Nike Ad Spurs 61% Rise In Sold-Out Items

Sep. 20, 2018 2:53 AM ETNKE1 Comment
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Lipper Alpha Insight

By Jharonne Martis

The latest Nike (NKE) commercial featuring its new spokesperson, NFL player Colin Kaepernick, has caused an explosion of reactions on social media. Some of Nike's customers are upset, have taken to social media and have gone as far as destroying their Nike gear. Meanwhile, other customers are supporting and embracing the campaign.

Recent stories say that Nike's sales are stronger this year than last. However, most retailers' sales are stronger this year. What would really tell us the direct effects of the campaign is how things significantly changed since it was launched.

Although the initial ad might have caused negative reaction among investors, Nike maintained its product pricing structure, offered less discounting and sold out of 61% more merchandise since the ad began running. Additionally, its stock is trading at a new high, and StarMine model scores are robust, suggesting the company's operating efficiency looks good. These strong statistics reinforce the notion that Nike is standing firm - and not just in a social context. The company doesn't need to participate in the discounting that tends to plague other retail brands.

Spike in sold-out items

Thomson Reuters discovered, in a collaboration with StyleSage Co., that since the launch of the commercial, there have been some changes on Nike's e-commerce site. For starters, the percentage of shoes and apparel on discount has decreased from 32% to 30% from the ten days prior to the 30th anniversary ad launch versus the 10 days following. The average discount did not change at all. The average discount of all products is only 8%. Nike generally doesn't do the discounting traditionally seen in other channels like department stores, because it doesn't have to.

What's more interesting is that the number of products sold out in the 10 days before the ad came

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