Why the wearable wave is set to become a tsunami in 2019

The term ‘Wearables’ has been one of the buzzwords of the last decade or so. Such is their ubiquity nowadays that a walk down almost any street in any city in the world will reveal a varied line-up of devices of all shapes and sizes emblazoning your fellow pedestrians’ wrists.

However, if predictions are to believed, wearables are only just getting started.

According to Research firm CCS Insight, global sales of smart wearable devices are projected to double between 2018 and 2022 to 233 million units. Their popularity is largely thanks to Apple, who is the market leader, and who recently extended its product range with its Series 4 Apple Watch which they claim has been “fundamentally redesigned and re-engineered to help you stay even more active, healthy and connected.”

The new series is more accessible than ever as it offers a broad range of functionality at different prices. Ranging from its base £399 model all the way to £1499 for the Hermes 44mm stainless steel case paired with the Fauve Grained Barenia calfskin strap.

Apple's "Wearables, Home, and Accessories" category, which used to be called the "Other" category, has surpassed the iPad in revenue and is closing in on the Mac line-up as well with predictions of 40% year-on-year growth in 2019.

Battle of the wearables

When they first broke onto the scene, wearables were trumpeted as ‘the next big thing’ after the smartphone that was set to transform the lives of users. The market grew rapidly between 2014 and 2018 as new entrants entered the space, but wearables now look set for a period of consolidation as the market matures.

Fitbit’s shares have begun to take a dive, after initially taking an early lead in the wearable tech space, the company also announced it will cut up to 6% of its workforce. Analysts believe the layoffs could be part of an adjustment period as the company pivots toward developing and integrating smartwatches into its larger offerings, highlighting the fact that the wearables market is still in a state of flux.

As Fitbit continues to lose much of its market share, Apple is dominating the smartwatch market while at the same time China-based manufacturers such as Xiaomi are gaining ground by offering much more affordable products. The Mi Band 3, which some have argued is superior to Fitbit’s line of products, comes with just as many features including sport tracking, weather forecasting and even the ability to make contactless payments at a price point that is four times cheaper than its western rivals.

Research firm CSS Insight notes the increasingly important role of Chinese supplier Huami. At present, most of these are fitness trackers, but more than 2 million units will be smart sports watches. Huami’s success has buoyed the worldwide fitness tracker market, which will record total sales of 43 million units in 2018, after a dip to 39 million in 2017.

The rise of wearable service revenues

Much like the smartphone market before it, the move to market maturity will occur in tandem with a move to more service-led initiatives to drive even more revenue growth for device manufacturers.

Device makers will look to make money by selling data generated by those wearing the devices, for example, selling data produced by the devices to insurance providers.

Juniper Research forecasts that service revenues of this nature will reach $855m by 2023 although it anticipated that data privacy and consent will be a ‘significant barrier’.

Healthcare and insurance will dominate the market, at least initially, However, for insurers, the health data locked within a policyholder’s wearable device is already proving too tempting a treasure trove to ignore with some already requiring a data feed for a policyholder’s device as a condition of their policy.

The key battle then for the wearable service sector is going to be harnessing and monetising this user data while at the same time convincing users that such data collection is beneficial to them.

However, research by Columbia Business School found that with 75% of consumers willing to share data with companies in exchange for a product or service they value and a brand they trust, the potential for device makers and platform owners to drive even more brand loyalty and awareness is massive.

What’s in it for retail?

Aside from the steady stream of new devices hitting the market and steady sales figures, 2019 looks set to be a break-out year for wearable payments too.

Previous implementations have been gimmicky but as proximity payment options like contactless continue their ascent it’s inevitable that more consumers will opt to tap and pay with their smartwatches and fitness bands.

Incentivising transactions with special offers or other data-driven benefits such as loyalty points is only going to further drive adoption and uptake. And with 80% of consumers saying they’re willing to exchange personal data with brands for personalised offers and benefits, according to the same research mentioned above, it’s further opportunity for retailers to drive brand loyalty too.

Wearables aren’t going anywhere

Wearable technology products are here to stay – at least until chip implants usher in a new age of intimate computing. But it’s about much more than exciting new technology and product lines. It’s further moves to more service-led wearable platforms that are going to be the central wearables story of 2019.

For brands and retailers, this means even more opportunities to drive loyalty through seamless payment options and loyalty schemes, as well as yet another platform to compete for consumer attention.

Wearables are just getting started then, and if you haven’t already started considering how to implement them as part of your business, now would be the time to start.

What do you think? Are wearables here to stay or just a flash in the pan? Have you already begun to explore ways to implement wearables as part of your business plan? Let me know in the comments below and don’t forget to like and share!