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Digital Disruptors: Commerce Lessons from Pokémon Go Craze

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The augmented-reality mobile game Pokémon Go has captured the attention of consumers to the point of creating mobile zombies who walk into light poles or into traffic as they explore their local communities to catch virtual Pokémon via their smartphones. To put the rapid rise of the game into context, this mobile app already had more active users than Twitter in the US within a week of its launch, based on data from SimilarWeb. In addition, Nintendo, which owns the Pokémon franchise that was first introduced in the 1990s, has watched its shares increase more than 50% since the game’s release.

Pokémon Go, which was first released in early July in the US, Australia and New Zealand, leverages a smartphone’s various sensors to understand where and when a participant is in the game. Users can move around the physical world to uncover locations of Pokémon, which come alive in the physical world thanks to augmented reality. Indeed, augmented reality, which is the term used to describe the fusing of the real physical world with a virtual one, is receiving its close-up among mainstream consumers.

One of the main ways that Nintendo and Niantic Inc., which is the developer and distributor of the free-to-play app, will make money off this craze is through in-app purchases. Like other free-to-play apps, gamers can make in-app purchases for Poké Balls and Lucky Eggs to aid in their mission. Euromonitor International projects the mobile in-game purchases market globally will grow 20% to reach US$29.8 billion in 2016, with the three largest markets being China, Japan and the US. The Pokémon phenomenon has impacted other aspects of commerce as well.

Pokémon Go Mobile App Experience


Source: Euromonitor International

This swarm of mobile gamers has not gone unnoticed by merchants seeking to cash in on the extra foot traffic. It is an especially interesting development for brick-and-mortar outlets, many of which have struggled recently due to falling foot traffic and these same mobile devices that are enabling consumers to purchase goods and services from anywhere. To take advantage of the increased foot traffic created by Pokémon Go, some owners have set up sidewalk signs to invite gamers to come in and hang out. In addition, merchants can buy a Pokémon Go feature called Lure Modules to drive foot traffic for a 30-minute period. Niantic, the developer behind the smash hit, recently announced it is planning to give retailers and brands the option of paying in ordeer to be prominently featured in the game’s virtual map.

But even more interesting is what the Pokémon Go phenomenon is teaching aspiring commerce providers about the ability to drive mobile engagement and thus mobile app adoption. The overnight success of Pokémon Go and its ability to leverage geolocation, augmented reality and gamification to mix real world and virtual experiences has given aspiring digital commerce providers a glimpse of how a fully immersed digitally enhanced commerce world might take shape and what that could mean for consumer engagement with their mobile apps.

While there has been no shortage of hype around the potential for mobile to power commerce made in store or even on the go, few apps have cultivated the sort of cult-like following that Pokémon Go has captured – let alone in a matter of days. The secret to the success is that Pokémon Go’s developers utilized a variety of different technologies to create an experience that first and foremost executed on its primary objective, which was entertainment. Neither the technologies nor commerce took centre stage. Instead developers focused on creating the ultimate online-to-offline experience that gripped the imagination of its participants. From there, the popularity of the game has driven commerce, but that occurred as a byproduct of the participant engaging in the game in the first place, not the other way around.

After this fad subsides and some consumers inevitably uninstall the mobile app, the takeaway for aspiring digital commerce providers will be the need to seamlessly stitch together the capabilities of various technologies to create the type of experience that drives engagement and ultimately stickiness to their mobile app. As has already unfolded with the payment, commerce increasingly will take a backseat in the minds of consumers. The future growth of commerce will be rooted in highly engaging scenarios like gamification or social media that will capture and retain the attention of up-and-coming consumers. The brands that can insert themselves into the game or conversation without seeming intrusive or pushing a hard sell will be the ones most likely to win.

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