Activity trackers put wearable computing in arm’s reach of outdoor specialty
By Martin Vilaboy
There’s little doubt that wearable technology, at least in its most general definition, represents a massive opportunity of almost unlimited potential for an entire ecosystem of market contestants. The various sensors, displays and mini-computers worn on or placed in the body eventually will be part of the day-to-day lives of nearly every person in developed countries.
Yeah, we are that confident it is that big.
At the same time, the entire space is currently in the throes of the type of over-hype and unreal expectations that are common to new but potentially disruptive technologies. On Gartner’s oft-cited technology Hype Cycle, “wearable unit interface” currently stands near the “peak of inflated expectations,” still yet to face its “trough of disillusionment,” before striding into the “slope of enlightenment” and eventually onto its “plateau of productivity.” The much-related “Internet of things” likewise is about to hit its peak of hype, as well.
Perhaps it’s no surprise market projections for wearable devices range anywhere between about $5 billion a year to as much as $50 billion by 2018. Projections can be tricky with nascent to emerging technologies and markets. After all, it’s possible the breakthrough devices or services that take wearable tech over the mass-adoption hump – the proverbial “killer apps,” so to speak – don’t even exist yet.
Even so, most outdoor retailers can’t wait to see what the future brings. As it turns out, one of the first applications of wearable computers lands right in the wheelhouse of many brands serving active and fitness-minded consumers. Sure, wearable tech applications such as MindRDR’s head-mounted hardware, which uses brainwaves to let Google Glass wearers take a picture just by thinking about it, or diapers that alert parents when they need changing, represent limited opportunity for outdoor dealers. But the segment of wearables known as “activity trackers,” – so far mostly wrist-worn devices that monitor and communicate things such as motion, sleep, location, heart rate and other body functions – have hit the market full stride, with a full assortment of offerings already targeted to outdoor and sporting goods channels.
Part of a move toward “fitness optimization” and the “quantified self,” U.S. sales of connected digital activity trackers doubled between 2012 and 2013, growing to 4.9 million units from 2.4 million the prior year, according to figures from Parks Associates. Meanwhile, total venture funding for biosensing wearables jumped from $20 million in 2011 to $229 million in 2013, say consultants at Rock Health, with dozens of companies now providing the technology that goes into bio and activity trackers. ABI Research, for its part, expects 10 million activity trackers to be shipped in 2014, along with 7 million smartwatches, and it’s been estimated that activity trackers already represent a $1 billion to $2 billion market.
So for brands making inventory decisions for Summer 2015 and ’16, the issue is less about how big the wearable opportunity will become and more about the current rates of adoption, consumer attitudes toward and understanding of today’s devices and services, and what it will take to push wearables over the mainstream mountain. The hype says wearbles are “ready for the mainstream” right now. Reality suggests there is still a good bit of evangelical work required, as well as some fine-tuning to the first-generation of product. Currently, it’s estimated that about 1 to 2 percent of U.S. consumers own an activity tracker, such as a watch or wristband type wearable tech device. Within these sales, NPD Group’s point-of-sale data show the top three activity trackers (Nike+ Fuelband, FitBit Force and Jawbone Up 24) accounting for 97 percent of units sold.
In terms of near-future sales potential, surveys from Harris Interactive suggest one out of 10 American adults appear to be strong candidates for early adoption. That’s how many respondents to a Harris Poll of more than 2,500 U.S. adults said they were “very interested” in owning a “watch or wristband type wearable tech.” That same percentage also strongly agreed that “wearable tech could be useful in my life,” while a similar 11 percent strongly agreed that wearable tech “can be stylish.” Likewise, about one in 10 also strongly disagree that wearable trackers “are just a fad.” Even if a good majority of this 10 percent purchase a tracker, it likely will require converting good chunks of the additional 17 percent and 18 percent of U.S. adults who are “somewhat interested” or “a little interested,” respectively, before the traditional “tipping point” to widespread adoption is reached.
Indeed, the Harris findings suggest U.S. consumers are split pretty evenly when it comes to their perceptions of wearable devices. Just less than half of consumers appear to “get it,” and are able to envision how an activity tracker could bring value to their lives. Overall, 46 percent of U.S. adults are at least a little interested in owning a watch or wristband type wearable tech device, while just more than half of Americans believe wearable tech in some form could benefit them in at least one way.
On the flipside, 53 percent of respondent say they are “not at all interested” in a wrist-worn wearable, while 63 percent have no interest in wearable tech in the form of a headset or smart glasses. Nearly half of respondents (46 percent) can’t yet envision any benefit that wearable tech brings to their lives, show the Harris findings, while 49 percent believe wearable computing is “just a fad.” In other words, about half of consumers could be described as uninformed at best, skeptical at worst.
Of course, consumers generally have difficulty fully grasping the value of technologies that are not yet completely familiar to them, and it appears wearable tech is still a bit of a mystery to the large majority of U.S. adults. A full 70 percent of those surveyed by Harris, for example, indicates that they are either not at all familiar with such devices (37 percent) or they’ve heard the term but don’t know anything more about it (33 percent).
