Seeing someone walking around deep into a smartphone is nothing new, but this summer, if you noticed that a lot of people out in public with their phones seemed especially happy, they were probably playing Pokémon Go.
Pokémon Go is a game that leverages a mobile phone’s GPS, location capabilities and camera to make Pokémon (a portmanteau of “pocket monsters” or “poketto monsut” in Japanese), “appear” in your phone camera’s range.
It’s essentially an augmented-reality mobile version of the Pokémon game made popular by Nintendo, though it’s a collaboration with The Pokémon Company and Niantic Labs, which released a similar game, Ingress, in 2012 that never really took off.
The game started off already loaded with Pokémon creatures that could be found at public places like parks and museums, designed to get people out and about. Retailers and malls, already favorite places for people to gather together, were also well populated with the game’s “monsters” and other collectibles, which look like rats, dragons, serpents, bats, dinosaurs, birds, eggs, trees, and other things.
Mixed bag of initial reactions from retailers
The game did get people out and, in many cases, into stores. Some retailers were game —mobile phone stores hung signs touting how much better the game could be played on a new phone, Racked reported, while one American Apparel clerk advised a customer, “Do you play that Pokémon go game? There’s a balbasaur in here.” But for others, it was a nuisance and many discouraged people from hunting Pokémon in their stores.
Early experts praise potential for retailers
Soon, there were articles and blog posts advising retailers that they should take advantage of the phenomenon, and others on how to buy and use lures, support players, and use it all in marketing efforts.
“Don’t turn them away, lure them in,” exclaimed gaming critic Jason Evangelho, in a piece for Forbes. “It’s not hard to imagine that many businesses might take a tone-deaf approach and turn the influx of Pokémon Trainers into a negative experience,” he wrote. “That’s a wholly unimaginative and forceful way to lure in a paying customer.”
“Trust me when I say this game is exploding, and it stands to have a daily impact on your business,” he added. “The best approach you can take is to make that impact positive by embracing the game and making the Pokémon Go experience a memorable one for both you and your potential customers.”
Evangelho is a gaming expert more than a retail expert, though. Let’s hear Oliver Chen, a retail analyst at financial services firm Cowen & Co., who pretty much agreed with him, saying in a note to investors in July:
“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 wrote. “In our view, the new free-to play augmented reality gaming app has broad implications for retail as it addresses declining mall traffic, plus emerging trends toward social experiences & health/wellness.” he said.
Yet others saw in the game an example of what retailers themselves could do, if they just tried. Another Forbes article took retailers to task for being focused on apps that help consumers shop more than play.
“Target developed Cartwheel, a savings app that forces shoppers to manually select the items and discounts they want for each trip. It recently added maps to help shoppers find products and integrated vendor coupons to pump up the savings component,” wrote contributor Laura Heller. “Cartwheel is useful, but it’s not exactly fun. I doubt people are going to Target to play with Cartwheel, but they are going to Pokémon GO.”
Players don’t necessarily mean customers
It’s safe to say that the game had indeed exploded, but not everyone was so impressed with its potential for businesses. By the end of July, San Francisco business columnist Thomas Lee had taken stock of the popular app and threw some cold water on the notion that the game would do much for retailers, by asking a fundamental question—would Pokémon Goers become, you know, customers?
“Yes, the game can drive traffic to stores, but will people actually buy anything?” he wrote. “For retailers, the limitations of ‘Pokémon Go’ are similar to the challenges of trying to get people to purchase something through Facebook or Twitter. People go to social media for entertainment and communication, not necessarily to purchase clothing or laundry detergent.”
Pokémon Go players do spend money — it’s possible to make catching the little monsters and playing group games easier by buying upgrades like extra Pokéballs and various lures — but that doesn’t mean they’ll take a break from their game to shop in the store that just provided them with a shot at catching a Zubat.
Actual potential for retailers? We may never really know.
Before marketing experts have been able to really crunch the numbers on any boon to retailers, Pokémon Go seems to have fizzled. By mid-August, just a month after its launch, the game had lost some 20% of its user base in the U.S. And even in July the app was showing weakness when it comes to stickiness.
Then, in early September, retail data analytics company Slice Intelligence revealed that the game’s U.S. paying population has declined by a whopping 79 percent since its number of in-game buyers peaked on July 15th.
There is one nugget from the Slice report showing how the game has indeed been meaningful for some retailers: Pokémon merchandise sales have skyrocketed. Revenue from branded Pokémon toys and games grew a tremendous 233 percent in August compared to August 2015, and branded apparel sales in August outpaced even those at Halloween last year, usually the high-water mark for Poke-apparel.
Pokémon’s swift fall may have a lot to do with the end of summer vacation in the U.S., and the return of tens of millions of children to classrooms. Or it could be that, as some gaming enthusiasts complained early on, it’s a game with limited staying power (a complaint that was also applied to the Niantic’s Ingress game, by the way).
Chances are, if you’re a retailer that bought into the Pokémon Go craze, you may have brought along a few customers, and maybe a few even bought something. Hopefully, no matter what, you had fun. But if you didn’t, take heart. It looks like Target’s Cartwheel app, and others like it, with customer-facing lures like loyalty, product information, coupons, and shoppability, may not be the mobile slouches some Pokémon Go aficionados once thought they were.