Consumers making decisions based on brands’ position on social issues

Posted 2018-11-08

As appeared in The Globe and Mail

On September 3rd, 2018, athletic company Nike released a controversial ad featuring former San Francisco 49ers quarterback, Colin Kaepernick. The former NFL player made headlines after his 2016 decision to take a knee during the U.S. national anthem in protest against racial injustice. The Nike ad features a close-up on Kaepernick’s face with the tagline: “Believe in something. Even if it means sacrificing everything.”

“Nike’s leaders took a risk and gained a larger market share because they chose to make an impact by standing behind a social cause,” says Professor Katherine White, academic director of the Peter P. Dhillon Centre for Business Ethics at the UBC Sauder School of Business. “While the notion of companies supporting causes is not new - think traditional corporate responsibility initiatives - what I think is really cool is that we are seeing a clear trend where brands are taking a side on polarizing social issues. Rather than merely supporting causes that are generally ‘safe’, they are putting their influence where they can make the most meaningful social impact.”

“What’s even more interesting,” says Prof. White, “is that by taking a stand in this manner, brands are taking a risk, but the research suggests this approach resonates with consumers, especially millennials.”

This was certainly true for Nike. Like Kaepernick’s protest, Nike’s ad was divisive, but in the end the move paid off. The brand added more than 170,000 Instagram users and its shares hit an all-time high just days after the ad’s release.

According to the 2018 Edelman Earned Brand study, two-thirds (64 per cent) of the world’s consumers buy or boycott a brand based on their beliefs and a brand’s position on a social or political issue. This means that the success of a business today is dependent on its leaders being aware of their social impact, evaluating the place of business in society, and looking beyond profit margins to incorporate these values into the corporate culture.

“Responsible leadership means moving away from the ‘business as usual’, ‘profit for profit’s sake’ point of view,” says Prof. White. “There are many examples out there where firms are adopting a new mindset, shifting away from pursuing profit at all costs, and instead including sustainability and social responsibility alongside economic pursuits.”