Do Sneakerbots Dream Of Wearing Shoes?
Kayne West was characteristically candid when he and Kim Kardashian-West sat down with Harper's Bazaar in the summer of 2016.
"I want to say a controversial thing for this article," cautions West. "What designer on the planet can sell, consistently, 40,000 shoes. In two minutes?"
Kardashian-West interrupts: "One minute."
West's reveal wasn't just confirmation of the long-rumored notion that Adidas kept Yeezy Boosts in impossibly short supply. For sneakerheads, it was proof of another long-rumored notion they held: If 40,000 pairs of sneakers are selling out in less than sixty seconds, the casual sneaker fan is never going to beat the bots.
The streamlined shopping experience and seemingly endless availability of sizes that comes when browsing for a regular sneaker on Nike or Adidas websites? You can throw that right out the window with limited releases. Think of the hundreds that line up in front of a store on a drop day. Now picture that crowd on a global scale, all logged in at the same time, all just a keystroke away from a comically small number of hyped shoes.
Even for the most experienced and logged-on sneakerheads — the ones who memorize and practice entering their billing and shipping information on multiple websites — online shopping can be clunky and take upwards of a minute. And a minute can be all the difference between paying a few hundred dollars for a shoe when it first comes out and paying more than triple that on the resale market just minutes later.
This is where sneaker-buying bots come into play. For the original sneakerhead now getting squeezed out by the machines, bots offer a better chance of being able to continue to participate in a culture they helped build.
Bots are as controversial as they are crucial
Bots automate the purchase process by pre-loading a buyer's shoe size, and billing and shipping information, allowing users to fast-forward directly to checkout the second a shoe drop happens without being slowed down by human fumbling. (Yeezy's are decidedly not for fumblers.)
But bots are as controversial as they are crucial. As they become more common, sneakerheads complain that it's resellers who are using bots to buy as many shoes as possible, just to turn around and flip them on the lucrative, white-hot sneaker resale market.
The secondary shoe market has been growing ever since Nike dropped the Air Jordan I in 1985.
For collectors, it's generally the place to go to scoop up limited editions, retros and that pair you weren't able to buy in store. But it's also a byzantine marketplace, littered with official retailers, independent shoe stores and individual dealers, who sell everywhere from in person, to Twitter, to Instagram. The curation of a sneakerhead's collection used to be derived almost entirely from the strength of their shoe network, until the last few years, when the resale marketplace began to see explosive growth.
Sites like eBay and Craigslist first brought the secondary market to the internet, allowing anyone to flip shoes both locally and afar. But with those sites came combing through hundreds, even thousands of disorganized listings, little to no guarantee of authenticity and as kicks became even more popular and lucrative, increased incidences of violence.
Resale apps like StockX and GOAT, launched in 2016 and 2015 respectively, streamlined the shopping experience and authenticate all shoes sold through their marketplaces, making it easy for anyone to sell a shoe, or locate the one they'd been searching for, without the chaos of having to queue in line or trawl through multiple vendors — all at a significant markup.
GOAT and StockX claim to offer a better shopping experience, an antidote to the usual run-around of using Nike or Adidas apps, waiting in line, entering raffles with smaller stores, and using the services of individual buyers. They must be doing something right: This year the sneaker resale market became a $1 billion industry and is still growing.
But that growth has done little to mitigate the soaring prices of limited edition shoes on the resale market. If anything, it's only contributed to the problem. As more limited releases become prohibitively expensive, the calls for better bot regulation grow louder. But what if the problem isn't the bots at all?
Sneakerheads who grew up in an age without iPhones can tell you
legendary tales of the capers they've undertaken in search of just the right
shoe — everything from queuing up outside of stores for hours and driving
hundreds of miles to buy a shoe sight unseen to scouring local newspaper ads
and building an analog web of fellow sellers and swappers. Buying a shoe was
difficult but it was also inherently rewarding; being an avid sneakerhead was
as much about the camaraderie and collection process as it was about curating your closet.
