Are Nike’s sales up, post Kaepernick?
The headlines certainly indicate it—for example, this article in Fortune, with the headline “Colin Kaepernick Campaign Gives Nike a Big Sales Boost” is rather typical. But looking at several of these articles, I noticed that only sometimes do their headlines also mention what all the articles indicate in the main text, which is that they’re talking about online sales rising:
Nike’s selection of Colin Kaepernick as one of the new faces of the company has certainly brought media attention and controversy, but it’s also having a noticeable effect on the bottom line.
A new report from Edison Trends says Nike’s online sales grew 31% from Sunday through Tuesday of Labor Day weekend this year. That’s notably better than last year’s 17% seasonal increase.
“There was speculation that the Nike/Kaepernick campaign would lead to a drop in sales but the data does not support that theory,” the company said in a statement.
And then the article adds this:
The report does not factor in brick-and-mortar sales.
So what does the news actually mean? We know that the stock has dropped—that news is in the public domain—but what of the sales in general? The company would obviously prefer that investors and the public think that sales are up overall, but they’re not reporting the data on that.
I don’t know. But I bet Nike does.
So, who buys Nike shoes online? And does most of Nike’s online sale activity consist of selling shoes, or is other gear prominent? If it’s mostly shoes, are the majority of those sales to repeat customers who already buy Nike shoes? After all, don’t shoes usually need trying on, unless it’s a replacement pair? So, does this online surge represent people who already support Nike deciding this would be a good time to reorder?
I don’t know. But I bet Nike does.
One thing I researched just now is how much of Nike’s sales occur online compared to the company’s sales as a whole. I found this data from last year:
Nike Inc. continues its big growth curve on the web. The footwear giant says it reached $2 billion in annual online sales in its most recent fiscal year, or 30% more than the year prior and double the amount of two years ago…
To reach its goal of $7 billion in online sales by 2020, Nike is working on several companywide initiatives in Nike stores, via its mobile apps and through other channels to reach consumers with its products in a more direct and personalized way…
The brand is focused, for example, on building customer retention through personalized features of its mobile apps, increasing membership to its Nike+ loyalty program (most of whom interact with Nike via its mobile apps), and providing those members with perks that keep them coming back to purchase Nike products from Nike directly.
So we know that Nike has been steadily building its online sales, and many of its customers online are repeaters, and one would have expected that online sales this year would exceed online sales last year at the same time.
So, what percentage of Nike’s business is in online sales (online sales through the Nike site are more profitable for the company than brick-and-mortar sales, by the way, according to the article)? Here’s the answer, at least from a year ago:
For fiscal 2017 ended May 31, Nike reported: Total sales of $34.35 billion, a 6.2% increase compared with $32.34 billion last year.
So Nike’s online sales last year were about 6% of the whole.
We still don’t know what really happened—or will happen over time—to Nike’s bottom line as a result of the Kaepernick campaign. But so far the media isn’t helping us learn all that much, nor is Nike.
[NOTE: By the way, apropos of almost nothing, I couldn’t help but notice that Kaepernick’s last name is almost the same as that of the astronomer Copernicus. “Copernicus” was a Latinized version of the scientist’s birth name, which comes from “a village in Silesia near Nysa…[which] been variously spelled Kopernik, Copernik, Copernic, Kopernic, Coprirnik, and today Koperniki.” Or, I would guess, Kaepernick.]
Neo,
You have once again cut to the meat of the issue. Online sales vs. total sales; online sales of shoes vs. total online sales and one last point which you imply but do not directly address, percentages vs. actual numbers.
You note in the quotation that Nike’s online sales are about 2 billion, and your note the proportion of online to total sales, but we have no idea what percentage of those 2 billion online sales are shoe sales. If, by way of argument ad absurdum, only 1 million dollars of online sales are shoe sales and online shoe sales are up 31% that’s not even an accounting error in a 34 billion dollar sales report. About the only surety we have is that we know companies cherry-pick statistics to make them look good.
I’ve always said that when someone argues with percentages look at the numbers; when they argue with numbers, look at the percentages; you are doing that here.
Furthermore, when businesses make decisions like the Kapernick decision there seem to be two futures; the first is that people react and permanently refuse to support such a retailer (ESPN and the NFL, at least so far); the second is that people react but then eventually forget about it and return to prior buying patterns. It will be interesting to see where this goes for Nike.
