To unlock characters you can play a certain amount of Smash matches. After you've played the required amount of Smash matches a challenger will appear, defeat that challenger in order to unlock the character.

Character	How to unlock
Bowser Jr.	Play 100 Smash matches or beat Classic Mode on Normal difficulty as Bowser.
Dark Pit	Play 50 Smash matches or beat Classic Mode on 5.0 difficulty.
Dr. Mario	Play 60 Smash matches or beat Classic Mode on Normal difficulty as Mario.
Duck Hunt	Play 110 Smash matches or beat Classic Mode on Normal difficulty as Luigi.
Falco	Play 20 Smash matches or beat Classic Mode 1 time.
Ganondorf	Play 80 Smash matches or beat Classic Mode on Normal difficulty with Link.
Jigglypuff	Play 120 Smash matches.
Lucina	Play 40 Smash matches or beat Classic Mode on Normal difficulty with Marth.
Mr. Game & Watch	Play 90 Smash matches.
Ness	Play 10 Smash matches.
R.O.B	Play 70 Smash matches.
Wario	Play 30 Smash matches or beat 100 Man Battle.