Great news for the average sneakerhead, terrible news for sneaker resellers. Nike is officially attempting to combat bots on the sneakers app, but how exactly do they plan on doing this? 

Let’s take a look into this bittersweet news together and try and understand what this means for the reseller, the sneakerhead, and the sneaker community as a whole. 

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A few months back, the Sportswear and sneaker Giant announced that there would be new updates and security measures to the famed app known for the countless Ls it’s given us, the Sneakers App. 

Nike Stated that hyped releases on the app would be protected from bots in more ways than one; they went on to define a bot as “autonomous programs that interact with systems to create fake accounts and check out on digital platforms more quickly and in greater numbers than any human ever could,” which of course is extremely unfair to the rest of their customer base trying to get their hands on a grail.

But what exactly are these grand security precautions? Perhaps a secret agent service that shows up at your front door and confiscates your entire sneaker collection as punishment for botting? Thankfully they aren’t this extreme ( yet ) however, they are fairly serious. 

 What is Nike Doing To Fight Bots On its Sneakers App

Nike revealed that its policies and guidelines forbid the use of bots and that it employs several techniques to find and remove bots from the site. This includes analyzing different digital platform interactions to look for bot activity, account verifications, and IP reputation checks to ensure that users and entries are legitimate.

These precisions will be implemented at multiple stages/checkpoints when using the sneakers app and will ultimately cancel and remove any order made with the suspicion of botting. However, it doesn’t end there; the sneaker manufacturer also stated in their recent attempts to combat botting and reselling customers who make use of these technologies for resale risk being hit with additional restocking fees, having their refund requests rejected, or having their accounts suspended all at once.

So it’s safe to say that Nike is serious about combating resellers this time around and the repercussions ( if caught ) could be pretty serious. The real question, however, is, are these new security precautions putting more sneakers on the feet of those who want to rock the shoe rather than resell it, or are these just new scare tactics Nike is trying out? 

With the new year comes a whole new cycle of sneaker releases coming along with the new year; we will just have to hold on tight and watch it unfold. 

I’m sure after reading the new terms and conditions you must have some questions, pretty sure we all do. I think the main one for me would be “why ?”, It’s unarguable that Nike has benefited GREATLY from the recent boom in the sneaker culture, so why are they trying to actively combat it with such an aggressive approach and will they ever have it under complete control and if so what would that mean for the sneaker scene? The questions just keep on coming, so let’s dive deeper and try to break them down. 

Ask any of the sleepy-eyed campers outside your local sneaker store at 7 a.m. on a Saturday to confirm that Nike and Jordan Brand rule the sneaker resell the game. The influence of the Oregon sportswear giant is so great that it is said that 96% of sneakers sold for resale have the Swoosh or the Jumpman on them.

But how much Nike actually dominates the market for deadstock sneakers is frequently underestimated. The conditions that the resell market thrives on, namely exclusivity and hype, have been expertly manipulated by Nike to create a unique ecosystem that ensures sneakerheads will continuously go to extraordinary lengths to acquire the sportswear giant’s product. While ASICS, New Balance, and Adidas shoes will occasionally appear in the hands of resellers. 

While it is clear that both Nike and resellers benefit from limited releases, the Swoosh is so good at predicting demand that it only releases a small portion of large drops (such as the consistently popular Jordan Retro series) to the secondary market.

(an estimate of 4%) . Drops, of course rapidly sell out and help keep the Nike and Jordan brands at the top of the sneakerhead food chain, yet not so limited that resellers can demand exorbitant premiums where Nike could have generated sales through retail.

To quickly put into perspective, let’s look at the shared $170 retail price for the oh-so-beautiful 2013 Air Jordan V “Oreo” and Air Jordan X “Steel”. 505,000 pairs of the “Oreo” were made available to stores, but only 151,000 pairs of the “Steel” were produced. The “Oreo” was in much higher demand than the “Steel,” and Nike adjusted its production run accordingly, keeping the hype machine thirsty while still shipping more than 500,000 pairs of shoes in a single weekend. Despite the logic of exclusivity suggesting that the “Steel” would command a much higher resell price, both models were released at an average price of $225 on the resale markets. 

