The question of how to drive traffic to the malls has lingered over the retail scene for years, as top-shelf “A” properties hold their ground but the rest of the malls suffer.
Now, at least some analysts are starting to hope for a cure in digital monsters and the hordes of cell phone wielding players of Pokémon Go chasing them in augmented reality.
The game has been ultra hot since its July 6 introduction, and only time will tell if it’s a fad, but Cowen analyst Oliver Chen sees real potential in AR and said retailers need to start paying attention.
“Pokémon Go and what the game represents has the power to transform retail if stores can capitalize upon new traffic and become integrated into an entertainment experience in an authentic brand appropriate manner,” Chen said. “The new free-to-play AR gaming app has broad implications for retail as it addresses declining mall traffic, plus emerging trends toward social experiences and health/wellness.”
Gamers use the app to chase, capture and train Pokémon, a name referring to “pocket monsters.”
Chen said retailers should embrace Pokémon Go and take advantage of the opportunity to increase customer engagement. Users have to use up some shoe leather and burn calories in the real world as they search for the creatures.
As of now, retailers cannot do much beyond setting some “lures” to attract the digital creatures and to draw traffic, but there are hopes that Niantic, the game’s maker, will allow that in the future.
But Niantic is still just building its audience for Pokémon Go and likely doesn’t need to raise money in new ways immediately. Cowen estimates the app is driving revenues of $3 million to $4 million a day in the U.S. alone.
It remains to be seen if that is sustainable.
“Can the game sustain its ferocious start? We are a bit skeptical, as in our opinion there simply isn’t that much ‘game’ there. Once players have caught lots of Pokémon — which is undeniably fun — there isn’t much to do with them other than a very simplistic gym battle mechanic,” Chen said.
“Pokémon Go’s long-term influence on the broader retail industry largely depends on how long the phenomenon endures and if other game makers can replicate similar AR technology,” he said.
Clearly, though, the genie, or Pokémon, is out now and the world has seen and gotten excited about the digital-real life combination of augmented reality.