Wearable Technology Future is Ripe for Growth, Most Notably among Millennials, Says PwC

Twenty percent of American adults already own a wearable technology device and the adoption rate – on par with tablets in 2012 – is quickly expected to rise, according to PwC’s Consumer Intelligence Series – The Wearable Future report – an extensive U.S. research project that surveyed 1,000 consumers, wearable technology influencers and business executives, as well as monitored social media chatter, to explore the technology’s impact on society and business. In the last three decades, PwC has examined how technological innovation plays an increasingly prominent role in helping brands set themselves apart in their respective industries and how wearable technology can offer brands an opportunity to establish themselves, particularly in the entertainment, media and communications (EMC), health, retail and technology industries. In conjunction with The Wearable Future report, PwC’s Health Research Institute (HRI) launched a separate report, Health wearables: Early days, further examining consumers’ attitudes and behaviors toward health wearable technology.

While fitness bands, smart watches and other wearables are already established in the market, many of them have under-delivered on expectations. Consider that 33 percent of surveyed consumers who purchased a wearable technology device more than a year ago now say they no longer use the device at all or use it infrequently. Price, privacy, security, and the lack of “actionable” and inconsistent information from such devices are among consumers’ main apprehensions with the bourgeoning category. In fact, 82 percent of respondents were worried that wearable technology would invade their privacy and 86 percent expressed concern that wearables would make them more vulnerable to security breaches.

That said, 53 percent of millennials and 54 percent of early adopters say they are excited about the future of wearable tech. Among the top three potential benefits:

  1. Improved safety: Ninety percent of consumers expressed that the ability for parents to keep children safe via wearable technology is important.
  2. Healthier living: More than 80 percent of consumers listed eating healthier, exercising smarter and accessing more convenient medical care as important benefits of wearable technology.
  3. Simplicity and ease of use: Eighty-three of respondents cited simplification and improved ease of technology as a key benefit of wearable technology.

And for wearable technology to be most valuable to the consumer, it needs to embrace Internet of Things opportunities; transform big data into super data that not only culls, but also interprets information to deliver insights; and take a human-centered design approach, creating a simplified user experience and an easier means to achieve goals.

“Businesses must evolve their existing mobile-first strategy to now include the wearable revolution and deliver perceived value to the consumer in an experiential manner,” said Deborah Bothun, PwC’s U.S. advisory entertainment, media & communications leader. “Relevance is the baseline, but then there is a consumer list of requirements to enable interaction with the brand in a mobile and wearable environment.”

Industry Implications

Both the consumer market and the business to business (B2B) market stand to be radicalized by the mainstreaming of wearable technology. The following is a sector breakdown on the opportunities and challenges for enterprising companies:

Entertainment, Media and Communications

According to PwC, companies in the EMC industries have perhaps the largest opportunity for advancement and growth in the wearable technology market. Basically, where there’s a screen, there’s an opportunity – and if projections that sales of wearables could reach 130 million units in 2018 are correct, that opportunity is big.

“The media company of the future must combine insights with curated experiences, and find new ways of monetization – not merely through conventional advertising and paid content offerings. Wearables offer media companies a huge new frontier of relevance and immersive experiences, helping to engage audiences by providing the most relevant content,” added Bothun.

Health

As wearable devices gain traction over the next five to 10 years, they can help consumers better manage their health and their healthcare costs. But based on PwC research, wearables’ potential in the $2.8 trillion US healthcare system will only be realized if companies engage consumers, turn data into insights and focus on improving consumer health. Additional key findings from HRI’s Health wearables: Early days report include:

“For wearable technology to help shape the New Health Economy, next generation devices will need to be interoperable, integrated, engaging, social and outcomes-driven,” said Vaughn Kauffman, principal, PwC Health Industries. “Wearable data can be used by insurers and employers to better manage health, wellness and healthcare costs, by pharmaceutical and life sciences companies to run more robust clinical trials, and by healthcare providers to capture data to support outcomes-based reimbursement. But it will be critical to address the consumer concerns that we’ve identified, such as cost, privacy, and ease of use.”

Retail

Wearable technology will soon become an integral part of many retail experiences. It is poised to create an enhanced customer experience – better, more informed service; faster checkout; greater access to deals; and more real-time input into purchasing decisions. Rather than shopping across multiple channels – at home, on-the-go or in-store – the new consumer experience will be omni-channel, fuelled by wearable devices and comprehensive analytics. Though, the biggest concern for consumers is potential breaches of privacy and security surrounding personal data, shopping habits, increased use of payment tokens (rather than card/bank data) and recent investments to avoid brand tarnishing will attempt to address these concerns.

“Wearable technology will slowly shift retail conventions as retailers will be able to connect the dots between pre-store and in-store behavior, and reach a new level of interconnected retail,” said Scott Bauer, PwC’s U.S. retail & consumer practice partner and omni-channel leader. “How consumers pay for purchases and interact with the retailer while in store is expected to be radically redefined by wearable technology and retailers cannot afford to ignore the impact it could have on their bottom line.”

Technology

No doubt technology stands at the epicenter of the wearables movement. As part of PwC’s The Wearable Future report, consumers were asked to rate how excited they’d be to experience a wearable technology product from a particular brand and, not surprisingly, tech brands have the edge. Wearable technology is at a crossroads, and it’s looking down a path on which IT is a driving force, directly impacting the technology industry. Wearable tech products are increasingly being designed with business applications in mind, with the promise of improving workplace productivity and the overall efficiency of organizations.

“Inconsistency of data remains one of the top challenges for wearable technologies today. For wearables to be effective across both primary and secondary devices, there needs to be an established frequency of measurement. Enterprises must forge partnerships and develop IT and platform alliances to deliver seamless experiences on both the front end and back end of wearable implementations,” said Mike Pegler, Principal, PwC US technology practice.

What’s next?

With all signs pointing to wearable technology as the next big thing, businesses need to have a game plan in place to act on the competitive opportunity, while taking note of the challenges. Among the considerations to keep top of mind:

Envision How Wearables Can Create New Business Opportunities: The rise of wearable devices will create new means for marketing, including smarter, more robust customer data collection, and stronger insights into user interaction.

Keep Human-Centered Design at the Forefront of Your Strategy: To effectively embrace wearable technology, businesses must put the user at the center of the activity, reshaping an entire enterprise and its capabilities system around the customer or user experience.

Instill Trust: As trust is a key concern with consumers in the wearables space, enterprises will need to be consistently transparent with what they do with data and how they use it. Trust is the foundation which needs to be established early on.

Recognize that the Wearable Category Will Continue to Evolve: As with any digital strategy, adopting wearable technology requires taking the long view.

About PwC US

PwC US helps organizations and individuals create the value they’re looking for. It’s a member of the PwC network of firms, which has firms in 157 countries with more than 195,000 people.

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