Nike CEO John Donahoe announced during an internal meeting Monday the company is set to undergo an audit of its launch process amid consumer concerns about their inability to compete against bots when limited edition sneakers drop.
Brendan Dunne of Complex obtained a recording of the call, which came after Nike vice president Ann Hebert resigned following questions about her son Joe's shoe resale business. Heidi O'Neill, Nike's president of consumer and marketplace, said a probe found no wrongdoing on Hebert's part.
"Our internal review of the relationship between Ann and her son's reseller business confirmed that she had not explicitly violated company policies," O'Neill said on the call.
Nevertheless, Donahoe admitted the Hebert situation, combined with issues related to automated bots that buy up large swaths of product from initial drops on the Nike SNKRS app, has hurt consumer confidence.
"There's no value more core to who we are than the trust our consumers put into us and our brand and our products," Donahoe said. "And the fact of the matter is, this incident has sparked questions in some of our consumers about whether they can trust us, particularly around launch product."
The rise of bot technology, which allows for large-scale purchases while a regular consumer struggles to gain connection to a website or app, has become a major issue in the retail industry.
In December, the Washington Post analyzed the computer programs, which are legal, that allowed those with the automated scripts to secure multiple PlayStation 5 consoles during the Christmas season while the average buyer was left out.
Whether it's video game consoles or sneakers, those who secure the coveted items via bots often put them on secondary sellers like eBay at huge markups.
"We've been working on anti-bot technology for the last several years," Donahoe said. "That is part of the solution, but we need to double down our efforts."
He added that along with the audit, Nike plans to rewrite its company rules to provide guidance on what's expected from employees and their immediate family members in regards to resale markets.