Pokemon Go has become a cultural phenomenon. In just a couple of weeks since its launch, all predictions for number of downloads and the amount of time that users are spending on the game each day has been surpassed.

For those of you who don’t know, the main feature of Pokemon Go is that it is an AR (Augmented reality) game that requires its players to explore the real world to find and “catch” the creatures called Pokemon.

The most interesting thing about the game for anyone in marketing or retail is how it can drive players to fixed locations. These locations are called Pokestops, places where players can collect items, and Gyms, where players can virtually interact with others via the app. Retailers are beginning to notice the traffic the game can generate.

When Pokemon Go launched in Japan, McDonalds partnered with the game as its first sponsor turned 3,000 McDonalds stores into Pokemon Go Gyms. This deal will involve a fee per visit basis, similar to a Google’s cost per click. McDonalds has been quick to “catch” the hype around the game, and is winning by encouraging people to visit McDonalds stores to use the gyms, thus increasing the footfall into its restaurants in the hopes of driving more purchases.

American retailer Sprint, has gone one step further, offering training for employees to become “Pokemon Go Experts”, leveraging the store and its associates as a destination for Pokemon Go expertise. Store Managers have also shown initiative by setting up  beverage stands at Poke Stops located near Sprint stores. Katey Chamblin, director of sales operations at Sprint, reported that an hour after Sprint tweeted about a store in Louisville, Kentucky that was also a Poke Stop, a bus full of children and parents showed up to catch Pokemon and shop.

The app also offers the option of purchasing a “lure”, which will attract Pokemons to a specific place, as well as shoppers. According to the New York Post, a New York pizzeria paid USD10 for the in-app purchase of the “lure” for Pokemons (Figure 1). The pizzeria reported a boom in business  of around 75%.

Figure 1

 

Source: Twitter

Lyft is taking advantage of this trend too (Figure 2), offering discounts to customers using the service for a ride to a Poke Stop (luckily Poke Stops are usually general interest places or monuments).

Figure 2


Source: Lyft  

What Could Pokemon Go Teach Us For The Future Of Retail?

Pokemon Go, like many things, will have its day in the sun and won’t last forever. For retailers, these sweeping crazes aren’t just cultural events, but could be a major driver of profits and sales. The best retailers are those that react to trends the fastest and innovate around it. This doesn’t always require a huge investment either. Sometimes it’s about getting the right product in at the right quantities, at the right time. Last year, Poundland, one of Britain's biggest discounters, had huge success throughout the Loom craze (colourful band/bracelets for kids). Poundland sold 6 million units and boosted sales but once the craze ended, blamed slowing sales on the vanishing interest in Looms.

 

Pokemon Go will help retailers boost traffic in the short term. Traffic at malls and brick-and-mortar stores can certainly be reenergized. As we’ve seen, some merchants are encouraging game play, selling merchandise around it, and promoting it. That could have broader implications for retailers who are trying to find new ways to engage with shoppers. The main problem is how to convert this increase in footfall into revenue or how a retailer can lock these new customers into a longer term relationship.  What this craze really shows, is that for retailers, the future of shopper interaction may be through the gamification of an experience− i.e., making shopping fun and rewarding.

 

How Can Retailers and Brands Capitalize on the Hype?

There is a small window of time to capitalize on such trends or crazes. Taking Pokemon Go as an example, the existing user base features a large number of players that are “casual”. They just downloaded the app in order to try it. The idea should be “capturing” new users, converting them to the retail brand, and build a relationship from there.

With this new wave of AR and location based apps, there is a big opportunity to influence behaviour. Location based marketing works and creates a bigger sense of personalization and uniqueness. This new wave of mobile marketing can bridge the gap between online and in-store engagement.

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