Here’s a quick question: If you could make a $10 investment and increase your retail sales by an estimated 75 percent, would you? The answer seems simple, and hundreds of retailers have adopted the promising approach. But there are others that actively avoid and even ban the investment on their property. What could prompt such divergent reactions? Pokémon Go, of course.

Since the app landed this summer, Pokémon Go has been downloaded by more than 15 million consumers. These players actively seek out Pokéstops and Pokégyms, many of which are located in malls and stores, in addition to public settings like parks and landmarks. Accordingly, some retailers have entered into sponsorship agreements, drawing hundreds of customers in search of rare monsters in their stores. For one New York pizzeria, investing just $10 to make its location a Pokéstop increased its sales by 75 percent in just one weekend’s time.

For malls, the promise seems even greater. Malls depend heavily on foot traffic metrics; the more people walking through the mall, the higher rents they can charge to tenants. Faced with years of declining performance, many malls are embracing the virtual reality promise and inviting players in, with the hope that they will look up from their phones at least once in a while, to notice the retail offerings on display around them. One T-Mobile store took the link even further, hanging an attention-grabbing sign in the windows of its mall location that encouraged consumers to get a new phone that would help them use the Pokémon Go app more effectively.

Yet some retailers dismiss the connection to the app as bad for business. People’s general annoyance at the players who often fail to pay much attention to the real world around them might represent a negative effect on other consumers in the store setting. Non-players thus might avoid a store that actively invites more Pokémon-glazed wanderers and get in the way of their efficient shopping tasks.

Still, the vast success of the app suggests that even if the immediate fad fades, the application of augmented and virtual reality has some interesting implications for retailers. For example, one Woolworths in Australia used each Pokémon capture in its store as a reason to connect on Facebook with the player who caught the monster. Moreover, the popularity of the simple, straightforward game app may offer some lessons to retailers that dream of having similar levels of engagement with their customers. Developing strong game apps that are specific to a retailer might cost more than $10, but the returns might be unsurpassable too.

Discussion Questions: 

1. How can retailers leverage the Pokémon Go fad?

 Source: Glenn Taylor, Retail Wire, July 18, 2016