NKE Nike Inc

By Khadeeja Safdar 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (September 17, 2018).

The Nike Inc. ad featuring NFL quarterback-turned-activist Colin Kaepernick divided American shoe buyers, with some calling for a boycott of the company and others vowing to buy more of its sneakers.

Odds are the activism won't last.

Companies from Nordstrom Inc. to L.L. Bean have faced controversies that prompted a segment of consumers to boycott or stock up on their products. But research suggests the activism fades quickly, and when it does shoppers tend to revert to their previous behavior, leaving the companies no worse or better off than before.

After Mr. Kaepernick's involvement in Nike's latest ad campaign was revealed on Labor Day, investors sold shares, critics torched their shoes and supporters raced to stores. The former Super Bowl quarterback became a central figure in a political firestorm when in 2016 he began kneeling on the field during the national anthem to call attention to racial injustice. Some criticized his protest as unpatriotic.

Kenyattia Hackworth, a 25-year-old track athlete in Mobile, Ala., said she went to buy some Nike gear right after the ad was unveiled and then made a second trip to a Nike store later in the week with some friends, who also purchased clothes and sneakers. "I'm going to wear Nike even more now," she said. "I want to show my support."

For a few days, the ad generated more demand for Nike products at Stadium Goods, which sells collectible sneakers through its website and a store in New York, Chief Executive John McPheters said. "The campaign resonated with a piece of our audience," he said. "I wouldn't say it's made a massive difference, but there was a little bit of an uptick in sales." Foot Locker said the response from the shoe retailer's customers "has been largely positive."

Nike didn't respond to several requests for comment.

Data from a few days later show that the sales pop didn't last long. Online sales jumped for two days, according to research firm Edison Trends, which analyzed email receipts from 3 million users. Sales rose 31% from Sunday through Tuesday, topping the 17% increase in the same period a year earlier, but by the end of the week they declined 18% compared with the peak on Tuesday, returning to around the same level they were before the ad.

Similarly, calls for a boycott came quickly after the ad appeared. Some people defaced their Nike gear. A few schools, including College of the Ozarks and Truett McConnell University, vowed to cut ties with Nike. President Trump wrote on Twitter, "Just like the NFL, whose ratings have gone WAY DOWN, Nike is getting absolutely killed with anger and boycotts. I wonder if they had any idea that it would be this way?"

The reaction, however, cooled down a few days later. Mentions of #NikeBoycott on Twitter and Instagram peaked one day after Labor Day with a tally of more than 203,000 and then fell to less than 1,000 a week later, according to data from Brandwatch, a social-media monitoring company. Nike shares, which had fallen about 3% the day after the ad was first revealed, recovered all their losses and Thursday hit an all-time intraday high of $83.90.

Boycotts generate buzz and can sometimes cause companies to make concessions if the negative attention poses a reputational risk, but there is little evidence to suggest that they have a meaningful impact on sales, said Brayden King, a Northwestern University professor of management who studied the impact of more than 140 boycotts from 1990 to 2005.

"Consumers aren't as consistent with their behaviors and beliefs as we think," he said. "People who say they've boycotted a product might not be in the market for buying that product anyway."

Last year, shoppers promised to boycott L.L. Bean after the company's heiress Linda Bean was revealed to be a Trump donor. The same year, supporters of Mr. Trump called for a boycott of Nordstrom after the department store dropped Ivanka Trump's fashion line. Nordstrom has had three consecutive quarters of comparable sales growth. L.L. Bean doesn't report sales figures as it is privately held.

Nike has a history of making ads that court controversy, including one in 1995 that featured an openly gay, HIV-positive runner.

In recent years, Nike has been battling with Adidas AG and Under Armour Inc. for the attention of young shoppers, who tend to be more aligned with Mr. Kaepernick's cause. In total, 44% of U.S. adults who have bought Nike apparel or sneakers in the past three months fall between the ages of 18 and 34, according to YouGov. The survey firm's research shows that recent Nike customers are also more ethnically diverse than the country's population at large.

By featuring Mr. Kaepernick, Nike is making a long-term investment in its brand, said Dave Cory, co-founder of footwear brand Obra and formerly a product director at Nike brand Converse.

"Adidas had been eating Nike's lunch," he said. "Even if the young kids aren't actively in the market for a pair of sneakers, Nike is back on their minds."

Greg James, a 31-year-old entrepreneur in Newport, R.I., said he replaced his boat shoes with his first pair of Nike sneakers this week. "If they're not going to get support from one side, they should get it from the other side," he said, though he said he would continue buying Nike products only if his new shoes perform well.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

September 17, 2018 02:47 ET (06:47 GMT)

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