That’s not to suggest that every release achieves the ideal harmony between exclusivity and accessibility; on occasion, Nike will decide to restore its dominance in the market by igniting a frenzy with an incredibly restricted release. Future releases can then take advantage of this hype to generate massive sales. The classic LeBron X is a perfect example of this tactic, originally released in extremely limited quantities and selling out almost instantly however, upon the arrival of the LeBron XI a year later, Nike released the shoe in much higher quantities and capitalized on the anticipation surrounding the previous release to shift a significant amount of retail sales because consumers believed the drop to be extremely limited, just like the year before. 

Safe to say Nike has us wrapped around their finger, right where they want us! However, this leads us to the million-dollar question posed by the sneaker community, “Why don’t they just create more sneakers or raise the price?” is answered by all this trickery.

To put it simply, Nike can have its cake and eat it too by skillfully matching a tight supply with strong demand. The 4% of customers who support the resell market would be discouraged by producing more shoes, while the other 96% would be discouraged from purchasing for themselves by raising the price. Nike creates a market that brings in millions of dollars per year for the resale industry by making sure supply never quite keeps up with demand. At the same time, Nike cultivates the fervent fan base that keeps the Swoosh at the forefront of consumer culture, alongside Apple and Starbucks. Not to mention enabling the company to sell millions of sneakers that are 20 years old each year without the need for promotions, discounts, or sales.

The secondary market Nike has created for itself is peculiar and, in more ways than one, resembles the black market for illegal narcotics.

so yes, for those who don’t understand, sneaker addictions are a very real reality for most of us! 

There are no entry barriers at the other end of the market, where supply is severely constrained and controlled by one agent—in this case, Nike, though cocaine cartels in Latin America operate much the same way. For aspiring resellers to enter the market, no overheads or certifications are necessary; all you need to do is buy some goods, get a few potential customers, and you’re in business. Additionally, rates for dead stock kicks are not formally set, and people will go to amazing lengths to satisfy their addiction to buying them. This is similar to the drug trade.

Nike’s cult of loyal fans has solidified its status as one of the top megabrands in the world; its products have led to riots (Nike SB Pigeon Dunk), forced people to line up more than a week before release (Air Yeezy 2), and even made some trade in their cars for them (Air Foamposite One “Galaxy”). Had the Oregon brand not so cleverly watched, played with, and finally managed the weird dynamics that take place in the market for deadstock sneakers, this type of hysterical following would never have been feasible. 

The Nike vs resellers battle has been an ongoing case since the early 2000s; maybe its time Nike accepts that resale and resellers are always going to be around for as long as they continue selling their signature sneakers, and although Nike’s new policies to further fuel their side of the fight I personally feel it won’t be a permanent fix.  

A large cycle of smaller cycles makes up the course of life. The sneaker industry is subject to the same rules that apply to aging people and changing seasons. There is a certain amount of hype surrounding particular models or styles, which finally reaches a peak before the sneaker slips back into obscurity. If you’ve been around long enough, you’ve probably witnessed this unwritten rule in action numerous times, regardless of the sneaker’s brand, model, or style. It simply occurs. Though brands also significantly impact a shoe’s lifespan, a lot of that is related to shifting consumer patterns. 

A clear indication of this is the recent hype surrounding the Nike Dunk. Resell costs for newly released Nike Dunks have been on a significant decline.  The typical resale price in January 2020 was just over $200. It then skyrocketed in the summer when it was closer to $800 but has now dropped to about $400. Even though there is still a sizeable profit to be made and the price premium implies Dunks are still in high demand but it is obvious that the euphoria has peaked. 

Like the prices, the hype is also on the decline; runways and celebrities are showing a glimpse of new trends such as the gorp-core look, which involves utilitarian clothing and footwear; others are taking a more classic approach and turning back to leather loafers, suit trousers. Where does this leave resale culture? Only the new year will tell, and we will be back here researching new topics and developments together 

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Junaid Rigney

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