On one recent morning, I counted 960 items listed in a search for Jawbone UP on eBay. There were 242 for UP24s. And for Fitbit Flex, it was even worse: a whopping 1,356 items, many deeply discounted. (Yes, it should be noted that most of these were accessories, with only 584 full-fledged trackers.)
These numbers underscore a larger potentially dispiriting trend for makers of wearable technology: according to fresh findings from Endeavor Partners, one-third of Americans who bought a wearable product ditched it within six months. Moreover, while one in 10 American adults own a Fitbit or Jawbone or some other fitness and activity tracker, half of those products now do little more than collect dust.
So what’s going on here? Is wearable tech really a (no longer walking) dead market before its had much time to live?
James Park, cofounder and CEO of Fitbit, not surprisingly doesn’t think so. “In 2009, when we launched our first product, we were selling the product only on Fitbit.com,” Park says. “Currently our products are sold in 35,000 stores worldwide in 42 countries. We, as a company, have grown as well. Two years ago we were at about 80 employees. Now we’re a little over 270 and still hiring pretty rapidly.”
Ben Arnold, an industry analyst with the consumer goods tracking NPD Group, shares Park’s optimism. In January Arnold published a study on the activity tracker market. The opening line read: “Consumers are taking notice of the growing wearable technology market.” According to Arnold, that hasn’t changed. “In January we sized the activity tracker market–your Fitbits, Fuelbands, and UPs. In that report, we sized it at $300 million. I was asked for projections on the market three years ago and I said we could get to $200 million by 2015; 2013 already surpassed that. Given the number of brands coming in, I’m expecting and forecasting that the market for those products will double in 2014.”
Still, questions linger about how to increase mainstream adoption. Barriers including a rapidly segmenting market, the regular influx of new companies, behavior changes required to regularly download data and charge batteries that simply don’t last long enough, and a mismatch between technology interest/understanding could make sustained growth difficult to maintain.
Travis Bogard, VP of product management and strategy at Jawbone, looks at this as more of a marketing and brand-focus issue than an indictment of products. A solution, he says, is to emphasize consumer benefits over product features.
“We want technology to help make us more human rather than less,” Bogard says. “We’re now shifting into this world where the opportunity is for technology to essentially disappear. It’s also the danger, because a lot of the way we talk about this stuff as an industry is actually more technology-driven rather than human-driven.”
By way of an example, Bogard points to a hot tech trend.
“Even at a naming level, the Internet of things is wrong. It’s putting the emphasis on the things and what these things can do. The real focus and the organizing principle needs to be about the person and how all of these things can work to enable that person’s tasks and how it can make those easier. It all has to start with the person.”
If that’s true, how does Jawbone solve the problem?
“There are three guiding principles we’ve thought about for what wearables have to solve,” Bogard says. “First and foremost, it has to solve a real problem for users–for the person. It has to be hyper focused on what that means and distilling that down. Second is that we really have to think about how it fits into your life. Third, we ultimately think that the technology should disappear.”
Fitbit’s Park, meanwhile, sees the future of wearable going in a fashion-driven direction. “What you’ll see more and more in the coming years is the fusion of fashion and technology,” Park says. “The early generation of device probably were a little more electronic-y and geeky. You’ll see more of the fashion element come into play. That plays into our recent partnership with Tory Burch. We’re trying to partner up with major fashion houses to make sure that a lot of this wearable technology is going to be attractive to wear for a lot of different types of people.”
That’s certainly been on the mind of those behind Google Glass, as well as some of the biggest companies exploring the wearables market. Intel recently confirmed its acquisition of Basis for $100 million.
And it’s not just tech companies trying to crack this particular market’s code.
Disney, Barneys, and Pepsi are are among the big brands developing wearable products. Last summer, Disney introduced MagicBands, RFID-driven bracelets that enable identity verification and payments anywhere on park properties. Originally available only to buyers of a Disney resort package, at the end of March MagicBands were made available to day guests for $13 each. That suggests that the bands have been a hit. Disney should hope so–they spent an estimated $1 billion on the project.
Barneys, meanwhile, is partnering with Intel, Opening Ceremony, and the Council of Fashion Designers of America to create a smart bracelet to be released later this year. At a recent private symposium called “Connected Bodies,” Steve Holmes, an Intel exec working on new devices said of the partnership: “There are a number of other very impressive technologies available. But still they kind of lack some of the fundamental humanity that you really need to be successful, some of the things that help people wear a watch or a piece of jewelry. These things are very personal. There’s a permanence to them.”
Holmes believes his company can do what many companies have struggled to do so far.
“A lot of the things that we wear today, you could imagine sort of passing a piece of jewelry down to your child or your grandchild. And right now, I have a hard time imagining passing my fitness band down. I think that’s one of the problems we need to solve as designers and people that are creating things in this space. How do we actually make these things have longevity and personality?”
At SXSW, Pepsi partnered with Lightwave to host a wearables-enhanced event, giving out sensor-wristbands to track and increase people’s enjoyment at the party. The wristbands collected biometric data generated from dancing and movement. The DJ played off that data and crowd excitement to ramp up the beats. Javier Farfan, head of culture and music marketing for PepsiCo Beverages, North America, spoke with us about the experiment.
“What we noticed, probably a year out, is that wearable technologies were advancing in the way they actually help the consumer experience multiple levels in redefining what experiences are,” says Farfan. “We asked the question: can we actually use that biometric data to inform the actual physical experience and also the way the actual performer or DJ interacts with the audience to bring another layer of engagement?”
I attended Pepsi’s party. Digital leader boards high above partiers projected the Twitter handles of people in the crowd, periodically updating to show a list of who was dancing the hardest, according to biometrics. The goal was to inspire people to participate and reward them for having fun. Strategically placed monitors also showed sound and movement levels in the room. When levels exceeded a certain threshold, that effectively served to unlock free Pepsis and waters, which were then handed out to the crowd. And as part of the light show, real-time streams of numerical biometric data were projected across participants’ bodies.
But this party wasn’t just fun and games.
“We did learn a lot about about what it means to actually use biometric data to drive the sentiment of what was going on within a community,” says Farfan. He suggested that one possible future for wearables would see the products shifting away from individual pursuits and toward community activities, or what Farfan describes as “a communal experience with the device.”
“Big data, the amount of information that you can get, and how we can utilize it to create real-time engagement is where it’s at,” he continues. “I think biometric data could be one form of that. There will be other forms of how we use information to make the experiences stronger, better, and more appealing.”
That sounds great–but doesn’t fully explain away so many gadgets and accessories on eBay.
One idea that instills confidence in those working on the Jawbones, Fitbits, and Nike FuelBands of the world is that it’s still early days for the category–and consumers are still learning what wearables can deliver. That, however, can also imply trouble.
“I think one thing to think about is maybe some of these devices don’t work as consumers expect them to,” says NPD’s Arnold, “There may be some of that–a gap between what consumers expect and what technology now is ready to deliver.”
And so while eBay sales could reflect any number of things, from behavior drop off, to brand migration, to sizing or fit issues, to Arnold’s notion that the category is not yet meeting consumer expectations, the market’s ongoing innovative energy points to something else entirely. And that is this: reports of this sector’s death–to paraphrase a great embracer of wearables, the pocket-watch-carrying Mark Twain–are greatly exaggerated.