Who knew wacky cartoon characters would revolutionize location-based marketing?
Seemingly overnight, the Pokemon Go craze has resurrected the potential of location-based marketing on a massive scale. Retailers are only now starting to understand what that means and the power behind reaching a customer when he or she is just outside their store.
The phenomenon can’t be underestimated. It’s the most downloaded mobile app to date, and even more amazing is how much people play once they download it. People on average use only 10 apps on a regular basis. With Pokemon, 70% to 80% of those who download it actually use it. That’s huge.
It says a lot about what people are willing to do, given the right vehicle.
So what are people training themselves to do? On the surface, they’re placing animated characters into real-world spaces. They start just the way people use their phones to take pictures or video, but instead of seeing the world as is, they’re seeing an augmented reality (AR), in which Pokemon characters appear. When they pop up, players can toss cartoon balls at them to score points.
When Google Glass came out, it touted a similar concept. For instance, people could use the glasses to see their way through an unfamiliar city. Directional arrows would pop up as people looked through their glasses, guiding them to the subway or to specific corners.
Now imagine a potential customer finding a cartoon character in front of your store, possibly quenching its cartoon thirst after a hot day in the sun. What if a reward of an actual bottle of water appeared in the game? It’s a marketing dream.
Go Where They Are
While naysayers just see a game, all this active AR is a major stepping stone. As large numbers of people begin to use AR for fun, the next step is to use AR as a way for customers to find relevant rewards or promotions.
AR is not a simple concept to teach and is much harder to get large numbers of people to physically do. Yet that’s what Pokemon Go did. Of course, it would not have happened without today’s sophisticated mobile phones.
What’s also getting more sophisticated is what consumer packaged goods (CPG) manufacturers and retailers can do to make what they offer to their customers relevant. For instance, the app we provide takes in all the value-driven information stores give us—coupons, discounts, offers—and digests it so that a person standing on a street corner can view the stores around them and see offers of interest.
It’s the power of location: being where the customers are and intersecting that knowledge with what they’re doing at the moment.
Companies spend $6 billion to $10 billion a year in physical advertising, such as printed circulars and catalogs, even though it’s a blind process. Meanwhile, more and more customers are migrating quickly and on an incredible scale to digital devices.
For CPGs and retailers, the move to digital coupons and promotions makes sense. It’s less costly and a more targeted spend. More important, they’re developing systems to track what their customers are buying so they can make more relevant offers.
For c-stores, the impulse purchase is key. Location goes hand in hand with that. We’ve found that with many retailers, if a customer opens the company’s app, it’s an indication of interest in shopping. There’s a huge correlation between opening an app and that customer visiting the store within 24 hours.
Imagine adding the power of proximity: Knowing the consumer is in front of the store should be a huge opportunity to initiate an impulse purchase.
Your Ad Here?
Getting back to Pokemon, I’m sure over time, there will be a ton of sponsorship opportunities and ways for retailers to get involved. It would be an interesting trick for a retailer to fine-tune the experience so that it ties back to the game and the gamer in an authentic way. We’ve seen it with Xbox when digital auto-racing or football games had real-world integrations with NASCAR or the NFL.
Initially, it will be totally dependent on what Nintendo will allow. I’m sure the company in its wildest dreams didn’t think it would reach such scale, but even some of the first successful gaming apps didn’t allow branding right away.
In the end, it’s all good news. People are discovering new ways to use mobile technology and, on the flip side, retailers are bringing their A-games to the table—and hopefully to people’s phones.
Nels Stromborg is executive vice president of retail-app company Retale. Reach him at nels-stromborg@retale.com.
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