American football is ranked as the tenth most popular sport in the world, with the bulk of its fans in America. The NFL opener a few days ago again saw a drop in audience share for the fourth year in a row. Kapernick’s disrespect for America must certainly contribute to the NFL’s losing popularity here, and I’d expect its sales were likewise mostly affected in America.
However, Nike’s sales are world-wide. It seems that much of the rest of the world dislikes our patriotic President. Thus, many people in the rest of the world may regard Kapernick’s disrespect for America as somehow “heroic,” and support his grandstanding by purchasing $300 shoes . . . made in sweatshops.
T on September 8, 2018 at 1:42 pm at 1:42 pm said:
Neo,
…
I’ve always said that when someone argues with percentages look at the numbers; when they argue with numbers, look at the percentages; you are doing that here.
Furthermore, when businesses make decisions like the Kapernick decision there seem to be two futures; the first is that people react and permanently refuse to support such a retailer (ESPN and the NFL, at least so far); the second is that people react but then eventually forget about it and return to prior buying patterns. It will be interesting to see where this goes for Nike.
* * *
Or as has been said,* “There are lies, damned lies, and statistics.”
The second graf presents another testable hypothesis, which used to be unusual in the social sciences, but we seem to get a new one everyday now.
Be interesting to see how it plays out.
*The origin of the maxim is unknown, but often attributed to Mark Twain.
Regarding “taking a knee”, a visual malapropism:
A great irony which I have not seen addressed is that, historically, taking a knee has been a sign of respect.** Traditionally one genuflected on the left knee for secular rulers/events but on the right knee for sacral rulers/events. So, unbeknownst to himself, Kaepernick uses a traditional form of respect as a form of disrespect even implying (right knee) that the flag has a sacral nature.
It reminds me of Lanie Kazan’s character in the film My Favorite Year as she welcomes visitors to her home which she calls her “humble chapeau.” I know Kaepernick identified his act otherwise, but it just goes to show how unsmart and absurd these self-invented actions can be. We need to start laughing at these people long and hard.
_______
**The custom of genuflecting — as a sign of respect and even of service — arose out of the honor given to medieval kings. Remember how knights go down on one knee (the left) as they are knighted? And even today, when the folded flag of a fallen veteran is offered to the family — the presenting officer will go down on his left knee, if the recipient is seated.
https://www.thecompassnews.org/2011/03/genuflection-which-knee-is-which/
https://en.wikipedia.org/wiki/Genuflection
Nike is another of those products that I almost wish I bought, so I could quit buying it.
I never buy Nike. I have always thought that they were too big; too arrogant. There are other options; e.g., New Balance.
If my mind had not been boggled long ago, it would be boggeled at the idea that Kaepernick would be a cultural icon.
Interesting in the context of the Kaepernick saga. This morning I was in the company of a wonderful woman; a dear friend and associate of my daughter. She is a Physical Therapist who travels to the worst areas of the world to minister to those in pain. Her most recent project is to the war torn areas of The Ukraine. On the subject of diversity, I opined and she agreed, that Americans who bleet (my word) about lack of diversity are fairly ignorant. Much of the world is still essentially tribal, wherein the concept of diversity is binary; i.e., “us against them”. Too often the corollary is “kill them before they kill us.” This whole Kaepernick bruhaha is a joke; a bad joke.
I suspect that much of the online increase in sales were by virtue signaling liberals.
If true, that N. Korean factories are reportedly churning out Nike apparel is irony writ large.
This is a sad story for Americans who follow track because Nike was co-founded by the legendary track coach, Bill Bowerman, at U Oregon.
Bowerman designed custom shoes for his runners, sometimes ruining his wife’s waffle irons by baking waffle patterns into the shoe soles. These shoes became the early Nike products.
There is no question of Bowerman’s patriotism. He had been in ROTC and the Army Reserve. After Pearl Harbor he enlisted as a 2nd Lieutenant. He served in WW II and left the service as a Major with the Silver Star and four Bronze Stars.
I can’t imagine Bowerman (RIP 1999) would approve of Nike’s endorsement of Kaepernick.
