Nike recently made the decision to recall its Air Max 1 USA shoe after concern was raised about the Betsy Ross flag on it. Former NFL quarterback Colin Kaepernick, a brand ambassador for Nike, is said to have alerted the company to the flag's use by white nationalist groups.
There was backlash from some while others were surprised to find out the flag was controversial. Still, Nike has seen its sales and stock rise since embracing Kaepernick in a 2018 ad campaign so it is hard to tell yet if recalling the shoe would hurt the bottom line.
Question: Was Nike recalling the Air Max 1 shoes a good business move?
Phil Blair, Manpower
NO: If they had millions of dollars in the shoe in stock so it was a terrible waste of product. It is very unfortunate when a great symbol of freedom like the Betsy Ross flag gets hijacked by a fringe organization. I would have rather had them power through with a patriotic ad campaign and claimed the flag back. Feels like they are paying ransom for a kidnapping.
Kelly Cunningham, San Diego Institute for Economic Research
YES: It was a flawed concept from the beginning. As a Boy Scout, I was taught to not disrespect the flag by allowing it to touch the ground or become soiled, which inevitably happens with shoes. Nike compounded their impertinence by announcing withdrawal of production for facile reasoning that it could be seen as racist symbol. Much like the innocent "OK" hand signal, it is irrational to nullify every signal groups usurp to represent something else.
David Ely, San Diego State University
YES: Nike was in a no-win situation. The company was strongly criticized for its decision to recall the shoes, most notably by the governor of Arizona who withdrew incentives for a Nike plant. However, an even greater backlash may have arisen had Nike chosen to continue with the distribution of the shoes. Now that a few days have passed, it does not appear that Nike's share price has suffered as a result of the recall.
Gina Champion-Cain, American National Investments
YES: Nike knows exactly what it is doing. This consumer brand is a well-oiled marketing machine. It would not be unreasonable to believe that Nike orchestrated the entire Air Max episode to use as a no-cost marketing campaign. Nike understands its market incredibly well, makes few mistakes, and will profit handsomely from the free Air Max coverage. Those upset with the Ross flag pullback are not Nike customers and pose zero threat to the brand.
Alan Gin, University of San Diego
YES: It was a special edition shoe, so it was not likely to generate a lot of revenue and profit for Nike. Although the flag was not on the list of hate symbols compiled by the Anti-Defamation League, the fact that some extremist groups used it leaves open the possibility that there would be negative consequences. Nike has done well since bringing Kaepernick on board, so following his advice on this could help with its target demographic.
James Hamilton, UC San Diego
YES: It's a completely fabricated controversy. I never heard of these hate groups who supposedly use Betsy Ross's flag, and nobody objected to featuring it on the seal of the Veterans Administration or flying it at President Obama's second inauguration. But this isn't about offending people. It's all about branding. Nike has identified its target demographic: young people who want to see themselves as advocates for social justice. Nike just got a lot of free advertising.
Gary London, London Moeder Advisors
YES: They certainly see it as a good business move, and you have to accept their decision given that they brought Kaepernick on as a spokesman, despite backlash. They are target-marketing persons who purchase sneakers at a high premium. This market segment is skeptical of versions of American history that have been neglectful or bleached of blemishes pertaining to this nation's treatment of minorities throughout our history.
Norm Miller, University of San Diego
NO: Talk about political correctness on hyper-sensitive-overdrive! There was nothing wrong with a flag on the shoe, nor is there anything wrong with not buying it. I doubt it would have had much impact on sales unless it was on a great shoe, as no one sees the back of the heal. Recalls should be for E.coli and serious defects or health risks, not reactions to tweets.
Jamie Moraga, IntelliSolutions
YES: As of late, Nike has been taking controversy and turning it into advertising and free press. Whether you agree with their decision on the Air Max 1 or not, Nike must have thought a recall was a good business move or they would have made a different decision. In the end, sales will determine whether it was a good one or not.
Austin Neudecker, Rev
YES: Releasing the shoes knowing one of their primary spokespeople (Kaepernick - who helped revitalize the brand) is vocally opposed to the shoe poses a real risk to the company. Whether or not the connection to racism is real, the current cultural climate is increasingly polarized and precarious. If a significant amount of Nike's consumers refuse to buy shoes in protest, their losses could amount to more than a single shoe edition's gains.
Bob Rauch, R.A. Rauch & Associates
NO: It is clear that Colin Kaepernick is a controversial spokesperson. Nike has done well with him as a brand image during a period when others have done well but at what cost? Why alienate half of America? Lisa Moulder, director of the Betsy Ross House in Philadelphia, said she has never heard of the flag being used as a hate symbol and has always seen it as a representation of early America ... not perfect then or now. I agree with her.
Lynn Reaser, Point Loma Nazarene University
Not participating this week.
Michele Vives, Douglas Wilson Companies
YES: Its decision to pull the Air Max 1 out of retailers is a good business move. Historically, the Betsy Ross flag has not been used by racist organizations but as of 2016 there have been some that have used the flag in their marketing and campaign measures. Any indication of this is reason for Nike to pull the shoe and likely costs them less to do so than a more extreme backlash for not.
Chris Van Gorder, Scripps Health
YES: I'm sure Nike has the marketing studies to prove hiring Colin Kaepernick and pulling the Betsy Ross shoe were solid strategies for their sales demographic, even though President Obama used the Betsy Ross flag as part of his backdrop at his second inauguration. It wouldn't be in Nike's business interests to have a conflict with one of their most prominent, albeit controversial spokespersons. Nike's sales and stock success are evidence that this strategy is working.
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