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As the Pokemon Go frenzy subsides, online retailers are still cashing in

August 15, 2016 04:24 PM
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(Bloomberg) -- Even as the initial craze for Pokemon Go wanes, companies that sell merchandise tied to the augmented-reality game are benefiting.

U.S. online sales for Pokemon-branded merchandise rose 105% in July compared with the previous year, according to Adobe’s Digital Price Index, which tracks sales from two-thirds of the Fortune 50 companies. Branded items include toys, electronics such as video games, and T-shirts, caps and other apparel.

The items that perform well online often are big sellers in stores, said Jaimee Minney, vice president of marketing and communications at Slice Intelligence, which tracks digital commerce. Party City Corp. (No. 225 in the Internet Retailer 2016 Top 500 Guide), Hasbro Inc., Scholastic Corp. (No. 90), GameStop Corp. (No. 45) and Build-A-Bear Workshop Inc. (No. 663 in the 2016 Second 500) are among companies that have licenses to sell Pokemon-related merchandise in the U.S., according to data compiled by Bloomberg.

If consumer interest in the resurrected 20-year-old brand continues, the sales bump might extend from back-to-school to the holiday season, good news for merchants struggling with sluggish sales.

“Retailers should really see these trends percolating in the market, and online is really a place they can get a jump on it,” Minney said.

The game -- a venture of Pokemon Co., Nintendo Co. and Niantic Inc., a Google spinoff -- spurred a global phenomenon after its July 6 launch. Smartphone users downloaded a free app that led them to various locations, or Pokestops, to catch creatures called Pokemon. Players became so involved in the quest that some users stumbled upon dead bodies, were robbed at gunpoint or fell off cliffs (those people survived). It became the most downloaded app on both Apple and Android phones within days of its release in the U.S., Australia and New Zealand.

GameStop Chief Executive Officer Julian Raines said in an interview last month that more than 400 of the company’s stores were Pokestops, and that sales were up 100% in those locations.

While no hard figures are available for in-store sales, Ansony Morales, assistant manager at a Build-A-Bear in Fairfax, Virginia, said more customers are seeking Pokemon-related merchandise. Build-A-Bear, which lets customers create their own customized stuffed animals, started offering the Pikachu toy after the company partnered with Pokemon Co. in October.

“It feels like the ’90s all over again,” said Morales, who is 22. “We just had a group of kids in the store that got a lot of Pikachu dolls and they were playing and talking in the cute Pikachu voices.”

Pokemon Co. said it plans to bring more games to market later this year. Video games, like Pokemon Sun and Pokemon Moon, will launch in November.

That will be just in time for the holiday season, a test for retailers, Minney said, to see if Pokemon Go has staying power.

 

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