And it's not just a tool for hunting shinies either. It's also used to find pokemon with Hidden Abilities according to Bamb'o. Welp, that's getting permanently registered in my key items list.

It's a post game item received from the professor when visiting him after the main story, as per usual with most pokemon games that have it.

EDIT: screenshot for proof: http://i.imgur.com/YRAZOQI.png

EDIT 2: seems like chains are a little too easy to break. I can't quite get it to work like it should all the time. I go to spots where a pokemon should appear, and the chain breaks and no battle occurs. Seems like it could use some fixing.

EDIT 3: Actually, chaining might not even be possible right now...also, as a side note, the shaking grass is even briefer than it is in the main series. Ugh. Definitely needs some work.

EDIT 4: HAs can't be obtained with the Pokeradar yet, it seems. So it's not worth much of anything right now :( credits to u/Sheeplette

EDIT 5: Chaining apparently works as long as you aren't using repels? Anyone else able to confirm this? credit to u/safetyshark