Nike’s Killer App Game
About a hundred kick-hungry sneakerheads marched into Washington Square Park, smartphones held high, panning from side to side, on a late June afternoon in New York City. It was a mix of faces: parents, early high schoolers, 20-something urbanites. They paced in droves, pushing strollers, scooting atop bicycles, coasting on electric skateboards. Most strutted in sneakers so clean they looked as if they were just pulled out of the box.
Seconds later, they all took off sprinting.
It looked like a parkour-inspired flash mob, some racing at high enough speeds to clear benches with a single leap. Bike tires screeched as a handful took off on wheels. Body after body circled around the park’s iconic fountain to a walkway covered by trees. Bystanders whipped around as more and more weaved their way through the crowd. “Where are they going?!” one yelled.
They funneled into a small open area just off the park’s eastern entryway. One by one, they came to a halt, still glued to the screens of their phones. Then, they pulled out their credit cards.
This is how Nike is selling sneakers in the age of the smartphone.
The company has joined the growing world of sneaker apps that use tech to sell shoes in an unconventional way. On this day, it was a pair of limited PSNY x Air Jordan 12s, dressed in a wheat brown color from top to sole. About a week earlier, Nike had teased the release of the shoe and alerted patrons that they’d only be available through its new Nike+ SNKRS app in a specific location at a specific time of day. There was no other way to get it. You had to either be in one of three designated locations when the shoe dropped or you were out of luck.
These aren’t just shoes anymore, they’re status symbols. Like a Rolex, for your feet.
Call it a scavenger hunt — a different approach to selling shoes in an age when sneaker drops more often traffic in hype. The events draw sneakerheads from all around the world, people who value originality and scarcity so much that they bear crowds that clog traffic and lines that span full city blocks.
The process has evolved beyond the act of buying shoes, a feat of competitiveness that’s fueled by adrenaline. These people aren’t purchasing shoes so much as hunting them, sometimes traveling across continents to camp on concrete for days. It’s pushed most out of the market, catering to extremists who resort to bots that can crawl webpages or those who pay others to wait in line. These aren’t just shoes anymore, they’re status symbols. Like a Rolex, for your feet.
That’s the problem, too. For every fan chasing leather, there’s at least a handful of resellers trying to turn shoes into fists full of cash. A reseller — someone who purchases shoes to resell them at a higher markup — can easily double, sometimes triple his money on a single pair. One particular set of kicks hit a whopping $16 million three years ago on eBay and resellers made an estimated $240 million in 2013, according to FiveEightyThree.
It’s a volatile mix. One of the most infamous sneaker drops in 2005 sparked a riot in New York City with knives, baseball bats and machetes. People have long been jumped for their kicks, sometimes even killed. You hear more horror stories stemming from drops than you do successes.
Nike’s new app is its way of challenging all this, with a method that’s highly technical but still simplistic. By hitting a giant reset button on a market that has been overrun with people trying to game the system, Nike’s stripping the sneaker hunt down. And so long as you’re willing to engage in the chase — in a very literal sense — the shoes can be yours.
But with every sneaker that’s dangled at the end of some digitally futuristic pursuit, a question remains: Will it stick, or is it no more than a passing fad?
Nike’s been concocting these hunts since the start of the year in the heart of New York’s Flatiron district, out of a small office it calls the NYC Digital Studio. After acquiring Virgin Mega, a 12-person startup focused on constructing gamified shopping experiences, in August 2016, the athletic retail giant dedicated the team to reimagining the intersection of tech and sneaker culture.
“It’s really about looking at the part of the culture that always felt the most special,” said Ron Faris, general manager of the Nike NYC Digital Studio and SNKRS app. “And what people remembered the best about it 15 to 20 years ago, 10 to 15 years ago, when a lot of these drops would happen, was that there was an unpredictability to it. It was predictably unpredictable, and I think the feeling we had was, what if we could bring that feeling back, but with using tech at the center.”
It’s accomplishing that with three main features in its Nike+ SNKRS app: SNKRS Cam, SNKRS Stashes, and Shock Drops. The cam prompts users to find images or photos in the wild, and then uses augmented reality to unlock a purchasing window within the app. Stashes are location based, prompting users to convene at a physical spot to be able to purchase a shoe. Shock Drops are the simplest: They alert users to immediate drops at local boutiques via push notifications, where they purchase the shoe from a storefront.
