Nike’s online sales jumped 31% after company unveiled Kaepernick campaign

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Talk of Nike Inc. sales taking a hit from the company’s decision to put ex-NFL player Colin Kaepernick at the center of its latest “Just Do It” campaign is looking overblown, based on data from a Silicon Valley digital commerce research company.

After an initial dip immediately after the news broke, Nike’s NKE, -0.07%  online sales actually grew 31% from the Sunday of Labor Day weekend through Tuesday, beating the 17% gain recorded for the same period of 2017, according to San Francisco-based Edison Trends.

“There was speculation that the Nike/Kaepernick campaign would lead to a drop in sales, but our data over the last week does not support that theory,” said Hetal Pandya, co-founder of Edison Trends.

Nike’s stock has also held up after its initial slump. The stock was up 1% on Friday and remains in the black for the month. It has gained 29% in 2018, while the Dow Jones Industrial Average DJIA, -0.53% which counts it as a member, has gained 5% and the S&P 500 index SPX, -0.33%  has gained about 8%.

The news generated plenty of online buzz, with social engagement around Nike and Kaepernick rising sharply this week, according to 4C Insights, a marketing technology company. Mentions of and comments about Nike on social-media platforms rose 1,678% on Sunday and Monday, according to 4C data. Mentions of Kaepernick spiked 362,280%, the data showed.

The athlete has become the face of player protests against racial injustice and police brutality, since he started kneeling during the national anthem, inspiring others to follow suit. The action has irked President Donald Trump, who weighed in on the Nike campaign in a series of tweets this week.

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That didn’t deter Nike from airing its first TV ad of the campaign on Thursday that was narrated by Kaepernick and included appearances from other high-profile African-American athletes Odell Beckham Jr., LeBron James and Serena Williams. The ad urged people to follow their dreams and ignore the naysayers.

“Calling a dream crazy is not an insult,” Kaepernick says in the new Nike spot. “It’s a compliment.”

To be sure, Nike has taken some flak from customers who oppose the NFL player’s actions. Sentiment toward the brand dropped 38% on Sunday and Monday according to 4C, but it’s not all bad news.

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Nike’s most engaged audience persona is “Made it and Know it,” said 4C Chief Marketing Officer Aaron Goldman, one of 70 categories of consumer that 4C has identified by analyzing social media engagement on a range of platforms. People in that bracket are generally successful in their careers and personal lives, are typically single with a robust social life and like to spend money on entertainment and travel, as well as online streaming services.

“Racial equality is a top concern for this audience, along with causes like clean water access and gun control,” he said.

Sentiment toward Kaepernick actually improved by 40% this week, he said.

“You can be darn sure that Nike has done its research and knows what will move their product and who this campaign will resonate with,” said Goldman. “They are the ones they have decided will be their future customers, so if others are getting upset, they have planned for that, and they don’t care.”

Daring to take a political stand has become a new paradigm for brands, as they seek to connect with the younger generation and changing political views, said Goldman.

“A company like Procter & Gamble PG, -1.37% that makes products for everyone from young to old, male and female, are not going to do something controversial that might alienate half their audience. But a company like REI can take a stance on national parks, because they know that is really important for their customers.”

Outdoor pursuits retailer REI was one of the companies that hit back against Trump’s executive order late last year that would dramatically reduce the size of two national monuments in Utah.

Read also: REI rolls out first-of-its-kind sustainability requirement that will affect every brand in its stores

Oppenheimer analyst Brian Nagel commended Nike for its “more edgy, risky” campaign, while refreshing the “Just Do It” slogan, which is now in its 30th year.

“The extensive roster of athletes and their powerful stories are core to the company’s stepped up efforts in reaching a younger demographic,” Nagel wrote in a note earlier this week.

The Kaepernick campaign “is clearly an effective way to make some noise in the industry, regardless of any political bent. Over time, for Nike, we think the power of the messaging from this new broader campaign is apt to overshadow any potential backlash, near term, in our view,” Nagel wrote.

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