Aug-mental Reality: Pokémon and the AR Retail Conundrum

My coworkers have lost their minds. As I entered the elevator yesterday morning after having picked up my morning Sumatran brew from the cafe on the first floor, a young businessman quickly hopped in the lift behind three of us who had already taken up residency each of us gripping our choice of morning medicine from the cafe.

We were all quickly distracted by the young man’s need to hold up his smart phone to scan the interior of the elevator and each of its temporary residents. He was in a desperate search for a Pokémon. Each of us smiled gently and held back our laughter. But the event made me think more about augmented reality and the launch of Pokémon Go by Niantic. And since that unusual elevator experience, I’ve been wondering if this app could be the proof that retail needs to up its investment in mobile.

pokemon-AR-1.jpgAs a forty something marketer and Sony PS4 owner, I’m no stranger to new games and new tech. I grew up at the start of the gaming revolution. Atari, Sega, Nintendo. Social gaming for us was having friends over to battle it out in a new Street Fighter game and on days when our friends couldn’t meet up, then we had 15 metres of phone extension cable and we could be found in our bedrooms cradling the phone’s receiver under our ear and neck so we could work out how to get through a newly found Zelda board or locate that near impossible to find energy tank in Metroid.

Until now however, my opinion of augmented reality has been low and has tended to compare closely with virtual reality. I witnessed the birth of virtual reality only to watch it struggle along for years as new developers came along to try to revive it with new ideas. The challenge for VR has been getting the technology, often considered expensive when dealing with a price sensitive and tech savvy consumer, into the hands of those same consumers.

With augmented reality, however, everyone has a smartphone. According to a recent annual Mobility Report by Ericsson, there are an estimated 2.6 billion smartphones in use globally. So in my opinion, augmented reality has a far better shot at succeeding than a stand-alone piece of tech. Of course, at the moment I’m largely ignoring Samsung Gear VR and Oculus Rift. I think the jury is still out (for me at least) although sales seem strong with over 8 million units expected to be sold by the end of this year (2016) for the above products according to Statista.com.

As for augmented reality, the birth of Pokémon Go may be the propellant AR needs to solidify itself in the minds of consumers. But will it also be the catalyst retailers need to increase investment in mobile apps? According to our research at Fifth Quadrant and ACA Research, 62% of organisations we surveyed say they’ll be investing in mobile over the next year. But hopefully this investment will be in smoothing out the omni-channel experience for consumers.

Australian retailers rated poorly for consumer experiences with shopping on the Web and via mobile devices, where the dissatisfaction level for consumers garnered customer experience index (CEI) ratings of just 39% and 33% respectively.” ITWire

As of publication date, there have been over 15 million downloads of Pokémon Go in the US from Apple’s App store and Google Play according to SensorTower. To give you a bit of comparison as to how successful the launch of Pokémon Go has been, according to SimilarWeb, the two most popular mobile apps of recent success, are Clash Royale and Slither.io and each had user penetration of 1.67% and 0.84% daily user levels respectively, among Android users in America four days after launching. By comparison, Pokémon Go hit 10.81% daily user penetration level four days after its US launch. Simply put, WOW!

It’s so suddenly popular that it has outstripped Facebook for our attention, again according to SensorTower, capturing 33 minutes of our daily attention compared to Facebook’s app getting 22 minutes.

ATTENTION: On a side-note, a co-worker nearly caught a Poliwhirl. Sadly it sat just outside the office window and from the 6th level posed a bit of challenge and risk to capture.

Recently, our resident CX expert, Steve Nuttall sat down with Jerry Macey, National Manager, Retail Industry at Commonwealth Bank Australia. Part of the discussion focused on mobile and the overall retail experience. With sales via online mobile apps and stores having increased from 18% to 23% over 6 months and expected to climb to 35% by 2020, according to Macey, it seems clear where retail is headed (full CBA Retail Insights Report here).

Yet even though our desire to shop online via mobile is increasing, the apps themselves aren’t necessarily delivering and living up to our expectations as outlined above by ITWire. Consumers want simple check-outs, in-store pick ups, ability to try it at the store and buy it while having an afternoon drink with a friend or according to our CX guy Steve, in a taxi on his way to the airport. The point is that, the power to purchase what we want, when we want it has really shifted to the consumer. We no longer have to worry about store hours as we can get some of our product and delivery questions answered by a Facebook chatbot.

But where will AR fit into this developing omni-channel experience? Can a Pokémon style retail app be what consumers are looking for? Since the release of the 2012 beta launch of Ingress and poor market performance, one thing is certain, Niantic’s launch of Pokémon Go displays an amazing evolution of the technology, combined with clever algorithms and unprecedented user interaction and on-boarding for an AR app.

For retailers looking to engage customers more deeply, this could be the answer. If Pokémon Go continues to grab the collective attention of the planet the way it has in its first week, I suspect we should start seeing some creative ideas and apps begin to emerge on the coat-tails of this already hugely popular and successful game.

Where does your business stand with respect to mobile and AR development? Add your insights below.

Brad Arsenault

Written by Brad Arsenault

Brad is the Head of Marketing at Fifth Quadrant. For over 16 years he's worked across digital marketing and content production. He actively publishes content on LinkedIn and Medium.

Topics: virtual reality retail insights augmented reality CX CX Articles & Insights

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