It’s the reason you are seeing large random groups wandering the streets of New Zealand, their faces buried in their screens as they try to catch Squirtles and Bulbasaurs.
Making use of the GPS and camera on their phones, players follow an interactive street map as they hunt the game’s 151 Pokémon.
The augmented reality game, which is based on the popular Nintendo game and cartoon series, has been downloaded by more than 40 million people since its launch in July. It has been praised for encouraging exercise and criticised for causing accidents. It has also helped boost the economy – or the Pokéconomy – as retailers and restaurants capitalise on the sudden influx of people passing their premises looking for imaginary creatures.
Pokéstops are found at many public places such as monuments, public artworks, statues and meeting places while gyms are often located at cafes, hotels and restaurants. The locations of both were pre-determined by the game's developers, Niantic. For businesses with cash to spare, the game allows users to buy ‘lure’ and ‘incense’ incentives that attract Pokémon to a particular location for 30-minute periods.
With location-based advertising set to be the game’s biggest revenue stream, Niantic struck a lucrative deal with McDonald’s in Japan – giving the chain’s 3000 restaurants there premium gaming status.
Analysts believe that the advances in geolocation – the engine powering Pokémon Go’s success – have given advertisers the power to reach out to consumers and serve them ads where and when it’s most relevant to them.
Data is the name of the game. Niantic, like Facebook and Google, tracks users’ movements and habits. They know where you are going, what time you are going and how long you’ll stay once you get there - and it stores all of that information, which is incredibly valuable to advertisers.
The technology is building a huge database of millions of locations, each tagged with keywords that marketers can use to target specific groups with mobile ads.
Retailers have been urged to embrace Pokémon Go and use it to increase customer engagement and loyalty.
Pokémon Go shows how augmented reality could play a more significant role in retail. Using it to drive higher foot traffic seems like a no-brainer. Blurring the real world with augmented reality is a real opportunity to influence our spending.
Supermarket retailers have already started to use a combination of virtual reality and augmented reality, using the virtual reality experience to map out a store and overlaying that with an augmented reality experience, so shoppers can grab items they want to buy as they move around the virtual supermarket.
Apple, which stands to make US$3 billion from the Pokémon Go craze in the next two years, is heavily investing in augmented reality, with CEO Tim Cook telling investors that the technology is going to be huge. A report by Manatt digital media predicts augmented reality will generate US$80 billion in revenue by 2020.
For the property and building industry, AR and VR are the next big steps. According to a new report by property analysts Cushman and Wakefield, Geospatial Analytics, indoor mapping and virtual viewing will allow consumers to visualise spaces and buildings that have yet to be completed, or in another location.
It will allow commercial real estate operators to readily create specific strategies to market their spaces. This in turn will make it easier for buyers to compare properties, and to undertake due diligence even on their smartphones or desktop.
Enhanced tracking and monitoring of a building will even result in more granular valuations. Such data can readily be called on by market players to determine the health and price of an asset.
This story originally appeared in NZ Retail magazine issue 746 October / November 2016