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How Foot Locker Is Fighting ‘Sneaker Bots’

Foot Locker wants to level the playing field to ensure more shoppers get a fair shake at its latest sneaker drops. The footwear retailer is updating its mobile Launch Reservation system by opening up online inventory for the new drops and enabling consumers to sign up for them days in advance.

The update comes as retailers like Foot Locker that often launch new merchandise via hyped-up drops fight an ongoing problem: bots. These automated bots help rapacious users to quickly snatch up limited items, often to flip them for massive premiums on the bustling resale market.

Thanks to these bots, shoes will often sell out online before an average consumers even gets a chance to buy them, even if they click to purchase shortly after the drop. Like concert ticket sales, which are also often limited in the amount sold, these sneakers are collected and sold by the initial bot user in the secondary market for a much higher price.

With the feature update, users can sign up for drops in advance of launch dates to help mitigate consumer and bot traffic on those days. Foot Locker said the update is “coming soon,” but hasn’t a specific date fo the launch.

“Sneaker bots” were at the center of a controversy at Nike earlier this year that sparked the resignation of vice president of North America Ann Hebert. Hebert’s son used bots for the purpose of reselling sneakers—making a $20,000 profit in one instance—with the purchases going on her credit card.

But Foot Locker isn’t just focusing on getting around the bot problem. It wants to improve the customer experience altogether.

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Consumers can choose to either pick up their product at the nearest store location or have orders shipped directly to them, with the latter being a new alternative. Via the pickup option, consumers can choose up to three stores carrying the release in the app. If they win, they can pay for the release at the store as long as they show a valid photo ID. With “ship to me,” Foot Locker will use the payment and shipping information saved in a consumer’s account to automatically charge their credit card and send the new release.

Regardless of channel, participating consumers will get a push notification message whether they win, lose or get waitlisted.

Foot Locker plans to continually roll out platform updates over the next several months in an effort to thwart bots that try to flood the site.

And by opening up online inventory within the Launch Reservation system, Foot Locker can get more of its product out to its larger expected pool of winners.

The program incentivizes the company’s FLX Rewards members with a feature called “Head Starts” upon reserving a drop, improving their chances to win exclusive sneaker releases. The more consumers use Head Starts, the better their chances of winning.

Consumers who join the three-tiered FLX Rewards loyalty program, which launched in February last year, can earn “XPoints” with purchases that can be redeemed for Head Starts. FLX members can earn 100 XPoints for every $1 spent at any Foot Locker brand.

In an August earnings call, Foot Locker chairman and CEO Richard Johnson said that FLX members grew on a sequential basis from 20 million to 25 million in the second quarter, with these consumers spending 75 percent more than nonmembers in the period. Additionally, Johnson said FLX members’ average order values tracked approximately 10 percent higher, and this cohort also shopped more frequently.

Foot Locker is continuing to evolve in various ways, recently acquiring footwear retailers Atmos and WSS for a combined $1.1 billion.

Total sales for the company’s second quarter increased 9.5 percent to $2.28 billion, while sales increased 28.2 percent on a two-year basis.