Earlier this year, Nike wanted a new face for its marketing campaign. Instead of someone safe, it chose one of the most controversial athletes in America, Colin Kaepernick, a quarterback who had knelt during the national anthem to protest against racism and police brutality.
He had been condemned by President Donald Trump and shunned by the National Football League. The reaction to the company’s decision was instant, with some Trump supporters burning their Nike shoes and posting the footage on social media. But within weeks, online sales soared and Nike’s share price reached a high for the year. The controversy generated lots of free publicity for the brand. Two-thirds of its customers are under 35 years old, and young consumers (at whom the ads were aimed) were much more positive about the link with Mr Kaepernick.
Nike’s decision was an example of what has been dubbed “woke capitalism”—the desire for companies to associate themselves with liberal causes. It is a trend that will deepen in 2019. In the past, many companies preferred to keep a low political profile for fear of offending some consumers; in the words attributed to Michael Jordan, a celebrated basketball player, “Republicans buy sneakers too”.
But these days companies find it impossible to keep out of politics altogether. Mr Trump frequently attacks them for making products abroad or for not supporting his agenda. Parliaments haul tech executives in front of committees and lambast them for failing to stop hate speech, terrorist cells or child abuse. In the social-media era, major controversies can flare up within hours.
Big issues, requiring companies to respond, will keep emerging. In 2018 the school shooting in Parkland, Florida, was followed by Delta and United Airlines stopping their discounts for National Rifle Association members. As with the Nike episode, there was a reaction from those on the right, but the airlines held firm. A plan to take away Delta’s tax breaks in Georgia, where the company has its headquarters, was quietly dropped.
Woke capitalism represents a fine line for companies to walk. They have to be sure that their customers are in the right demographic—and they also have to be confident that they can face down political opposition. Individual American states are easy to defy but the federal government or the European Union are another matter. North Carolina dropped a ban on transgender bathrooms after a corporate boycott, but Target lost sales after it publicly supported transgender facilities.
As trade disputes escalate between America and the rest of the world, and as Brexit reaches its next stage, companies will be dragged into political controversy in 2019. Global supply chains mean that multinationals shift components across borders many times. They will face higher costs if they have to localise production and will be tempted to speak out. Few firms will be happy if forced to choose sides between America, the world’s biggest economy, and China, a key part of their supply chain.
And the recent successes of populist parties in Europe mean that cultural controversies will intensify. Potential shortages of workers will cause many companies to campaign for more open migration, at the risk of offending nativist politicians. The prospect of a more conservative United States Supreme Court may drag issues such as abortion and the rights of same-sex couples back onto the agenda.
A corporate campaign that works well in one country might bomb in another. CEOs will need to be as well-briefed on politics as a presidential candidate preparing for a live debate.
