Just burn it! Burn your Nikes!
A little more than a year ago, these phrases suddenly became very popular on social media.
Why? Because Nike launched an ad featuring former NFL quarterback Colin Kaepernick. On face value, a sports star in a Nike ad sounds like par for the course.
But in 2016, while playing for the San Francisco 49ers, Kaepernick started kneeling during the pre-game national anthem, in protest of racial injustice in the United States.
Kaepernick’s actions were highly controversial, with some saying it was disrespectful to the US armed forces. There were protests. Eventually, Kaepernick left his team, didn’t get signed by another, and he later settled a case against the NFL after alleging that he had been blackballed by team owners for his protests.
So, Nike releases the ad in September 2018.
The ad features Kaepernick’s face, staring into the camera, along with the phrase: “Believe in something. Even if it means sacrificing everything.” (Plus, “Just do it,” naturally.)
And let’s just say much hoo-ha ensues, including the aforementioned phrases as hashtags, and videos of people torching their Nike products.
It was a risky move for Nike.
Building a brand around a divisive figure, and wading into the murky world of politics that comes with it? Choosing your values over your bottom line?
It’s bold, but in this day and age, the internet age, that matters. It really matters.
According to the Deloitte Global Millennial Survey 2019, both millennials and Gen Zs, in general, will let their wallets speak for them by supporting companies that align with their values. Further, many say they “will not hesitate to lessen or end relationships when they disagree with companies’ business practices, values, or political leanings.”
Nike isn’t the only company that has taken a stance.
In 2014, US pharmacy chain CVS made the decision to remove tobacco from all its stores. Recently, Larry Merlo, president and CEO of CVS, reflected on making the decision, saying “going tobacco-free was a bold, purpose-led action that significantly impacted” the company’s bottom line, but was the “right decision for [the] brand.”
Ultimately, for both Nike and CVS, staying true to company values hasn’t hurt.
While shares initially dipped in the days after Nike launched the advert, online sales actually rose. In the weeks after, the company saw a US$6 billion increase in overall value, although naturally that couldn’t all be attributed to the ad. A year later, Nike’s stock is still going strong.
As consumers, we have more access to companies than ever before. We can do a Google search for their financials if they are listed. We can see how the CEO interacts with customers on Twitter. If there’s a scandal, we can watch how they react in real-time.
That sort of access gives us power. Power to make decisions in real-time. Power to ask for change. Power to walk away from a company if their values are only written about in their ad copy and not reflected in the business decisions they’re making.
With 42 per cent of millennials in Deloitte’s survey saying they have “begun or deepened a business relationship because they perceive a company’s products or services to have a positive impact on society and/or the environment,” it’s a type of power that can’t be ignored.
And that is the bottom line for millennials.
Until next time.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
The Spaceship Universe Portfolio and the Spaceship Index Portfolio invest in Nike at the time of writing.