Pokémon Go has became the biggest mobile game in US history – eclipsing freaking Candy Crush with more than 20 million users. The in-game microtransactions are estimated to be generating a mindblowing $1.6 million per day, so I think we can officially declare this has evolved beyond a fad.
Alas, if you’re a small business, I have to rain on the hype parade with some bad news: Pokémon Go in its current state is going to do very little for you, if anything at all.
It’s simply becoming the next hype juggernaut that every business needs to have right now or else you’ll go bankrupt. So before every small business on the planet scrambles to drop a dozen lures and post signs out front, let’s apply the brakes and think about how this app is actually going to benefit you.
You could be forgiven for thinking this app is going to rake in the profits based on media coverage. It’s taken less than a week for the success stories to start popping up complete with needlessly sensationalized headlines:
“Pokemon Go Is Driving Insane Amounts of Sales at Small, Local Businesses. Here’s How It Works. For $1.19 an hour, you can have more customers than you’ve ever seen in your life”
“What Is Pokemon Go and Why Your Small Business Can’t Afford to Miss This Trend?”
Sounds dazzling, doesn’t it? More customers than you’ve ever seen in your life for $1.19 an hour! Except that statement should come with so many asterisks that it’s going to look like a legal document. Let’s address the issues one at a time.
First, a bit of background. The big attraction for small businesses in Pokémon Go is the ability to drop lures. Lures basically turn Pokéstops – which your business can apply to be – into hotspots where Pokémon are more likely to appear. This will generally cause people to congregate in front of a Pokéstop. So you’ve got people conveniently clustered in front of your business – all for the cost of something from the dollar store.
The first and most obvious problem that Pokémon Go servers need serious work. The app is down on a regular basis, with crashes and lockups a frequent occurrence partially as a result of Nintendo being blindsided by the overwhelming success of the app. As it stands, you can’t rely on the game’s servers to behave themselves for when you drop lures.
“Small business” should also come with a qualifier that Pokémon Go only really going to benefit businesses with physical storefronts due to the nature of how the game is played. So if you work out of a home office or even some rented office space, there’s no value to be had here.
Even if we’re exclusively talking about local businesses with storefronts, the type of business that’s actually going to benefit from Pokémon Go is very situational at best. The success stories have already started popping up, with one Redditor’s story in particular has been making the rounds:
We did this last night (college town), and within minutes of dropping the lure, 30 people walked in. Hoooly s#&@.
I own a pizzeria that’s a Pokestop and I literally did this all day. I had a ton of kids and adults (mostly adults) come in for a slice of pizza and a drink until the lure ran out.
As awesome as this is, let’s unpack this informal case study for a moment.
The first noteworthy part of this example is that this is a pizzeria. Pizzerias are unique in terms of being very casual, grab-and-eat, instant satisfaction businesses. Pokémon Go itself isn’t going to get people in the door of a pizzeria; the app just facilitates stopping by the type of casual hangout conducive to this type of behavior. If you’re a furniture store, a clothing store, or even a more formal sit down restaurant, you certainly won’t see a repeat of this case study. In all likelihood, what will happen instead is people will cluster outside of your business and proceed to catch their Pokémon.
You could maybe make the argument that this is good for brand awareness, but to be frank, most people don’t care. I can assure you, when someone is hunting for a Squirtle, the name of the retailer that has a lure out front is the last thing on their minds. There’s also no way of really knowing your business is actually attracting the types of customers you want to reach, which is something you should be considering in an age of specific demographic targeting on Facebook.
Something else to consider is that this pizzeria is located in a college town. It’s a centralized area and the pizzeria is likely already prone to a high amount of foot traffic. In which case, the situational nature of the business already lends itself to attracting visitors with Pokémon Go. Do you think the pizzeria would have experienced the same success if it were in an isolated strip mall, or a cluster of businesses that’s difficult to access by walking? The owner probably would have been able to bring people in who happened to be walking by and playing the game, but I doubt it would have been such a “Hoooly s#&@.” moment.
So this surefire way of detonating your sales also comes with the qualifier of not being nearly as wildly successful if you’re talking about rural, suburban, or even off-the-beaten-path urban businesses.
That’s really the key problem with small businesses and Pokémon Go. It doesn’t do anything particularly new. It just helps to facilitate the type of hangout behavior you would see at pubs, pizzerias, froyo stores, burger places and other casual eateries.
Don’t take my word for it; look at the Reddit thread the very same Entrepreneur article links and note the type of businesses seeing success. Pizzerias, brew houses, Jimmy Johns. Unless you’re in this type of industry (and you’re already established with a client base and people know who you are) you’re probably not going to have people beating down your door in the way articles like this are implying.
Gyms run into the same problem. Even if your business happens to be in the vicinity of a gym you’re probably going to notice small (or large) groups of people clustering where it makes the most sense: Outside on the sidewalk. If you’re a dry cleaner, or a furniture store, or a formal restaurant, how likely is it that people will then walk in, resulting in a sale based on that interaction? What’s more likely to happen – especially in areas with multiple gyms – is people will move in search of other Pokémon to capture or gyms to claim as their own.
Is Pokémon Go a really clever new way to draw customers? Absolutely, and experiment! I’ve seen neat ideas proposed where gym leaders get free T-shirts (although right now gyms tend to change hands every half hour) and different teams get 10% off drinks on different days. With Yelp now filtering locations based on their proximity to PokeStops and Go itself now encapsulating SnapChat and Twitter activity, I think we’ve sailed past the point where this is a fad. Especially with potential for more support by Nintendo down the road.
By the same token, however, we could do without Pokémon Go turning into the latest social craze where business owners get burnt out and disappointed because one lure doesn’t result in untold hundreds of people flooding into your storefront and thus neglect the potential of the platform altogether. We could also do without businesses that clearly stand to gain nothing from using lures jumping on the bandwagon and oversaturating the market.
Pokémon Go has the potential to be another tool in the toolkit for small, local businesses. What it isn’t going to be is your cash cow. Facebook, Twitter, Pinterest, SnapChat; all of these social tools went through a phase where they were the hot new thing and you were going to make piles of money big enough to ski down by using them. Eventually they just turned into another chanel to be considered for the right businesses. Pokémon Go won’t be any different, so think before you start opening the Pokéshop and your wallet.
As for me, I’ve been getting recognized in my neighborhood by other players, so while you’ll definitely see me hunting for the Gyrados that’s rumored to be in the area, it’s less likely that I’ll stop in and buy something.