Crisis case study: How well did Nike handle ‘Shoegate’?

    

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On Wednesday February 20th, just 33 seconds into one of the most anticipated college basketball games of the season, Duke’s Zion Williamson injured himself as his Nike PG 2.5 shoe burst open during the Blue Devils’ prime-time game against North Carolina.

As reported in The Washington Post, Williamson drove right and tried to spin back left, planting his left foot hard into the floor at Cameron Indoor Stadium. The cloth side of Williamson’s shoe ripped clean away from the foam sole and Williamson slid to the floor clutching his right knee.

One of the biggest stars in college ball left the court and did not return that evening (or in the immediate games after that evening).

By Thursday morning, Nike was feeling the impact of the incident.

The company's stock closed down 89 cents at $83.95 on Thursday, for a $1.1 billion drop in market value.

The sportswear manufacturer also became the target of ridicule on social media labelling the issue ‘Shoegate’.

Commentators were quick to pile on.

The mishap is “a major brand failure” for multiple reasons, brand expert Mario Natarelli, managing partner at the MBLM agency in New York, told CBS News.

So what would you do if you were Nike?

Relatively quickly after the incident, Nike issued a statement to the media: “We are obviously concerned and want to wish Zion a speedy recovery, the quality and performance of our products are of utmost importance. While this is an isolated occurrence, we are working to identify the issue.”

The only problem with that statement – a quick Google search reveals several other instances of Nike shoes failing.

The Wall Street Journal, slightly tongue-in-cheek, set up an article as if it was going to report on Zion’s unfortunate experience with the Nike shoe, only to reveal that this story was about Eliud Kipchoge, a Kenyan runner in the 2015 Berlin marathon whose own unfortunate experience with Nike shoes likely cost him a world record.

In 2016, the Orlando Magic’s Aaron Gordon’s Nike shoe tore open. NBA players Manu Ginobili and Andrew Bogut have also experienced similar malfunctions.

In the past, this blog has praised Nike senior management’s expert judgement in protecting and enhancing the company’s brand image with core customers.

We wrote about the inspired decision to adopt an ad campaign featuring National Football League quarterback-turned activist Colin Kaepernick, who emerged as the face of protests in 2016 when he began kneeling on the field during the national anthem to call attention to racial injustice and social inequality.

At the time, some called for boycotts of the brand and videoed themselves burning their own Nike shoes. Shares in the company sank the day the advertisement was unveiled.

However, Nike got the last laugh. Subsequently Nike sales rose 10% in the quarter following the release of the Kaepernick campaign.  

Many felt that Nike did not show the same astute decision-making in the wake of ‘Shoegate’.

The classic crisis response is that Nike must acknowledge the problem, own the situation, apologize for the problem, discuss the solution, and act with urgency in resolving the problem.

Nike’s off-kilter claim of an ‘isolated incident’ made it appear that the company was not taking full ownership of the situation.

It is still likely that this incident eventually will fade and Nike’s robust reputation and loyalty from core customers will prevent too much damage.

However, the risk is if more Nike customers – especially high-profile individuals or teams – come forward with bad experiences similar to Zion Williamson.

We shall watch the outcome of ‘Shoegate’ with interest!

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About The Author

Mike Hatcliffe is founder and president of The Hatcliffe Group, a reputation, issues and crisis consultancy. Previously, Mike spent nearly 25 years with two of the world's leading PR agencies. Most recently, he spent 10 years at Ogilvy, as managing director of its US corporate practice, and before that 14 years with Ketchum in both the US and the UK. Mike has worked on crisis and reputation assignments with a range of blue chip companies, leaders in their fields, including LG Electronics, Wells Fargo, Carlsberg, Zebra Technologies, CDW, Quintiles, Rockwell Automation, Unilever, Pepsico, Deloitte, Grant Thornton and HSBC.