As sneaker culture grew, so did the ways to purchase shoes. In addition to official retailers, hundreds of third-party shoe stores, ranging from national chains like Finish Line to independent retailers like Flight Club, also sold sneakers on drop days, the latter of which were able to take their own businesses global as software systems like Shopify made it easy for boutique sellers to sell online and in-store at the exact same time.
But if older collectors have their walking up a hill in snow both ways tales of how they bought shoes without the internet, today's sneakerheads' stories sound more like trying to swim to school in a hurricane.
While social media has brought fans together, it's fueled the hype machine in ways Nike never could have imagined when they first started limiting their Jordan releases. Brands like Nike and Adidas have tried a variety of ways to make drop day releases more equitable online, through apps like Nike's SNKRS and Adidas' Confirmed. Third party sellers without the resources of a Nike or Adidas have had to get creative to control in-store crowds; many use a raffle system to sell off the small quantity of pairs they stock, leading resourceful fans to monitor any number of smaller outlets across the globe on social media for whispers of a chance to enter the raffle.
For longtime fans, shopping on a marketplace like GOAT may feel like an unavoidable eventuality
Being able to shop online did little to fix the problem. Sneaker drops still operated on limited supply, and now there was an entire world of shoppers with internet connections to compete with, which is where bots entered the picture. As Lauren Schwartzberg reported for Wired, one of the earliest sneaker bots was crafted by a Houston-based collector, who had lost out on a pair of Air Jordan Doernbechers in 2009 to savvier social media users when Nike was experimenting with a Twitter reservation service. For the next Jordan drop, the collector went on to write his Twitter bot that would auto-reply to any Nike tweets about the upcoming release, effectively sending "hundreds of DMS in a tenth of a second."
Bots quickly went mainstream, with tech-savvy collectors selling everything from $10 browser extensions to standalone programs, like Another Nike Bot, that cost upwards of $300 and offer users all sorts of tricks to game the checkout system — pre-loading customer information ahead of time, automatic CAPTCHA bypassing and using multiple IP addresses to allow for more purchases. Some even claim to have servers closer to major shoe retailers' headquarters, allowing for faster processing speeds by the millisecond.
In
their origin story, bots were ostensibly a tool for sneaker obsessives to level
that incredibly vast, wildly fragmented playing field. A $100 bot for a $200
shoe might seem excessive in the micro, but pay off handsomely in the long tail
of growing a collection. They were a tool to help fans avoid in-store violence,
while also contending with the increased competition that had come from
e-commerce. But they also were a tool for resellers, many who could, and would,
run bots on as many retailer sites as possible to maximize their haul.
"Very quickly the sneakerhead world went from collecting for fun to profiteering," says Matt Powell, NPD Group's sneaker industry analyst. "As resale prices escalated on limited edition shoes, a new type of sneakerhead came into being: the speculator. Looking merely to make a quick buck (or hundreds of quick bucks), many more buyers got into the game with the sole intent of flipping limited edition shoes, sometimes on the same day they bought them."
As the resale market grew more lucrative, it also took a more solid form. Individual resellers built social media followings to broaden their customer base, while online consignment — previously the unregulated domain of eBay and Craigslist — became more of a primary shopping experience, rather than a drop-day-gone-awry backup plan. Brick and mortar consigners like Flight Club and Kith expanded their online operations, while markets like GOAT helped individual sellers hawk their wares in a single, centralized location, allowing sneaker fans to view a much larger selection to purchase from, with a guarantee of authenticity.
For longtime fans, shopping on a marketplace
like GOAT may feel like an unavoidable eventuality. But for newer sneaker fans
who haven't learned all the ways to shop for a shoe, or the people in their
lives who want to buy a shoe for them, these marketplaces have brought the
intended online shopping experience back to limited sneakers. And to them, that
is worth paying a premium for.
