While sales of wearables are growing rapidly, the key adopters are fitness enthusiasts and techies. The challenge is to expand the appeal of wearables to a bigger and wider consumer segment.
- Sales of wearables projected to remain strong - Forecast sales of wearables are projected to remain strong but demand to date has been largely driven by techies and fitness enthusiasts.
- Not a smartphone companion - Increasingly, manufacturers are trying to develop wearables to function on their own and less as a smartphone companion.
- Services/Recurring revenues - Traditionally, tech companies make money from the sales of products. That said, there is a huge opportunity for companies to position wearables as a tool to market and gain revenue from consumer services and content.
- The senior: a forgotten market - Manufacturers are overly targeting tech-savvy consumers and are not making the
product easy enough for use by elderly consumers (silver economy).
- Healthcare could be wearables' greatest opportunity - Consumers are wiling to share personal data with medical institutions and insurers. While insurers are embracing wearables, medical institutions are eschewing wearables, which is an unaddressed need.
- Fast fashion to attract a new group of consumers - Fashion companies can help to attract a new consumer demographic, who would not have to purchase wearables from traditional tech companies.
Wearables: The next big thing driving growth
Companies were banking on the fledgling category to drive sales, as key products such as LCD TVs, tablets and laptops hit saturation. Wearables are perceived as a smartphone companion and originally, hopes were high that consumers would be keen to purchase wearables. That said, the lack of compelling new use cases, limited functionality and poor battery life has dampened sales of wearables. Forecast sales of wearables are projected to be strong in volume terms but consumers’ interest is largely restricted to techies and fitness enthusiasts. The challenge is to extend the appeal of the product to other consumer demographics or explore new business cases for wearables to encourage stronger adoption globally.
Wearables for children
Later marriage and childbirth, higher rates of female participation in the labour force and rising living costs are just some of the reasons fuelling smaller average household size. In countries where households with one child are the predominant family size, parents tend to be more protective of their only child. At a young age, children are full of curiosity and less wary of people and their surroundings. This makes it a challenge for parents to always keep an eye on their child, especially when they are at work. For parents and in particular, households with a single child, knowing their child is safe is a key concern. In Singapore, a local bank created a tie-up with educational institutions and offered free activity wearables (digital) to school children. Parents must have an active account with the bank for direct debit transactions. Once activated, the watch allows school children to pay for their meals and buy stationery supplies wirelessly and track their fitness levels. Parents can easily track what their child ate during their break time and other expenses via an accompanying app (Smart Buddy). Unspent allowances are credited to the children’s savings account with the bank.