The Rise of Bots in Sneaker Culture


Introduction

“Beep, beep, beep…,” the alarm goes off, it’s 6:55 am and you are once again trying to hit on the SNKRS app. 7:00 am strikes and you race to enter the draw before going back to bed. After waking up however many hours later and checking your phone, an all too familiar “sorry you were not selected” notification pops up on your phone. Many sneakerheads will sit there and wonder, “I never hit on anything, how is this even possible?” There are two main answers to this question: first, there are truly an insane amount of sneakerheads who all want pairs and second, bot usage across all sneaker sites is at an all-time high. For those that may not know, a bot is a program that exploits the backend of sneaker retail sites to secure even the most limited sneakers. It sounds simple, but bots have gotten to a point where a single person can secure hundreds of pairs on a single release. 


For many of us, bots are the bane of our existence as we strike out on Nike SNKRS, Adidas Confirmed, YeezySupply, Supreme, etc, morning after morning. Personally, I have only won a single SNKRS raffle after about 3 years of consistently using the app. Also, since trying to cop off of YeezySupply.com since I was 16 (I am now 22), I have never once hit. These are only personal anecdotes, but any sneakerhead who is even remotely tapped in with the community knows that this is the norm for the average consumer. Many are fed up with the current state of affairs and members new to the sneaker community may even be confused as to how we got here. Let’s take a look at the pivotal moments in sneaker history that have brought us to a market ruled by bots.


The Growing Market


To understand the rise in bot prevalence, one must first understand the unprecedented growth the sneaker market has seen over the past ten or so years. Of course, there have been extreme examples in the prices of sneakers rising, like the Red October (~16k), Freddy Kreuger (~40k), or the Jordan IV Wahlberger (100k+). However, the extreme examples are not what I am trying to focus on. What is important to the bot narrative, is the overall rise in sneaker sales, direct-to-consumer, as well as the increasing secondary market price of ALL sneakers, whether the numbers are that limited or not. 


Now, even regular, General Release (GR) sneakers will sell out. To put into perspective the sheer amount of sneakers being bought by consumers, most stores can’t even keep all-white AF1’s on the shelf. Let’s look at the growth by the numbers. Nike, the world’s leading sneaker manufacturer, has grown its sneaker revenue sales from $11.53 billion to $23.31 billion, during 2010-2020. That’s over a 100% increase! Establishing an absurd growth in the sneaker market is key to understanding why the bot market has also grown significantly. If average consumers weren’t becoming sneakerheads, the bot community would not stand to benefit nearly as much from the market. 


StockX Launches


The introduction of StockX in March of 2015 forever changed the landscape of the sneaker market. In many aspects, StockX is a beneficial tool to the consumer and the seller alike, yet it also contributes to the bot saturation we see today. Before StockX, the secondary market was dominated by ebay primarily, and a bit by Grailed. Both websites were missing a crucial feature that has made StockX so popular, standardization. By only allowing the buying/selling of deadstock items and tracking price history on a graph, like a finance application does with a stock, StockX created a sense of standardization and convenience never before seen in the sneaker market. The latest real-time price of any sneaker in any size, without having to account for condition, was now at the tips of our fingers. StockX gave sellers a safe place to sell items without having to worry about lowballers wasting their time. It also allowed sellers to keep track of what types of shoes are on the rise in popularity and sense general trends in the market. Needless to say, these tools further opened up the door for resellers, especially ones that do it on a large-scale.


Backdooring


Back in the day, most direct-to-consumer sneaker sales occurred in person at sneaker retailers like Foot-Locker, Finish Line, Shoe Palace, Sheikh, and even local mom-and-pop shops. As sneaker hype and prices began to rise, so did the temptation for store workers/owners to backdoor more and more pairs. For those that don’t know, backdooring is when the workers of a retail store sell the pairs they receive early out the “backdoor.” The workers put a premium on the shoe and pocket the difference between the retail price and whatever they sold the shoes for out the backdoor. Let’s say a shoe retails for $150, the workers might sell it, in bulk, to resellers for $200, then those resellers sell it on the secondary market for $300. With this model, everyone wins, except for the average consumers who wait in line for hours to try and get a sneaker that they really like and want to wear.


The Disappearance of the in-person line


The spike in backdooring was not the only thing that led sneaker giants like Nike, Yeezy, and New Balance to shift their business-plan to online models. Cases of violence and crime taking place at sneaker drops, as well as an increase in online shopping popularity, also played a significant role in the shift. In 2005, at Jeff Staple’s store in NYC, hundreds of people lined up for a chance at copping one of the 150 “Pigeon Dunks.” People started lining up four days in advance and eventually the NYPD had to step in to break up a riot.  In 2011, the Air Jordan XI “Concord” caused a frenzy all over the country. One mall in Indiana even had its doors torn down by people waiting in line for the shoe. In 2017, during the Concepts NYC release of Pharrell’s Hu NMD, several fights broke out, resulting in Adidas cancelling the release. 


