Some things in life become bigger than what they started off to be. These things start off as an idea, a concept which evolves into a product. The product develops into a marketing strategy and business focused execution. And some of these products completely transform our lives. Wearables are going to this. They transcend their purpose and effect and will continue to do so on many aspects of our lives.
Smartphone vs. Smart wearables:
Before we dive into the smart wearable market, let’s back up a bit to smartphones. Comparing these two markets helps us measure just what kind of impact the wearable technology will ultimately have and what can be the expected growth rate of the wearable market.
Smartphones have undoubtedly changed our lives. It’s not just the way we communicate, gather and observe information, it has also transformed the way we think, perceive reality and make decisions. This wasn’t always the case. At first smartphones were largely regarded as a nuisance and too disruptive and many people just didn’t get the point of having a smartphone.
Looking at the adoption of wearables in 2015, it has grown to around the same percentage as mobile tablet use was in 2012, roughly 21 percent. If the growth trend for wearable adoption continues on its upward climb, wearable technology devices will eclipse (!) smartphones by 2020. More consumers will own some type of wearable device five years from now than they own smartphone. Some say that this is even a conservative approach as various forecasts made for the wearables market by large research firms indicate that the adoption rate of smartwatches and wristbands might be three to five times faster than of smartphones (that are with us only for less than nine years).
Where is it all going?
The essence of the wearables – being the first and direct layer on our skin – will set the tone for growth, change and impact of this market. As it evolves and changes, we will see more and more industries such as retail, security and advertising transitioning into the smart-connected world.
At the moment the leading devices in the wearable market are smartwatches and wristbands which are used mainly for fitness and health related applications, simply because the devices can easily measure heartbeat and basic movement (steps) The huge healthcare industry is the first to benefit from the fact that smart wearables are literally on our bodies and can track vital signs on an on-going basis. We’ve already seen more and more apps that bridge the gap between the wearables and the health market.
Digital Health as a catalyst for change of public health
Digital health domain was born with the wearables. Just five years ago companies related to healthcare industry were either pharmaceutical companies or developed healthcare IT equipment. The introduction of wearables and their fast pace in the inclusion of more sophisticated sensors ignited thousands of companies to develop digital health apps. In the past two years (2014 and 2015) billions of dollars have been invested in digital health companies.
So what’s all the fuss about? It all started when Vinod Khosla, one of the most famous and successful high tech investors globally said, in a September 2013 interview: “In the next decade data science and software will do more for medicine than all of the biological sciences together” and then added: “thanks to the ubiquity of mobile tech and cheap hardware, humankind is set to make a quantum leap in health care that will allow the individual to be in charge of his or her own well-being through sensors and data science”. Industry analysts, which most of them had just learned about this domain for the first time, explained then that this is no surprise as healthcare is a giant part of the US GDP (17.9% at 2014) thus it only make sense that digital health will be the next revolution. Since then thousands of digital health apps were developed.
We will review the trends there in our next blog post.
One inspiring example is Somatix – a proprietary software platform which recognizes hand-to-mouth gestures in real-time using standard commercial-off-the-shelf smart-watches and wristbands. Companies in the digital health space can use this platform for different and diverse use-cases such as smoking cession programs, medical adherence monitoring or creating remote medical treatment plans which don’t require patients to actually be admitted.
The wearable market is also relevant for insurance industry which can now personalize health insurance plans by offering dynamic pricing based on consumption of bad substances as cigarettes. Down the road, another large industry to be effected from the wearable market is advertising. Consumer’s wide-scale adoption of wearables has the potential to disrupt advertising, and evolve from static to personalize messaging aimed at drawing customer directly and physically to retail stores and creating advanced location and activity based advertisements. Personalized and bespoke marketing could be enhanced through visual messaging or targeted offers and coupons based on the data obtained from wearable devices. The simplest application of real-time marketing will likely be to notify customers of ongoing relevant promotions on their smartwatch as they walk near or into a store.
The wearable market can also revolutionize the working space by streamlining the way employees communicate with each other. For instance, a large retailer can utilize a wearable computer that enables in-store and cross-store communication. This not only provides a simple, hands-free communication medium, but also enables data collection about efficiency, security, employee interaction patterns and other useful insights. Dynamic messaging could utilize relevant real-time data such as customer location within the store, products in line-of-sight, visually displayed barcodes and the like, and then display customized messages and offers to customers.
These are just a few examples of how the smart wearable market will transform and change other markets. In reality will see other exciting and innovative applications driven from the customers, the developers and businesses.