It’s hard to believe that the sensor-enabled bracelet evolved from futuristic novelty to walking reality in just a few short years, with almost 21 million wearable devices sold in 2014.i While the Fitbit was not the first consolidated activity tracker to go to market, its successful launch in 2007 helped to spur innovation in digital health that had not been seen in mass production in almost a decade. Since then, over 300 wearable products have launched to capitalize on the rapidly expanding wearable technology market that is projected to reach $12 billion by 2018,ii with health-and-fitness-oriented devices leading consumer interest.iii But with unprecedented ability to identify, diagnose and resolve key issues in healthcare in a fraction of the time of technology-deficient efforts, why have so many wearable devices failed to gain traction? What does it really take for a new entrant to succeed in the wearable technology market?
From idea conception to increasing customer value, ZS has identified three steps for going to (and staying in) market with wearable technology products. In this first installment of our series, we will introduce you to these ideas and invite you to collaborate with your thoughts and experiences as we explore each of these areas in further detail in the upcoming weeks.
- Define the Customer Need.
It could be said that no one needed the iPhone: Consumers had numerous ways to access their emails, take phone calls and schedule meetings prior to integrating these functions into a single device. However, most people carry an innate desire to be more productive in less time. The iPhone created a new market by seamlessly answering this (pun intended) call for increased productivity.
New entrants to the wearable device market should evaluate the needs of their customers past the daily task lists of ordering groceries or refilling prescriptions to identify an outcome-based need, whether it is enhanced health, better time management or another result-based improvement. Instead of beginning a value proposition statement with “our technology can,” companies should focus their value statements on the customer, leading each feature description with “you can…”
- Make it Interoperable.
How frustrating is it to purchase a new product, only to spend valuable hours creating an account, downloading software and end up on a call to customer service to activate additional features? As the market becomes increasingly commoditized, customers have little tolerance for enduring extensive setup processes to access services. A key component to increasing customer adoption is absorbing mundane and resource-intensive tasks before they reach the customer.
This seamless installation extends to service capabilities. Many companies carry an extremely useful patent for a particular product, but lack the in-house capabilities to develop the solution end-to-end for commercialization. The open-platform systems that Google and Apple provide have created standards for new products to converge on a single device through their open application platforms. This interoperability between content and product makes it easy for individuals to immediately access the benefits of applications that enhance the capabilities of their physical product. Digital health companies might consider integrating setup and service areas, such as account setup, partner product integration, payment support services, distribution or data management.
- Don’t Stop Innovating.
Recent research indicates that over third of U.S. consumers who have owned a wearable device stopped using the device within six months of receiving oneiv. Instead of simply enhancing product features with increased speed or analysis metrics, product developers should carefully observe their customers’ daily habits and interactions with their existing product to find the next “need.” What times of day do users check their devices? What else are they doing that could be measured or included? For example, if a customer often views the metrics on his or her fitness dashboard to evaluate steps taken around lunch time, the customer might also be interested in inputting lunch calories or viewing availability in the 12 o’clock spinning class around the corner from his or her office.
Companies must innovate in a way that provides a reason for the primary customer to continue engaging with a product over time because he or she has additional reasons to access the product. This level of innovation can lead to success as new developers create a sustaining impact on customers’ lives through driving productivity and generating interest.
The customer is the key thread that ties these steps together from conception to launch. As you prepare to launch your wearable product, you should be prepared to answer the following questions:
- Customer Need: What benefit do the customers derive? What can they do now that they couldn’t do before? What else can they do? How does this improve their livelihoods?
- Interoperable: How can we make this easy to use? Can we relieve our customers from filling out forms or entering tedious information? What are they likely to call customer service for and how can we make it so they don’t have to?
- Innovation: How are customers using this product? What else are they doing at the same time or later? What’s an extension of their needs?
Are there any other key steps you believe are necessary for success in this market? Please share your experience in the comments, or call us with your ideas.
In future posts we will outline what capabilities you need to build to achieve success.
i IDC, Worldwide Wearables Market Forecast to Reach 45.7 Million Units Shipped in 2015 and 126.1 Million Units in 2019, http://www.idc.com/getdoc.jsp?containerId=prUS25519615
ii BI Intelligence, The Wearable Computing Market Report, http://www.businessinsider.com/the-wearable-computing-market-report-2014-10
iii Juniper Research, Smart Health and Fitness Wearables, http://www.juniperresearch.com/researchstore/devices-wearables/smart-health-fitness-wearables/device-strategies-trends-forecasts
iv Endeavour Partners, Inside Wearables: How the Science of Human Behavior Change Offers the Secret to Long-Term Engagement, http://endeavourpartners.net/white-papers
About the Author
Anddria Clack is a consultant in ZS’s San Mateo, Calif., office. A member of the High Tech practice, Anddria’s areas of expertise include marketing and strategy. For more about Anddria, please view her LinkedIn profile.