All those features are tucked away within the app, almost hidden. In fact, if you were casually scrolling through the feed, you probably wouldn’t know they were in there at all. They’re not showcased, and the only way you can find them is by tapping around various pages.
This is intentional. Nike doesn’t want to directly sell you the shoe, it wants you to find it.
“What we want to try and do is bring a product, a story and an experience together to create something that builds magic and emotion for consumers to get extra hyped up before a shoe drop,” Faris said.
Nike first tried out its tech on the “Royal” Foamposites it debuted in January. They were the same shoe worn by basketball legend Penny Hardaway, who infamously took a sharpie and colored the stripes of his shoe black during the 1997 NBA Playoffs to avoid a fine.
The story has reached mythical status among sneaker diehards and, as an homage to the narrative, Nike hid a feature on the shoe’s display page where users could color it with their finger. Once the whole thing was filled in, they were met with a video message from Hardaway and were granted access to buy the shoe.
“We had something like 80,000 people unlock that experience — knowing full well that it was already sold out — because the experience was fun,” Faris said.
Game planning these drops has been an evolving process, with Nike pulling fans into its studio for focus group after focus group, trying to drill down to the essentials that motivate its customers. The balance is delicate: Don’t overtly showcase drops so much that it ruins the allure of the chase, but don’t hide it so well that no one can find it. And after doing one to two drops this way for the past few months, it’s taught Nike one important thing.
“How you launch the shoe is, at times, just as important as the shoe itself,” Faris said.
Just ask David Chang. Even before Nike could finish its pitch, Chang needed to hear it a second time.
“Can we go through it again?” asked Chang, the famed restaurateur at the head of the Momofuku restaurant group, which manages a handful of New York City’s most successful restaurants.
Nike had made him a custom shoe adorned with a design that embodied the creative energy that fuels his popular eateries, but it had an unorthodox idea for selling it. Execs wanted to use the SNKRS Cam to prompt users to take a photo of a scannable poster or his Fuku restaurant's menu. Once they did, a 3D rendering of the shoe would pop up on screen. Only then could customers purchase it.
“They explained the technology step-by-step because I am not the most tech savvy,” Chang said. “And then once I finally understood what they were trying to propose, I was like, ‘I can’t even begin to get what’s going on here.’”
Chang was happy to be the guinea pig, though. He has long considered himself a “sneaker aficionado” — not quite the Jordan chaser his peers are, but a guy who appreciates the aesthetic of some fresh new leather. Still, his nerves got the best of him the night before the drop. He’d left Momofuku Ssäm Bar that evening and made the three-block walk over to the Fuku location in the East Village just to check it out. Three people were already camping out in chairs at 1 a.m.
“That freaked me out,” he said.
The whole experience carried the emotional weight of a restaurant opening — he’d spent the better part of a year planning this drop with Nike. He’d made trips to Nike’s headquarters in Portland. Various teams had met him in New York. There were so many meetings he’d lost count. He tallied up all the emails and notes the two had sent back and forth and estimated the document must have been 27 pages, single spaced, outlining the initial idea to the inspiration behind the design.
We’ve been lucky enough to have lines for food since we opened for the most part, but I’d never seen a line like this. I felt so honored they would wait.
So, the night before, he struggled to sleep, and showed back up at the restaurant around 9 a.m. the next day. The line outside had grown to about 50 people or so, stretching one full block and around the corner. All of which freaked him out even more. He took refuge inside, among the stacks of shoe boxes and gigantic tote bags with the Nike Momofuku logo, an exclusive treat for all the people who chose to wait in line as opposed to ordering online. About an hour and a half later, with 30 minutes still to go until opening, the line had ballooned to 100 to 150 people.
“We’ve been lucky enough to have lines for food since we opened for the most part, but I’d never seen a line like this,” Chang said. “I felt so honored they would wait.”