Consigners like Flight Club and GOAT let sellers set their own prices, though unlike Ebay or Craigslist, they also serve as the point of sale, rather than just the marketplace. In exchange for facilitating the transaction and authenticating the sneakers in question, they take a commission of the sale — in the case of Flight Club, 20 percent. While sellers' shoes have to be verified prior to being listed, how sellers obtain those shoes — with bots or without — is of less importance.
It's hard not to draw comparisons to the concert ticket industry
As the contours of the sneaker secondary market continue to fill in,
competition is fierce. Established brick-and-mortar retailers are
seeing significant growth as they build out their operations online, while newer
sneaker startups like StockX and Stadium Goods boast rosters of celebrity
investors that include Mark Cuban. GOAT recently crossed the
1.5 million user mark in February, booking another $25 million in funding in the process, while competitor StockX closed $6 million from a group of investors that included Mark Wahlberg
and Eminem just a week later. That investment in infrastructure has attracted the
fans, and with it, the sales to match.
When West dropped the
Zebra colorway for his massively popular Boost 350 V2's this past February, lucky
fans who were able to purchase one of the pairs spent $220, plus tax. Shortly
after, they were listed on Flight Club for $1250 to $2500. Even now, almost
eight months since the original drop and four months since Adidas' June
re-release, the Zebra Boosts retail on Flight Club for anywhere from $650 to
$1400. On resale site StockX, which has also fashioned itself as a sort of
stock market for luxury items, the highest a pair of the shoes fetched was
$3072, an almost 1300 percent markup.
Though those sorts of price spikes help
the bottom line of the platforms, markets ultimately thrive on the breadth and consistency of
their inventory – not unlike a shoe company itself.
It's hard not to draw comparisons to the concert ticket industry. There, too, retailers play a Sisyphean game of whack-a-mole against aggressively mutating bots, constantly re-designed to thwart new human-recognition measures put in place. There, too, a comically limited supply drives up costs on the secondary market. There, too, bots shoulder the blame; so much so that Congress has passed legislation against ticketing bots, and America's true president, Lin-Manuel Miranda, has taken to the paper of record to denounce their impact on arts and culture.
A similar tide is rising against sneaker bots. Fan complaints have lead brands to take significantly more defensive measures in their apps, ranging from the expected, like pre-paid reservations, to the dystopian, as was the case with the augmented reality treasure hunts during Nike's recent collaboration with Momofuku chef David Chang. Smaller retailers claim to seek ways to fight back, while viral tales of drop day failure only add to the digital villain narrative that comes with the bots.
But as Vulture
pointed out when dissecting the concert industry's battle with bots, it's not
always the bots — authentically sold tickets can sell out, too.
Transparency,
or a lack thereof, about how many shoes are being released is a major pain
point for collectors in an industry that purposefully limits supply in the name
of exclusivity. StockX CEO Josh Luber estimated in a GQ report that the initial Zebra Boost
release was only 25,000 pairs — almost half of the 40,000 West intimated in his
Harper's interview. While some Air
Jordans release widely, player exclusives and collaborations can see even lower
numbers than West posted with Adidas.
And for third-party sellers, that can mean stores get a meager percentage to stock — as Erik Fagerlind, owner of European consignment store Sneakersnstuff explained to disappointed Yeezy fans, often less than 1 percent of their store's demand. Without more clarity, it can be easy to assume bot usage is widespread; in reality, even with rereleases, like this summer's follow up Zebra drop, sneaker releases can number in the few hundred thousand at best. While smaller retailers like Fagerlind still work to stop bots breaching their backend, the measures can seem futile. When 99 percent of your visitors are going home unhappy for being a minute too late, is it worth fighting the bots in the interest of the 1 percent?
While Nike and Adidas have rolled out measures to stop bots, the cynical perspective persists: That any countermeasures the companies take are half-hearted at best, to placate fans, while still reaping the profits of redirected sales.
