Will Pokémon Go help Retailers to new Heights?
News are filled with projections that Pokémon Go is a blessing for brick-and-mortar stores. But the real value of the underlying augmented reality technology is with their arch rival: Online retailer.
Only the pre-digital generations will remember the original Pokémon game of the 1990’s. It was played on a device called “Game Boy”.
On July 7 of this year, Nintendo released the modern version of Pokémon which is built for mobile devices and is using augmented reality (AR) technology. Within the first week it was downloaded 7.5 million times in the US alone. That equates to almost 750 new users per minute.
The Pokémon craze created some unusual behavior. Police in Forest Grove, OR, reported that a man was stabbed playing the game in a convenience store. People were hunting the little monsters through the U.S. Holocaust Memorial Museum in Washington, DC, while Senator Al Franken politicizes the national sensation by raising his concerns about the underlying data-collection policies.
Not only the entertainment news but also the business media reports on the phenomenon.
Nintendo’s stock jumped about 80% compared to July 6th. The monetization possibilities reach beyond the game itself. Retailers across the country are excited about the opportunity to direct potential customers to their locations, using so called “lures”.
Many seem to hope that augmented reality-based games are the clue to revitalizing brick-and-mortar retail. As one retail expert said: ‘Gaming works”.
It is more likely that augmented reality helps the other camp: online retailer. The technology brings a missing critical element from the store into the cloud.
More and more pure play online retailer expand from clicks to bricks. Some like Amazon’s and Warby Parker open fully inventoried stores. Others like Bonobos open “Webrooms” to showcase their products while the transaction is still made online.
Amazon Book Store, University Village, Seattle
By opening stores, online retailer try to overcome their two biggest challenges: enabling the customer to experience the product and providing a human element to purchasing.
But the price paid by the consumer is high: They have to invest personal time. And this time is very precious. The time spent in a store is often small compared to the time needed to get to and from that experience. This does not include any emotional or real costs associated with a disappointing in-store experience.
Augmented reality will not bring the customer to the store. But it can bring the store to the customer:
Whenever and wherever the customer likes.
This has fundamental implications for many product categories including fashion, accessories, watches, jewelry and furniture.
Augmented reality will allow the client to see the product better while 3D modeling will give them a feel for it.
Amazon has filed a patent for a devise that takes the internal measurements of products. By matching products against reference products purchased by the customer in the past, the retailer will be able to suggest perfectly fitting items and thereby taking some insecurity out of online shopping.
It will drastically improve customer satisfaction and reduce the rate of product returns.
AR technology will change how we market products. Classical product advertising tends to show a fantasy world far away for the consumer’s everyday reality. Fast cars, astonishing architecture, incredibly beautiful people in well-styled surroundings are the backdrop for the products we must like.
In contrast, the millennial customer lives in the “here and now”. They are less influenced by a dream world but more by their own world. Replacing that artificial backdrop with their reality and enabling them to experience the product in their own setting will connect the millennial with the brand.
Combining augmented reality with sophisticated real-time video conversations embedded into a rich and interactive ecommerce platform will enable the consumer to explore the brand, experience the product and build trust through human connections.
Augmented reality will take the store out of the mall, into our life.
As for the Pokémon, as time passes we will eventually get tired of slapping monsters around. First came the angry birds before they were crushed by candies. These are now eaten by the pocket monsters. I fear they won’t survive either.
I wonder what comes next. Until then, let’s hope that not too many fellow homo sapiens are run over by cars or fall off cliffs chasing augmented reality.
Jan-Patrick Schmitz President & CEO
About the author: Jan-Patrick Schmitz is the founder of Muirbury & Co. He is a thought leader in the consumer space with extensive experience in international brand management. He has been a guest lecturer at several universities including Harvard Business School, George Washington University, New York University and the Fashion Institute of Technology.