The drop went smoothly, other than the fact that the credit card machines went down for about 30 minutes. But Nike had a team on site that coordinated the whole thing, and troubleshooted various scenarios before the doors even opened. So Chang walked outside, strutted the line, shook hands, and thanked as many as he could, one by one.
“Nike spent so much time trying to distill that idea into something that actually worked,” Chang said, in disbelief. “I mean I still don’t understand how it actually happened.”
Russ Bengtson, a true O.G. in the sneaker world who’s been covering shoes for the better part of 20 years with SLAM Magazine and Complex, was walking back to the subway on the west side of Manhattan when he spotted one of the scannable images on a wall outside of Momofuku Nishi in Chelsea. It had been a few days since the drop, and the shoe was almost certainly sold out, but he pulled out his phone and opened the app just to see how it all worked.
“I can’t speak for everyone, but I think they’re cool,” Bengtson said. “I think there’s a lot there in being able to tie a sneaker purchase back to something in the real world, which to me is something that’s missing when more people are buying their stuff online.”
Bengtson’s under the impression that these apps will do more good than harm, especially when the drop ties in the narrative behind the release. He said he could see this tech being used in a place like Chicago, say, where fans could flock to the Michael Jordan statue in order to get their hands on a pair of kicks.
“I definitely enjoy the treasure hunt aspect of it and sort of having to have a little knowledge of what the shoe represents in order to get it,” Bengtson said. “To me that’s actually pretty cool.”
Not all view the experience so favorably. Juan Ballesteros, 19, was at Washington Square Park for the PSNY Jordan 12s. He was able to get his hands on a pair, but only because he was tipped ahead of time where exactly to be and when.
“This app is absolutely not fair,” Ballesteros said. “Those who really want the sneakers don't even have a chance to buy them. It does give some users a better chance against bots, but only those users who have inside information like my friend does who tells me.”
“I feel like Nike is trying out new methods to try to get their sneakers to true fans and I commend them for that but I feel like this is not the correct way.”
It may not be the correct way in battling resellers, either. Bengtson is convinced resellers are always going to find a way to get the shoes, so long as kick-hungry collectors are willing to pay double or even quadruple the retail price. Apps, in fact, could make it easier, since customers are no longer forced to have sit in the rain for three days to buy them.
“As long as the retail price for shoes is $250 or whatever it is and people are willing to pay $1,300, $1,400, $1,500, it’s worth reselling. A shoe release is essentially an IPO at that point, because you know the price you’re going to pay is far below what the market will set the value at,” Bengtson said. “People are going to do that whether they buy it at a store or on the app.”
There are some notable positives that come with these apps though. In a market that has long been restricted to modern day shoe-tropolises like New York and Los Angeles, it evens things out and gives those outside of major cities their own chance to get kicks. And getting a simple push notification is a lot easier than setting an alarm and logging on to some seller’s website, only to be met with crashing webpages.
“It’s convenient for people who maybe don’t have some destination sneaker store in their own city or whose sneaker store doesn’t get whatever the latest coveted product is,” Bengtson said. “I do think that it does bring new people into it and it does to an extent level the playing field.”
But leveling the playing field also means widening the number of participants, and it doesn’t always mean increasing the supply. So that means more people having to leapfrog a bench in a dead sprint to try and grab a hold of the prize. It’s much more high stakes than trying to put shoes in an online cart, but not as strenuous as waiting in line, some would argue.
“Personally, I do prefer these kinds of drops because it only takes an hour or two out of your day,” Ballesteros said. “I've only waited in a line once and it was the worst experience ever.“
But when it comes down to it, making the act of purchasing shoes a game by definition results in winners and losers.
In the end, it might not matter to weathered sneakerheads. The thrill comes from buying the shoe, yes, but it also comes in the chase. As Ballesteros put it, he said even if he’d gone through that trouble to get to Washington Square Park only to find out the shoes had been sold out, he said it wouldn’t have been all that different than what he’s used to.
“I wouldn't have felt any type of way,” Ballesteros said. “In my two years collecting sneakers I have tried to buy so many sneakers and ended up failing. It's just a part of the sneaker game, you have to learn to accept you won't always be able to purchase what you want.”
Maybe it’s fair, maybe it isn’t. But either way, that’s the game.