Scan Twitter the day of a drop and you'll see no shortage of aggrieved fans disavowing Jordans or Yeezys, or in many cases, Nike and Adidas entirely. But even at the risk of angering a few fans, they still stand to profit handsomely from buyers who couldn't cop a Yeezy or Jordan, but still want to purchase something very similar.
"A
lot of the success and growth [Adidas has seen] in NMDs or Ultraboosts is
[from] people who couldn't get the Yeezy Boost, and say, 'Well, I'll buy a pair
of Ultraboost, then,'" says Daniel Roberts, a sports business writer at
Yahoo Finance. "At least it's in the same world, it has a similar look,
and it certainly helps that Kanye also often wears the regular Boosts, not just
his own Yeezy line."
Consignment marketplaces do
stand to make a tidy profit from sellers who utilize bots. But unworn, or
deadstock, limited edition sneakers can appreciate in value and wind up
back in consignment from a collector long after the initial drop. GOAT, StockX
and their brick and mortar competitors are significantly more dependent in the
long run on building relationships with engaged collectors with deep closets
and providing access to a wide collection of slightly hard to find shoes, than
they are ensuring a single Yeezy Boost in every closet within days of a drop.
Sneakers have firmly moved from collector's item to commodity, no matter the method of purchase
At the same time, reselling across all platforms has become much easier, which has turned even more casual buyers into resellers themselves. Independent sellers, who used to rely on channels including word of mouth and sneaker conventions, can now reach fans through Twitter, Instagram and other forms of social media. Selling your shoes on GOAT is as simple as uploading a photo and waiting for the offers to come in. Shipping is simpler, transactions easier, all lowering the barrier of entry to the world of resale for even the most risk-averse of flippers. The trend extends far past the sneaker industry — as consumers and investors flock to resale platforms like Poshmark and ThredUp, millennials and younger shoppers have revitalized the resale clothing industry to a valuation of $18 billion.
Unlike concert tickets, the afterlife of a sneaker can continue to be increasingly valuable after its initial purchase, which only adds to the allure for an average Joe to get into the reselling game, a trend that some independent sellers are already starting to see more of — as Jason Faustino, owner of NYC sneaker shop Extra Butter, told Complex that nowadays almost a quarter of a typical release at his store is being bought by flippers. And at profit margins like those on Yeezy Boosts, even just a few pairs of shoes earned by waiting in line at a store to buy the max, can earn an average flipper thousands of dollars easily, without necessarily ever having to deploy a bot.
"That's what is so discouraging about the sneaker market right now, is that there are multiple layers, where people are buying, then reselling. Or, people buying on a resell site, then reselling again," says Roberts. "It's just a chain of people buying, and turning around to sell and make money again. At what point do you get the person that actually appreciates, and wants to wear the shoes?"
Perhaps that's what's most disconcerting at all — that sneakers have firmly moved from collector's item to commodity, no matter the method of purchase. Bots may have accelerated that process, but are they more culpable than the internet? Or more culpable than consumerism itself? Hardly. But there's no telling when limited edition kicks will stop holding quite as much value. And there's even less prognosticating about when the things worth having will stop moving further out of reach.
Sneakers stopped being for the average sneakerhead long before the first bot was coded, much like the aftermarket cost of concert tickets grew dramatically with the advent of StubHub. Sneakers aren't as expansive as concerts, though; the shelf life for the kicks craze still hinges upon fashion whims. If and when the demand for sneakers wanes, companies like GOAT will have to fashion their marketplaces to sell more than just sneakers — competitor StockX recently expanded into the larger luxury accessories market — diverting resources away from the original, singular goal of streamlining the sneaker buying process.
Sneaker marketplaces may not disappear forever, but they stand to look very different than what their current rabid fan base craves. Which means that people who care about shoes are the ones with them on their feet, as they run around store to store waiting for the next drop.