For a taste of Bowerman see the film “Without Limits” about Steve Prefontaine, another American track legend, who was one of Bowerman’s runners at Oregon. Donald Sutherland provides a wonderfully salty performance as Bowerman.
https://www.youtube.com/watch?v=In28C2aRJmE
Huxley,
Another film was made around the same time called ‘Prefontaine’ with R. Lee Ermey as Bowerman. And it was filmed on the campus of my dear old alma mater.
Griffin: Ermey was good as Bowerman too. I’ve forgotten which film I thought was better.
Sadly both films, though well-reviewed, bombed at the box office. I guess it’s hard to get people into a track film, though “Chariots of Fire” worked.
huxley on September 8, 2018 at 10:28 pm at 10:28 pm said:
…though “Chariots of Fire” worked.
* * *
It was the British & Scots accents.
‘It was the British & Scots accents.’
And Vangelis. That scene of the running on the beach with the New Age music has been parodied so many times that for most that’s all that’s remembered from the film.
AesopFan: The Vangelis soundtrack had its place too. The album was a bestseller all over the world.
I have worn Nike running shoes for many years. I will never buy another pair. Tonight, as I was shopping at Kohls, I picked up several items, realized they were Nike and put them back. I’m sorry that they decided being publicly political was more important than creating good products and good customer relations with all of their customers. Adios Nike.
A lot of people buy shoes online now, a big factor has been easy returns.
The Nike thing will fade into obscurity. I just feel sorry for the white adoptive parents who raised this racist kid. I still think it is the black power girlfriend.
Like the NFL, Nike will take a hit in the US, so the question is to what extent overseas sales will neutralize that drop.
Nike’s US revenues are about half of their total, so it will hurt. However, Nike’s international revenues are growing faster, so perhaps Nike is playing to the long-term. I doubt Kaepernick is that much of an incentive for foreigners.
When I boil this down, it looks like corporate virtue signaling. I don’t think Nike will pay a high price for it.
https://www.statista.com/statistics/241692/nikes-sales-by-region-since-2007/
Has anyone melded the two “top” stories and done a Spartacus Nike ad?
>I suspect that much of the online increase in sales were by virtue signaling liberals.
A lot of Jim Carreys.
I have purchased Nike in the past because I liked the look and the fit.
I will no longer purchase Nike but from what I read, I am NOT in their demographic profile.
I think Nike could have made a much better choice to promote their products.
Ron Leven on September 10, 2018 at 1:31 pm at 1:31 pm said:
I think Nike could have made a much better choice to promote their products.
* * *
Understatement of the year.
Remind me not to sign on with this marketing company.
https://www.inc.com/emily-canal/nike-colin-kaepernick-job-market-unemployment.html
“Nike’s decision to hire Colin Kaepernick for its latest ad campaign has triggered plenty of strong feelings: While some consumers have boycotted the company’s products, the move has also induced an outpouring of support from other athletes and renewed adoration from fans.
In other words, the arguably risky hiring bet worked.
Nike selected Kaepernick for the 30th anniversary campaign of its “Just Do It” slogan, not only because of his impressive career in the National Football League, butalso because Nike wanted to embrace Kaepernick’s moral and ethical values. The campaign’s slogan–“Believe in something. Even if it means sacrificing everything”–highlights Kaepernick’s kneeling during the singing of the national anthem before NFL games to protest police brutality, an act that cost him his job as an NFL player. Nike was already the subject of an ongoing controversy involving former female employees who have sued the company over pay discrimination and a lack of promotion opportunities for women.
Sharing moral and ethical values with employers is increasingly on the minds of job candidates today, experts say. “
ICYMI or ICYMT as the case might be.
https://www.rollingstone.com/culture/culture-features/colin-kaepernick-controversy-nike-call-center-720713/
http://thehill.com/blogs/blog-briefing-room/news/405864-georgia-college-stops-using-nike-apparel-over-kaepernick-ad
https://www.breitbart.com/big-hollywood/2018/09/11/mike-rowe-nike-shouldve-honored-9-11-heroes-on-flight-93/
“Rowe dismissed the praise of Kaepernick, arguing in a Facebook post that if Nike wanted to “put someone’s face on a billboard – someone who epitomized bravery and sacrifice,” it should’ve chosen Flight 93 passenger Tom Burnett.”