By now, most everyone is aware of Nike’s high-profile shoe failure during the nationally televised Duke and North Carolina basketball game. How Nike handled the national “shoe blowout” truly demonstrated why brand reputation is such a valuable asset.
Let’s recap. Everyone anticipated a great game, and the opportunity to see Zion Williamson display his skills. To put everything into perspective, at $2,500 the ticket resale price for that game neared that of Super Bowl tickets, and ESPN’s ratings for a single game were the third highest since 2002.
Exactly 36 seconds into the game the unimaginable happened: Zion Williamson’s shoe blew out. He twisted his knee and had to leave the game. You could hear a pin drop in Cameron Indoor Stadium as all attention turned to Zion and his shoe. My immediate thought was, “What brand of shoe does he wear?” And secondly, “I hope he’s not hurt.”
Twitter lit up with the typical jabs from fans and other shoe brands as ESPN played the “blowout” event over and over to show the moment of shoe failure. It was a brand’s worse nightmare. In fact, the Apex Marketing Group estimated the shoe failure resulted in approximately $12 million in negative publicity.
Even worse, Nike’s stock fell 1.8 percent and lost approximately $1.5 billion in stockholder value the next trading day. On February 21, the day after the game, the stock fell to $83.25. Today (March 5) the stock was trading at around $87 and at a 52-week high.
So how in the world did Nike not only survive the incident but appear to have benefited from it?
Nike’s response was classic crisis management. First, it responded incredibly fast with the appropriate level of concern over Zion Williamson’s well-being. Second, it portrayed the failure as isolated; after all, the brand holds a 95+ percent share of the basketball shoe market, and few shoes have ever been known to fail. Third, the company met with Duke officials the next day to better understand why it failed and how it might be prevented in the future.
This scenario underscores the importance of how products are different from brands. Products exist on a retailer’s shelf; a brand only exists in the consumer’s mind. Products deliver functional benefits that can become outdated and change over time. Brands, after establishing a dialog with the consumer, can endure indefinitely.
Bottom line, the Nike brand’s strong relationship and ongoing dialog with its consumers enabled the company to place the product failure incident in proper context and move on with little or no impact to its brand. In fact, Nike turned the high visibility incident into a positive by living up to the consumer’s expectations when handling it. Truly, brand reputation at its best! Check out the services we offer to help develop your brand from strategy to implementation.