Pokémon Go Is Inspiring Small Retailers. So Has Augmented Reality Gone Mainstream?

Driving foot traffic via gamification

Pokémon Go, the mobile game that has millions of people running from location to location, isn't just a tech-bubble fascination on the part of the Twitterati—it's boosting local businesses in the American heartland. Indeed, augmented reality, or AR, appears to be getting its close-up on Main Street. 

"This weekend, we were just people-watching and noticed everybody staring at their phones," said John Merritt, manager of CitySen Lounge, an eatery and bar in the CityFlats Hotel in Grand Rapids, Mich. "So, we put the sign up around 3 p.m. on Saturday."

Smart move, evidently. That sign has driven considerable patronage to the lounge, Merritt said, underscoring how popular Pokémon Go has become in such a short time. 

Since the app was released last week, it has added more than $7 billion to parent company Nintendo's market value. By yesterday, Pokémon Go already had more users than popular dating app Tinder and was set to surge past Twitter in daily active users on Android devices. Pokémon Go also ranked ahead of Facebook, Instagram and Snapchat in Google Play.

Inc. reported that store owners can buy a Pokémon Go feature called Lures for as little as $1.19 an hour to drive foot traffic. Merritt said he and his team have been kicking around the idea of buying a Lure, but they may not even need to spend the coin. 

"Our sign, all by itself, is doing pretty well for us," he said.

InconoCLAD, a Salt Lake City clothing store, is employing a similar sidewalk sign. "I'm not sure if it's responsible for a huge uptick of customers, but people playing the game are coming in and hanging out," said Markelle Mordue, a manager at the shop. "We are huge Pokémon fans, so we are having fun with it."

Aaron Werner, Main Street program coordinator for Historic Downtown McKinney in McKinney, Texas, this morning used his monthly meeting with local businesses to educate them on how take advantage of the app's popularity. There are dozens of Pokestops—places of interest that players scope out—in the area thanks to its downtown monuments, Werner explained. 

"There have been a ton of been people out playing the game," Werner said. "The members of our business community at the meeting had already heard of it—because it's everywhere."

The buzz is palpable. As of yesterday, per Spredfast, the game had been mentioned on Twitter 6.6 million times, with 59 percent of the chatter coming from young males. The discussion peaked Sunday night at 10 p.m., when 130,000 tweets about the game were being fired off during the hour.

The city of Anaheim, Calif., has created a blog so people can find the best Pokémon Go spots in the area. Paul Shapiro, director of search innovation at Catalyst, a WPP/GroupM agency, said the game was exposing "a pretty large set of consumers" to augmented reality. 

Shapiro mentioned that his local hangout, The Publick House in Brookline, Mass., was utilizing the app to bring in customers. He recommended businesses offer discounts and buy the aforementioned Lures to hop on the high-speed Pokémon Go train.

"It's incredible how it's everywhere," Shapiro said. "It's all ages, genders. It's obviously massive."

Why '90s nostalgia could help push a wave of the future

So, what exactly is Pokémon Go? It employs a smartphone's GPS to alert users when they are "in the game"—or when a Pokémon character appears on their phone in augmented reality. The concept entices players to move around their locale and earn points by catching such characters. Niantic, the developer of Pokémon Go, offers a similar, AR-based game called Ingress that has failed to hit critical mass. Many gamers are comparing the two games' features. Niantic has stated that sponsored Pokémon Go locations for businesses are imminent.

Pokémon was created by Satoshi Tajiri in 1995 and became a hit video game during that decade for Nintendo. So, is this current development a brief explosion of '90s nostalgia or a showcase for the power of local AR?

Shapiro said he suspects the app's explosive popularity "is more representative of the Pokémon brand than anything about AR."

Whitney Fishman Zember, MEC's managing partner of innovation and consumer technology, had a different take on Pokémon Go's larger impact.

"While consumers don't necessarily think in specifics like, 'This is an AR game versus a basic mobile game,' anything that helps them engage with AR's offering of adding a digital layer of context and experience over the physical world is vital," she said. "It allows people to get comfortable with the notion of these digital layers they can experience will help consumers get comfortable with the concept, opening up opportunities—and the mindset—for other experiences." 

The phenomenon also exposes more brand players to AR's potential, suggested Ari Brandt, CEO of MediaBrix. "Through AR, marketers can use location data to offer exclusive content to drive foot traffic, not to mention hyper-targeted deals and offers," he said. 

It's the sort of monetized gamification that Foursquare aspired to in recent years but never accomplished. Therefore, it will be worth watching whether Pokémon Go can maintain its mojo among retail marketers. 

"Pokémon Go essentially breaks down the wall between technology and real-world experience, so as brands drive people into new locations, there's a real opportunity for them to do more ambient marketing that isn't exclusively digital," said Jamie Gallo, president at Wunderman New York. 

Marty Swant contributed to this article.