Augmented Reality –  a Boon for Local Businesses

Published: July 17, 2016 by admin

In just one week, Augmented Reality (AR) proved itself to be the Next Big Thing in popular entertainment. Within days of Niantic Labs release of Pokémon Go, in which players “hunt” and “capture” fantastical creatures using their smartphone cameras, tens of millions of Americans have become hooked on the game. According to media reports, the app has already been installed on twice as many phones as Tinder™, is used twice as much as Snapchat, and is surpassing the all-powerful Twitter in its number of daily active users. The skyrocketing value of parent company Nintendo’s stock price has provided further testament to the game’s perceived long-term stamina.

Beyond its nostalgia value — the game is based on the popular Japanese cartoon and videogame series from the 1990s — Pokémon Go is winning over hearts, minds and dollars due to its artful blending of fantasy game play and real-world locations. To play the game, participants must move through the physical world, often traveling many blocks or even miles in search of their elusive digital prey. Such material engagement — and the physical exertion required to complete many of the quests — is a far cry from the sedentary “couch potato” stereotype so long associated with video-gaming.

Marketing opportunities for local businesses

It’s also offering surprisingly lucrative marketing opportunities for many local businesses.

Shops, restaurants and other commercial operations who find themselves near one of the game’s many “Pokéstops”(virtual pit stops) and “gyms” (digital combat arenas) are seeing a marked uptick in foot traffic. Many stores are actively advertising via social media their proximity to game elements and the Pokémon that players have found nearby. Chicago’s famed Art Institute received wide coverage for their boasting of various Pokémon found within their hallowed galleries, complete with iPhone screen shots of cartoon monsters perched amidst the Renoirs and Chagalls.

Assuming the appeal and popularity of AR is more than just a passing summer fad, the short-and long-term potential for local businesses appears to be huge. For example:

  • Referrals: A referral program is one fast and easy way for local businesses to take advantage of the Pokémon Go phenomenon. For example, shop owners can offer to play for players’ “incense,” a virtual commodity used to attract the game’s creatures, in exchange for the use of screenshots showing rare Pokémon that show up near their establishment. They can offer players similar rewards for store photos and check-in’s that players post on social media sites such as Yelp or Facebook. Shops can even offer game-based “bounties” for the capture of Pokémon found in or near their stores, thus driving up foot traffic.
  • Local Sponsorships: Seeing a cash cow (or cash chiamander) when they see one, Niantic, Inc., is reportedly developing a program that will allow local businesses to actively sponsor themselves as Pokéstops or Pokémon hiding locations, virtually forcing eager monster-hunters through their doors. Sponsors will be charged on a “cost per visit” basis — similar to “cost per click” fees on the Internet — according to Niantic CEO John Hanke.
  • National Sponsorships: As the success of Pokémon Go spurs the creation of other AR games and experiences, national sponsorships may provide developers with yet another, highly lucrative source of income. “National branding could be huge,” said Mark Schaefer (@markwschaefer), globally-recognized speaker, educator, and business consultant. “Imagine, a Pokémon character drinking a Coca-Cola. That would be hilarious. The Nintendo stock price went through the roof because of that very idea.”

But such commercialization of the Pokémon Go experience must be done with discretion, according to Schaefer. “The whole Pokémon Go game experience is built on passion for this product; passion and trust,” he explained. “Most players loved Pokémon as children. It’s an emotional trigger. If the game starts to look like a NASCAR jacket, with ads all over it, people are going to reject it. But I think that, in this day and age, people expect a certain amount of sponsorship. There can even be a certain amount of surprise and delight associated with sponsorships. The key is to make such sponsorships integral to — and in the spirit of — the game itself.”

In a sense, Pokémon Go is the “Space Invaders” of AR, a breakout game that serves as a “proof of concept” for a whole new entertainment platform. Expect more, increasingly immersive and engaging games that seamlessly blend the physical and virtual worlds to follow. And with them, more opportunities for businesses large and small to generate real-world business by becoming part of the gaming experience.

If you are a local business looking for some creative ways to capitalize on the Pokémon craze, check out Fundera’s great blog post – How to use Pokémon Go to Drive Business.

Follow Us!

Subscribe to our blog

Enter your name and email for the latest updates.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

About this blog

The latest insight, tips, and trends on all things related to commercial risk by the team at Experian Business Information Services. Please follow us on social media.

Stay informed by subscribing to this blog

Sign up for email notifications when new content has been published by Experian Business Information Services.
Sign Up