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The Battle of the Sneaker Bots

An online economy of tips, proxy servers and automated applications has grown out of the hype-driven sneaker market, and the rise of the casual reseller is only making it harder to shop for the latest releases.
A Barcelona man waited in line to buy a pair of Adidas Yeezy sneakers. Other buyers have turned to automated purchases online | Source: Paco Freire/SOPA Images/LightRocket via Getty Images
By
  • Chantal Fernandez
BoF PROFESSIONAL

NEW YORK, United States — The latest sneaker drop from Adidas is even more highly anticipated than usual: called the Lundmark, this special-edition Yeezy Boost 350 V2 comes in white and cream and with a special twist — a light-reflecting exterior. A lucky group won one of several raffles to shop the shoes in stores across the country on Thursday.

Meanwhile, an online network of sneaker resellers are preparing to go to war for the remaining supply when they drop online.

At House of Carts, a members-only chat group on the Discord platform, sneaker resellers swap tips and tricks to be the first to learn about the drop and to complete orders on Shopify's Yeezy Supply storefront as quickly as possible. Members range from teenagers looking for an easy way to earn a little extra cash on sites like StockX and Goat to professionals shipping large quantities of sneakers to resell in China.

But even lightning reflexes likely won’t be enough to cop a pair of Lundmark Reflectives. House of Carts is also a hub for people looking to “cook” sneakers — the term for shoppers who deploy scripts or bots that automatically complete purchases within seconds of a drop going live. Information about where to buy these programmes and how to set them up is easy to find online, with bots capable of snapping up coveted Yeezys selling for as little as $200 plus monthly fees.

It can be worth the expense. Adidas set the Lundmark’s price at $220, but it’s expected to sell for around $1,000 on resale sites, members of House of Carts predict. A bot that manages to snag even one or two pairs will easily make back its cost.

Bots have proven so successful that they’ve spawned an entire parallel economy. Nova, a young reseller and vlogger who declined to give his real name, said he makes most of his income from sponsors, referrals and ad revenue from his YouTube channel, where he documents his bot-aided purchases and sales for an audience of aspiring sneaker resellers.

I think the consumer feels particularly shortchanged

“Nowadays there are bots popping up left and right because developers are starting to realise that the money is not actually in purchasing the shoes: the money is in selling the software that helps people purchase the shoes,” he said. In that way, the bot market is a mirror of the sneaker market: limited availability drives up demand — and ensures those who bought the bot have a better chance of success — and increases prices.

For Nike and Adidas, which dominate the online sneaker market, the rise of the bots is a mixed bag: instant sellouts and soaring resale prices create a buzzy halo around their brands. But regular consumers, many of whom consider bots to be ethically shameful, are increasingly frustrated by how hard it is to shop these sneakers and blame the brands as well as the botters. That frustration defeats the purpose of drops and limited-edition sneakers, which are meant to build customer loyalty (as opposed to mass-produced footwear that drives most of these companies’ revenue).

“I think the consumer feels particularly shortchanged,” said Dylan Dittrich, the author of “Sneakonomic Growth: Scarcity, Storytelling, and the Arrival of Sneakers as an Asset Class.”

Nike and Adidas declined to comment.

Speculators have deployed bots to snap up limited-edition products since the earliest days of e-commerce.

But in the sneaker market in particular, with its runaway resale market, they’ve rapidly grown more organised and sophisticated. Sought after sneakers are valuable precisely because they are sold in limited, irregular releases, creating enormous incentives for people to game the system.

Bots can cost anywhere from $200 to $1500 in addition to monthly maintenance fees, which can be as high as $500. With names like Cyber, SupBot, Dashe and Sole — and slick website designs to match — many of the most popular and expensive bots and automation applications sell out just as fast as the latest Off-White Nike collaboration. Cyber was the most successful bot of 2018, said Nova, but is no longer the clear leader.

Dittrich said there is an acceptance within the industry that bots are here to stay. Not that brands aren’t fighting back.

We are always finding ways and looking for new ways to reverse what these bots and what these programmers are trying to do

Nike attempts to keep the bots at bay by using multiple methods to release shoes. On its SNKRS app, shoppers may be required to “scratch” an image on their screen, engage with augmented reality or log on from a certain geographical area. The brand also requires customers to shop with a loyalty account tied to a phone number and address, and weeds out multiple accounts with the same registration information.

These methods aren’t foolproof; shoppers can enlist friends to set up multiple accounts or buy verified accounts online.

Shopify, the e-commerce platform behind the online shops for Kith, Dover Street Market, Yeezy Supply, Palace, Travis Scott, Fear of God and many others, invested in more anti-bot measures this year. Botters say the company has gotten better at recognising when a purchase is coming from a proxy server and other digital intermediaries that make one individual's activity look like it is coming from multiple different sources.

In 2016, Shopify employees at a company hackathon developed Frenzy, a sneaker and streetwear release mobile app that is designed to combat bots. Today the app offers both global releases and geo-fenced drops — meaning only users within a certain physical area such as a festival or concert can make purchases.

“We are always finding ways and looking for new ways to reverse what these bots and what these programmers are trying to do,” said Kevin Donnelly, senior marketing manager of Frenzy.

House of Carts Founder Yousef Issa, a 21-year-old computer science major at Northwestern University, said no site is bot or script proof. But there are many ways that brands and retailers can make automated advantages unusable.

Indeed, brands could shut down the bot industry by releasing more shoes - but that would diminish their appeal. Yeezy prices dipped on the secondary market last year after Adidas increased the inventory, for example. But Kanye West told Forbes this week that the brand is expected to exceed $1.5 billion in sales in 2019.

There are thousands of people who are 'botting' nowadays

“What is the kind of magic number of sneakers you can release for a given limited release that is going to get the product into an acceptable number of hands without killing the hype around the product?” said Dittrich. “It’s a really delicate balance that brands have to negotiate.”

Even with all the behind-the-scenes machinations, and complaining from regular sneaker enthusiasts who don’t want to resell and find themselves blocked by a non-human advantage, luck still plays a huge role in buying limited sneakers. And it’s easy to get scammed.

Bots can also scam uninformed buyers, or make incorrect and costly purchases on a shopper’s behalf — and not all retailers offer refunds.

Nova also said that bots and scripts are unstoppable. “If they make it harder than we just have to work harder and the people who work harder and smarter will still be successful.”

That being said, the reseller knows people who have “spent thousands of dollars” on bots and have not yet had a successful purchase because stock is limited and the competition is high. “There are thousands of people who are ‘botting’ nowadays.”

While there is a certain amount of turnover in the sneaker reselling world — many of House of Carts initial members have phased out — Issa said the influx of new people interested in trying to game the sneaker shopping system is the reason why bots have become so expensive and so rare. For newcomers, it's a confusing industry.

“With a new pair of Nikes coming out, you might have 30 and 40 websites that [are] dropping them all at the same time,” he said. “We’re really focused on getting new members up to date and making them comfortable with the whole industry because it’s very intimidating at first.”

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