This is only a few instances, but the list goes on and on. Bottom line, in-person sneaker releases were becoming increasingly violent as the hype of shoes drastically rose. Sneaker stores are not equipped to deal with large crowds of people and in cases like the 2014 NYC Supreme x Nike Foamposite release, the NYPD stepped in and cancelled the drop altogether. Eventually, sneaker stores and city officials got to a point where they decided moving most releases online would be better for the safety of the community. Thus, in-person releases were, for the most part, cancelled.


Online Releases


Online releases have the benefit of being more inclusive to people who don’t want to or don’t have the time to wait hours in line. In a lot of ways, the online-format, at least originally, benefited the community as a whole. Although, as time went on, the online system started to get exploited as well. Today, almost every hyped sneaker release is an online raffle. This was not always the case. For quite some time after almost everything moved online, it was a first-come, first-served system of purchasing. Meaning that whoever could add the sneakers into their cart and checkout first, would be who was able to actually cop. It didn’t take long for tech-savvy sneakerheads to figure out ways to automate the checkout process. Soon, people were developing bots that could be added as a browser extension and selling them in mass to consumers who wanted to ensure they would get their pairs. 


Before we knew it, releases were being obliterated by bots in mere seconds. To combat this, websites started moving to a raffle-system where you could sign up at any time during a predetermined period, and at the end of the raffle, you would find out if you were selected to purchase the sneaker. As the websites got smarter, so did the bot users. Fast-forward to today and bots have become advanced to the point where they generate thousands of fake accounts, thousands of alternate credit card numbers hooked up to the same bank account, interact with the website thousands of times a second, all while using VPNs so their IP address can’t get banned by the site. The result is an unfair system where average users have an unbelievably slim chance of winning on the hyped releases.


Artificial Scarcity


Earlier in the post, I mentioned how currently, even GR sneakers sell out almost instantly. This is thanks to the bot system creating artificial scarcity. Botting has become so profitable that many people who run advanced bots purchase hundreds of pairs during a single drop, in order to make more money for themselves and cover the high hardware/software costs associated with bots. Since a large number of users are now doing this for every release, shoes are selling out that would not otherwise. 


Artificial scarcity is created through these methods, making it seem like more people want to purchase the shoe than actually do. As is the case in sneaker culture, scarcity creates more demand and when the shoes sell out instantly online, consumers have no other choice but to purchase on the secondary market. It creates a cycle where consumers end up having to pay more than retail so that resellers, who use bots, can line their pockets. Resellers have always been a part of sneaker culture, but bots are giving resellers access to unheard of numbers, making it so that resellers are able to, in part, control the market.


The Future


In 2021, the state of online releases is almost comical with bots eating up 90% of stock in a lot of cases. Not to mention Nike’s VP of North America stepping down last year because of her son’s resale business, which was using his mother’s credit card and bots to purchase hundreds of pairs per release. Since the bot market creates hype, the sneaker companies do not have enough incentive to really fix the situation. Nevertheless, it has gotten to a point where sneakerheads are getting fed up with apps like SNKRS rarely giving normal users W’s. So much so, that executives of major companies are starting to take notice. A report came out a couple months ago that Nike executives are actively trying to make SNKRS drops more fair. They are citing consumers moving to brands like New Balance or other small, independent brands, as a reason why they finally want to overhaul the system. 


Since Nike’s bottom dollar is getting affected, maybe we, the consumers, will start to see some real change that makes the system fair for everyone involved. Earlier this month, US Congress introduced a bill that, if passed, would ban the use of bots to purchase consumer goods. How the government would enforce and regulate this is still a mystery. Given the fact that pirating movies online is illegal and still happens at a high rate, I am personally hopeful that this bill will change anything. For any actual difference to be seen, the changes need to come from the heads of these companies, especially Nike. As of now, most major sneaker companies are complicit in the bot market that dominates the market today. The future of sneaker releases is uncertain, but one thing is for sure, the current system is broken and there needs to be significant modifications for the playing field to be remotely level.

Sources

https://www.complex.com/sneakers/nike-ann-hebert-son-sneaker-resale-scandal-explained/ann-hebert-disclosed-details-nike 

https://www.statista.com/statistics/278834/revenue-nike-adidas-puma-footwear-segment/

https://medium.com/@jblock49_6777/jeff-staples-oral-history-of-the-2005-nike-sb-pigeons-riot-in-nyc-446f518a7fe3

https://www.gameinformer.com/2021/12/01/new-us-congress-bill-could-ban-bots-used-to-purchase-consoles

https://www.nikeshoebot.com/sneaker-violence/

https://bleacherreport.com/articles/2747924-sneaker-related-violence-in-the-age-of-the-mobile-app

https://www.nytimes.com/interactive/2021/10/15/style/sneaker-bots.html

https://queue-it.com/blog/how-do-sneaker-bots-work/

https://snobette.com/2021/10/nike-admits-snkrs-isnt-working-driving-away-customers-to-competing-brands/