Nike and the Kaepernick Effect

Colin Kaepernick loomed large for Nike during its earnings report this week. 

The athletic apparel firm saw its quarterly sales jump 10% year over year, beating analyst expectations, while several investments firms predict Nike will get further sales boosts by featuring Kaepernick, the NFL player who started the kneeling campaign, in the 30^th anniversary ad for its “Just Do It” campaign. The ad not only generated record followers and likes on social media, but also helped send Nike’s stock to record highs. (The ad also inspired several calls by critics to boycott the firm's products.) Divina Gamble, senior client partner and co-leader of Korn Ferry’s nonprofit practice, says the financial impact of the campaign reflects the enthusiasm consumers have for companies that take a social stand.

“People are looking to corporations to reflect their values and be strong leaders around social issues,” Gamble says, pointing to the success of TOMS and Warby Parker, both of which have a buy one donate one to those in need sales policy, as examples. Greater access to information has sparked a push among consumers for transparency and accountability from corporations around environmental responsibility, gender equality, equal pay, diversity and inclusion, and more. 

Caren Fleit, managing director of Korn Ferry's global marketing officers practice, agrees. "Today, consumers expect more from brands. It’s no longer enough to have  a product that performs well or a brand that’s trendy. Consumers want a brand to resonate on a values level If they are going to truly engage with that brand," she says. 

Taking a position on social issues is not without its risks, of course. Gamble says consumers are very quick to sniff out when corporations are trying to co-opt their values and equally fast in pointing it out to others. If firms don’t have a sustainable supply chain, equal pay practices, a commitment to diversity, or protect the environment, then people will find out and tell others.

For Nike, making Kaepernick, who ignited a national debate over racial injustice by kneeling during the national anthem, the centerpiece of its campaign is consistent with its history of advancing social causes, such as promoting women in sports or developing a hijab for athletic competition. Nike CEO Mark Parker voiced support for #BlackLivesMatter two years before the debut of the Kaepernick campaign, for instance.

Though Kaepernick is the narrator and focal point, the ad isn’t solely about him. It features other black athletes such as Serena Williams, LeBron James, one-handed NFL player Shaquem Griffin, and juxtaposes them against images of a female high school football player, a legless boy wrestler, and a guy who lost 120 pounds and became an iron man. The images evoke a feeling of authenticity that consumers can relate to, Gamble says.

Uniting purpose with profit is no longer a movement — it is a business imperative. Research shows that purpose-driven firms are ultimately more profitable than those solely focused on profits. A Korn Ferry study, for instance, found that while purpose-driven consumer-products firms grew their sales at a 9.9% annual clip from 2011 to 2015, their peers averaged only a 2.4% growth rate.

When viewed through that lens, the benefits of Nike’s Kaepernick campaign may last much longer than one month. Or, as Gamble put it, “Nike is playing the long game. In the end it will keep more customers than it loses, and probably earn more new ones.”