While scalpers have proven to be a real problem as resellers would buy prized items and sell them at a bigger price, Nike had to deal with a recent issue with the company's (now ex) Vice President Ann Hebert regarding her involvement in a resale scheme.
Although reselling is allowed, the conversation took sideways when it was found out that the Vice President of Nike itself was somehow involved.
CEO John Donahoe
In an article by Complex, John Donahoe himself--the chief executive of Nike--had to address the recent circumstances revolving around he resignation of the company's very own vice president.
The CEO had to attend an internal all-hands meeting for the brand's team over at North America on Monday.
The resignation by Hebert came just two days after Bloomberg Businessweek published a story that uncovered her involvement with a sneaker resale business that was run by her 19-year-old son named Joe. This then raised questions regarding unfair practices and even nepotism circulating the limited sneaker launches.
Joe Hebert's Nike Resell Business
Joe Herbert noted to Bloomberg that there were instances when he would gather over 15 people to swarm the website all at once, along with bots that function by bypassing the system which is designed to limit the purchases to just one pair per customer. Joe then revealed that he was able to make a purchase of limited edition Yeezy sneakers worth $132,000 and flip them for a $20,000 total profit.
Nike's president of consumer and marketplace, Heidi O'Neill, also addressed the issue in the meeting referring to Ann Herbert's actions as a demonstration of "poor judgment."
Although Herbert openly disclosed her son's business back in 2018, she had not been updating the company regarding the business' growth, according to Nike. It was also said that it was not reported if the business follows Nike's policies when it comes to reselling, as well as family and employee relationships.
Read Also: Nike Files Patent For Real-Time Monitoring Of Athletes' Performance
Anti-Bot Technology
As Dahoe said (via Complex), Nike has been developing its very own anti-bot technology for several years now. However, he acknowledged that it was not enough to totally eliminate scalpers.
It remains to be seen how far the company is when it comes to the development of the technology, but it just means that stricter measures will be employed by the sneaker giant moving forward--especially after the bad press it received with the Hebert controversy.
For what it's worth, O'Neil noted that Hebert and her son did not violate any policy, so the company decided not to take any corrective action. In response though, Nike will look to update its policies in order to avoid such circumstances from happening again.
It is still unknown what other actions Nike will take, but scalpers will certainly be more wary as the retail giant looks to keep things fair to its customers.
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