Ecommerce Bots: Markets Within Markets

Artificial scarcity is usually associated with luxury goods. For example, the De Beers Group is an international, vertically-integrated diamond company that artificially restricted the supply of the jewels it mines and manufactures in order to inflate the price. Until the beginning of the 21st century, it was able to do this because it maintained a virtual monopoly in the diamond industry, and it could profit from the artificial scarcity that it induced.

The same principal is at play in another industry, albeit a much more niche one: the world of streetwear. Supreme, the brand most associated with this type of fashion, induces artificial scarcity in all of its products in order to drive high prices from its cult-like following. When Supreme releases a product, it does so only in very limited quantities, and it generally doesn’t release the same product multiple times. This ensures total sales of all its products, whether in-store or online. So high is the demand for Supreme’s offerings that the company can even sell completely nonsensical items like logo-stamped bricks or painted crowbars, and consumers will still buy out the entire supply.

Given that there are only 10 physical Supreme stores worldwide, with only two of them in the United States, it’s understandably difficult to get one’s hands on a Supreme item. Shoppers often wait for days in lines stretching for blocks outside of Supreme’s stores in New York, Los Angeles, and other cities around the world. Online releases through Supreme’s website can sell out in minutes. Buying items through resale sites like eBay can be absurdly expensive. Case in point: one of Supreme’s logo-stamped bricks was resold for over $1,000 on eBay in 2016 after the original supply sold at $30 each.

Supreme’s artificial scarcity has created some interesting monetary opportunities for those equipped with the right combination of coding skills, business savvy, and streetwear interest. Written with coding languages like Python, ecommerce bots are automated checkout programs shoppers can use to purchase items online faster than human beings can naturally select items online and enter payment and shipping information. In the case of Supreme’s artificial scarcity, ecommerce bots can be wildly successful in that their owners can use them to beat the hordes of human shoppers trying to navigate the company’s online store, purchase inventory, and resell it. Or, in the case of one bot, the Supreme Saint, botmakers can rent out usage of their bot to hungry customers for a near-guaranteed purchase, in return for a fee.

As coding skills have become more common and online retail has become more mainstream, ecommerce bots like the Supreme Saint have risen in both popularity and notoriety. On the one hand, consumers recognize their utility, and are seeking to either rent out the services of ecommerce bots, or replicate the bots themselves. An entire subreddit, titled “r/sneakerbots,” exists to serve as a discussion forum for consumers to rent bots that buy rare sneakers, and for botmakers to discuss the specifics of their bots and which online release opportunities to target next.

In fact, the realm of rare sneaker releases is a ripe market within the overall streetwear industry for ecommerce bots. Bots like AIO Bot and NikeShoeBot exist for the sole purpose of automating the checkout process at sneaker sites, from name brands like Nike and Foot Locker to smaller boutiques like Hanon. These bots have stirred up controversy and backlash from retailers and consumer alike. Retailers claim that the bots render the marketplace unfair for consumer and detract from the experience of actually purchasing items through online retail, when consumers can be beat out by bots every time. Consumers simply don’t like that the bots can go through the checkout process so much faster than they can, when demand already outweighs supply so much.

Online retailers have tried to mitigate the effects of bots, of course. When a buyer goes through the checkout process a hundred times faster than a normal human being can manually enter their shipping and billing information, that sets off alerts that the buyer might actually be a bot, and the retailer can cancel the order. Some online stores feature bot identification methods like captcha tests. Streetwear brand Kith even includes a trivia question as part of its checkout process.

Whatever methods retailers employ to combat these ecommerce bots, however, it doesn’t seem like they’ll ever be able to prevent them. When demand exceeds supply by such a wide margin, consumers will pay whatever fees are required to up their chances of getting their hands on rare goods without having to go through the prohibitively costly resale market, and botmakers will continue to code these bots to both service these consumers’ demand, and to operate in the resale markets themselves. Botmakers are humans, too, and as they’ll be able to adapt to any strategy employed against them by online retailers.