Retailers are jumping onto the Pokemon Go bandwagon.
The augmented reality-powered mobile app that inspires players to travel in the real world to “catch” digital monsters, called Pokemon, is the trendsetter du jour. The free game uses the player’s GPS to determine location, and internally decides where the Pokemon characters are located (called PokeStops or Pokemon Gyms). Its augmented reality functionality means the app virtually overlays digital characters on the real world in real time, using the player’s smartphone camera.
The app became available on July 6, and although Pokemon doesn’t allow businesses to purchase the ability to become a destination in the game (and thus drawing in potential new customers and sales), there are ways for smart retailers to encourage players to congregate in or near physical stores.
Here’s how: The game lets players purchase “Lures,” which cause more Pokemons to appear near a specific PokeStop. So if a business happens to be located near a PokeStop, it can download the game and purchase Lures, which will draw in more players.
Pokemon independently determines the locations to find Pokemon, although some have predicted that Nintendo could allow sponsorship of locations later.
For now, social media has been awash with reports of Pokemon Go players taking over malls and stores, with mentions of Pokemon in places including Macy’s, Bloomingdale’s, H&M, Forever 21 and Sephora. Sephora reportedly turned away one Pokemon Go player who came into the store to play the game, but when reached, the beauty retailer declined to comment.
Players reportedly congregate in popular locations, including, for example, Market Street in San Francisco, which is near Union Square and Westfield San Francisco Centre, and Santa Monica’s Third Street Promenade. Westfield and Target also declined to comment.
This is the first time that augmented reality, or AR, has been this popular in a game, and it might give a hint at potential uses for driving retail traffic. The beauty industry has already peeked into the possibilities, with companies like ModiFace powering the ability to virtually “try on” makeup. ModiFace founder and chief executive officer Parham Aarabi said “augmented reality, when done correctly, can achieve a very high degree of engagement with consumers. A perfect example of this is the Sephora-to-go app, which last week unveiled live makeup tutorials, which are shown on the user’s live video. This combination of fun, engaging and useful AR experiences has already begun to dramatically impact beauty marketing.”
Still, retail has a way to go before AR becomes mainstream. “AR is still nascent,” said Forrester analyst Laura Naparstek. “The reason why AR has not taken off for consumers until now is because AR features, particularly in retail, live inside stand-alone apps that consumers don’t download.” She said that while the Pokemon Go game will get potential customers to arrive at stores, they are there to catch Pokemon. Retailers can spend the $10 or so on a Lure to their stores, but it will only be momentary. However, Pokemon Go does train consumers that sharing location can be a positive thing.
Going forward, she cautioned retailers from jumping on the AR bandwagon. “The most successful uses of AR are those that fit into a customer’s pre-existing journey or relationship with a brand. Retailers should not install any kind of AR feature in their stores or mobile apps until they have determined if it will truly solve a customer problem. Otherwise, the AR experience is a gimmick and will not drive incremental revenue.”
Maveron venture capitalist Anarghya Vardhana said this is one of the first addictive and amazing implementations of AR — after Snapchat. “The exciting thing about Pokemon Go is that it is getting regular consumers used to the idea of using their phone as an AR device,” she said. She said someone joked about putting Pokemons near polling booths during the elections, but that it wasn’t a bad idea, because it was an excellent way to merge the physical and digital worlds and to get people excited about the concept of AR.
“At Maveron, she said, “we are hyperfocused on investing in the next big consumer tech brand, and we think all these companies are bullish about virtual reality and AR. We’re definitely looking at consumer adoption of the space. Pokemon Go is a fantastic example because they didn’t sit around waiting for people to have AR glasses.”