, is increasingly popular and profitable, he added.

By throwing its weight behind Kaepernick and the more liberal politics he represents, Nike could boost its image with athleisure customers, Hottovy said. Customers who buy the kind of pricey athleisure that Nike wants to sell tend to be young, urban professionals, and those people are more likely to sympathize and support Kaepernick.

"Some people are going to be angry, but frankly, those aren't Nike's most important customers," Hottovy said. "To keep up momentum in North America, Nike's brand needs to resonate with a younger, more upwardly mobile professional who wants to wear fancy yoga pants to work. Colin Kaepernick's story does that."

More customers, particularly young ones, are buying brands that align with their political beliefs, according to a 2017 study by public relations and marketing firm Edelman. Around 60% of millennials are "belief-driven" buyers, compared to 30% across demographics.

Still, retailers generally try to avoid politics to preserve the goodwill of as many customers as possible, Wedbush Securities analyst Chris Svezia said in an interview. However, a well-timed campaign can help a retailer's image, particularly when the company has a well-defined customer in mind.

"Political stances can be profitable if you get them right," Svezia said. "Nike has put itself back in the middle of the conversation in a way that its target customer can really appreciate."

Nike isn't the first activewear company to take a liberal-friendly stance. V.F. Corp.'s The North Face brand, for example, has made a point to support environmental issues.

"Taking those positions has helped The North Face gain a pretty loyal following and a lot of authenticity with its core outdoorsy customer," Svezia said. "In a way, this branding strategy is pretty tried and true."

Nike did not respond to S&P Global Market Intelligence's request for comment.