Commercializing Pokémon Go

How can retailers capitalize on the summer’s hottest app and catch new customers?

By Mike Kendrick

20160805-carousel-pokemon-goIt’s been impossible in the last month to walk down the street without encountering swarms of Pokémon Go players. Edmonton’s once-empty parks and promenades are bustling with fresh foot traffic as players of all ages try to catch ‘em all on the summer’s hottest mobile game.

While Pokémon Go has been hailed by players as a great incentive to get out and meet new people, some businesses are seeing it as more than a trendy game — they’re seeing it as a potential business opportunity.

Pokémon Go uses an augmented reality (AR) platform that allows players to catch virtual creatures in real-world locations through their phones’ GPS data. Pokémon tend to appear in high-traffic public spaces and near monuments and public art, drawing large groups of players to these venues in the hopes of catching a rare beast.

Through the use of publicly available location data, certain businesses and landmarks are tagged as “Pokéstops” where users can stock up on in-game supplies and place lures to attract more Pokémon to the area. In Edmonton, the Legislature grounds and UAlberta campus have become the hotspots for Pokémon trainers. Walk past the Ring Houses or near the Tory Lecture Theatre on Saskatchewan Drive and you’re sure to see dozens of them gathered throughout the day.

Since its launch, many businesses have capitalized on this feature, placing their own lures to encourage players to flock to their location in the hopes of increasing their sales. Next week, a community-organized event is scheduled at the Legislature grounds, and the Valley Zoo will host a Pokémon Safari Night, accepting donations for the Valley Zoo Development Society.

Emily Salsbury, Executive Director of Retailing at the Alberta School of Business, says that there’s plenty of potential for businesses to make the most of this savvy strategy, but believes that success will be reliant on a number of factors.

“Over time, we’re going to have to see which demographic sticks to [Pokémon Go] and that’s when they’ll want to commercialize it,” Salsbury says.

She believes that it’s still too early to determine the app’s long-term audience behaviour — especially while developers are still ironing out some of the bugs — but in time, market researchers will form a better understanding of the demographics of the dedicated player base, and determine potential purchasing patterns.

Although Pokémon may be perceived as a children’s game, Pokémon Go players may skew towards the older Millennial demographic, as the audience who experienced the early games is already familiar with the franchise. Younger children, Salsbury points out, are also limited by both transportation and safety issues, so she speculates that the 18–35 crowd will become the app’s largest demographic audience. Once retailers confirm this, they can begin to think about the specific preferences of those consumers.

“There’s going to be a lot of research into who that gamer is,” Salsbury says. “Is that player a $6 coffee drinker? Are they even a coffee drinker or are they a Red Bull drinker?” While reluctant to draw on common “Gamer” stereotypes, Salsbury thinks that smaller businesses with diverse product selection — like convenience stores — are likely to see the greatest conversion rates from players who stop in to buy a pop or bag of chips.

Salsbury also advises that some businesses should be wary of jumping too readily into the fad, at risk of disrupting their existing customer base. Major businesses that are already busy, like McDonald’s or Tim Horton’s, aren’t as likely to see boosts to their bottom lines, and likely don’t need the brand awareness boost. But smaller independent businesses could stand to benefit the most from the Pokémon fad and Salsbury is eager to see how events could help entire areas.

“One of the things I immediately thought about is how amazing it would be to create a huge Pokémon Go [event] in downtown Calgary, where it’s really been hurting,” she says, suggesting that a collaborated effort amongst retailers could bring in large crowds of new consumers in the hopes of converting them to return customers.

While players flock to a storefront in hopes of catching that rare Gyrados, it’ll be up to these retailers to determine the best strategies to entice new customers and try to catch ‘em all.

Source: University of Alberta