Taking a Knee on Social Activism: Nike Runs a Reputation Risk
Nike’s most recent campaign, headlined by Colin Kaepernick with the slogan “believe in something, even if it means sacrificing everything” is the latest in the current trend of corporate social activism by Fortune 500 companies.
In the past few years, we have seen companies such as Dick’s Sporting Goods, United Airlines, and Starbucks—as well as CEOs Tim Cook (Apple), Sundar Pichai (Google), and Jeff Bezos (Amazon)—all publicly take a stand on social and political issues, ranging from immigration reform and gun control to climate change.
But none have generated as big of a controversy as this Nike campaign has, with the hashtag #NikeBoycott going viral and opposers recording their Nike shoes burning up in flames as a form of protest.
By featuring Colin Kaepernick, an unsigned NFL-football-player-turned-activist who was famous for publicly protesting police brutality and racial discrimination in the United States by kneeling during the National Anthem, Nike’s actions mirror what its campaign asks the public to do: take a stand on what you believe in and be bold—no matter the costs.
But has this risk paid off for Nike? And what are the broader implications for other companies thinking about taking a stand on socio-political issues?
Based on initial sales and stock market evaluations, it seems that Nike’s gamble has paid off so far. Just after the ad was released, from September 2-4 online sales of Nike gear jumped 31%, nearly double the company’s sales during the same period last year.
As of September 18th, Nike’s stock price was trading at an all-time high of $85.10. Short-term success notwithstanding, Nike’s continued public involvement in issues of social justice — including racial and gender inequality and freedom of speech — is likely to have lasting implications for the company’s reputation-at-large.
But how has Nike's reputation been affected by the campaign?
To further investigate the implications of Nike’s campaign and the General Public’s view on corporate social activism, we conducted a RepTrak® survey between September 7 and 10, encompassing a study of 400 people in the United States who are familiar with Nike.
Reputationally speaking, our findings from the research indicate the campaign has exposed Nike to elevated reputation risk. As shown above, Nike’s overall reputation has dropped 16.8-points since January of 2018, from an excellent score of 82.1 to an average score of 65.3. Conversely, a decline in public support has followed suit. But why and how? We have identified two key drivers of reputation decline:
- The campaign’s message is polarizing and negatively impacting Nike. Nike’s reputation is much lower (61.6) among a majority of respondents who are familiar with the campaign, as compared to a minority who are not familiar with it (77.6). This polarization has been the catalyst for Nike boycotts and sneaker burnings. As an indicator of the recent polarizing impact of the campaign — relative to early 2018 — the percent of respondents who categorically refused to support Nike has more than tripled.
- People are uncertain as to whether companies – such as Nike – should take a stand on political and socio-economic issues. As shown in Figure 2, the majority of respondents are “fence-sitters” (meaning neutral or unsure) on whether they want companies to take a stand on social and political topics — and about a quarter are strongly against it. Together, they rate Nike's reputation as a weak score of 58.6. Conversely, those who desire for businesses to take a public position on social, economic, or political topics are more likely to find Nike more reputable (85.3), however, these people represent an overall minority, of only 24% of respondents.
But has Nike's campaign succeeded with its core target audience?
Clearly, the definition of everyone is not Nike’s key target audience — Millennials would seem to be more likely the company's strategic focus. Among those familiar with the campaign, Millennials view Nike’s reputation more positively than non-Millennials, rating its reputation in terms of strong 72.2 vs. weak 55.8.
However, Nike’s reputation score for Millennials has also declined 10.1-points since January, from an excellent score of 83.0 to a strong score of 72.9. It is for many of the same reasons as identified for the General Public: varying degrees of alignment vs. misalignment with the campaign's message and varied opinions on whether companies should engage in corporate social activism.
More specifically, half of Millennials do not identify with the values of Nike’s campaign— only 51% strongly do. This is all causing Nike’s reputation score to decline among Millennials, as those who strongly align with the campaign rate Nike with an excellent score of 83.7, while the rest rate Nike at an average score of 60.2. In addition, Millennials are truly on the fence as to whether they want companies to take a social or political stand-- only 29% say they strongly do. Here again, the polarization within Millennials contributes to Nike's reputation decline, as the 29% of Millennials who want companies to take a more activist role rate Nike an excellent score of 86.3, while the rest only give Nike an average score of 67.5.
The only subset of Millennials who disproportionately attribute Nike with higher reputation scores — and who also see a stronger value alignment with Nike — are African Americans. African American Millennials are much more likely to endorse the campaign’s messaging and view Nike’s reputation more favorably: 91% of African American Millennials strongly agree that their views align with the campaign’s messaging — and they give Nike an excellent reputation score at 89.7.
Is it all worth the risk for Nike?
- First off, whether you align with the values that underscore the Nike campaign or not, you have to applaud the courage of the company for taking a stand on such an important issue.
- Secondly, on the merits of the initial sales numbers and stock price performance, the campaign has indicated some economic success in the short term for Nike.
- Thirdly, on the premise that “any publicity is good publicity” the media attention alone for Nike has been significant, and it has put the company back at the center of the cultural narrative.
- But finally, you do have to wonder as to whether some of the negative backlash from among the General Public will inhibit Nike’s reputation in the future. Perhaps that is the yet-to-be-determined unknown risk.
Implications for Other Companies Thinking About Social Activism
Nike’s experience provides key lessons learned for other companies considering aligning their brand with positions on social, economic, and political issues. Here are the key questions that companies might consider asking:
- Does a stance on a social-issues align with your company’s corporate brand purpose? An issue that aligns your values with your stakeholders, has a greater chance of success.
- Who is your messaging going to appeal to vs. alienate? Companies must engage in a careful risk/reward calculation to assess risk and to determine if it’s worth it.
- Will the issue have relevance for the long-term and will it put you on the right side of history? Taking a stand can create conviction, but it has to be more than just a short-term polarizing headline creator.
Do you think the risk for Nike was worth it?
We welcome your comments.
Sven Klingemann, Ph.D.
Global Research Manager