“This lack of familiarity is playing a role in the fact that roughly six in 10 Americans don’t understand the need for wearable tech,” say Harris researchers.
The uncertainty is leading to some trepidation when Americans are asked at what point, if ever, they would consider purchasing wearable tech. While 17 percent say they will consider doing so when it drops to a reasonable price and roughly one in 10 will consider it when they believe the “bugs” have been worked out, more than a third (36 percent) – the largest segment by far – simply say they are not sure, and an additional 19 percent say they will never consider buying a wearable tech device. “In the end, Americans aren’t yet displaying truly decisive opinions either for or against wearable tech, which may reflect a simple lack of clear understanding of the category as a whole,” say Harris researchers. “The variety of devices coming to market thus far, and the inconsistency of roles they’re designed to fill in consumers’ lives, can make it hard for the public to wrap its head around just what these devices are all about.”
In other words, the “category’s essentially limitless possibilities are actually working against it, making it harder for consumers to wrap their collective heads around the segment,” said Aaron Kane, senior research director at Harris Interactive.
As with most new consumer technologies, interest is strongest among younger cohorts. Echo boomers are more likely than Gen Xers, Baby Boomers or Matures to show interest in wrist-worn wearables, see the usefulness of wearable tech in general and find it fashionable to wear, show Harris findings. The tough news here is that Echo Boomers, who are most informed about the technology, also appear to be the most discerning. Echo Boomers are significantly more likely to express concerns over wearable tech and to say that wearable must meet their needs better than current technology or replace something they already use.
As also might be expected, there is a bimodal distribution of interest among varying age groups of early adopters, say researchers at strategy consulting firm Endeavor Partners. Those who fall in the 24 to 34 age range are primarily focused on fitness optimization. An older cohort of adopters between ages 55 and 64, “are focused on improving overall health and extending their lives,” Endeavor’s research shows.
Likewise somewhat common with new gadgets and tech gizmos, men are more likely than women to show at least a little interest in smart watches and wristbands (52 percent among men vs. 40 percent among women), show Harris figures, and adults with children are substantially more interested in activity trackers than those without (59 percent among those with children under 18 vs. 41 percent among those without). The latter might be attributable to the availability of geo-locating tracking devices designed to keep kids from getting lost.
Success for many vendors and retailers, of course, goes beyond initial interest and adoption. In the midst of the frenzy of anticipation, researchers at Endeavor exposed what they call “the dirty secret of wearables,” which could have substantial impact on the eventual mass market penetration of the first generation of wrist-worn trackers. Through its survey of thousands of Internet-connected respondents, Endeavor found that activity trackers so far fail to drive long-term engagement for a plurality of users.
More than half of U.S. consumers who have owned a modern activity tracker no longer use it, while a third of U.S. consumers who have owned one stopped using the device within six months of receiving it.
“Success is defined by the degree to which these devices and services make a long-term impact on their users’ health and happiness,” warns the consulting firm.
In addition to the traditional criteria a product must meet in order to drive adoption and utilization (quality, fit, aesthetics, utility, out-of-box ease, etc.), Dan Ledger, an Endeavor Partners principal, suggests product developers and buyers of wearable tech consider three factors of behavioral science that will drive long-term engagement: habit formation, social motivation and goal reinforcement. Psychologists define habits as automatic behaviors or routines that are triggered by situational cues, which are then followed by some form of reward. For example, when we feel lonely (internal trigger) or receive a push notification (external trigger) while riding the subway (situational cue), we check our Twitter feed (behavior), and may experience pleasure (reward), explain Ledger and study co-author and behavioral scientist Daniel McCaffrey.
Wearable devices that move beyond presenting data (steps, calories, stairs) and directly address the elements of the habit loop (cue, behavior, reward), while triggering the sequences that lead to the establishment of new, positive habits, will make the process of habit formation more effective and efficient, argue Ledger and McCaffrey.
The two point to the Basis smart watch as an example of an effective habit change sequence solution. The watch uses four types of sensors to calculate various health metrics, including steps taken, calories burned, sleep quality and resting heart rate. As Basis users navigate the initial goal setting process, the device sets up a sequence of key habit formation elements – cues, routines and rewards. “Basis’ concentration on wellness as a whole, instead of specifically on exercise, helps produce long-term sustained engagement,” says the study.
Basis only lets users set one goal for the following week, since research shows that building life habits is easier when people add changes in small increments over time, say Ledger and McCaffrey. “The Basis goal-setting sequence requires users to unlock the ability to add new habits by acquiring points (reward) after completing a previous goal related to successfully establishing a habit. From here, daily cues, routines and rewards are continuously sequenced to develop habits for better health.”
Along with rewards, social connections can be a powerful source of motivation as well. When users are able to share their goals or compete for goals with an audience or group, they are more committed to achieving those goals, show behavioral studies. An early example of effectively leveraging social in an activity tracker is Polar Loop’s Flow Web service, which allows users to connect, share and encourage other Polar Loop users around the world. Users are able to view and share running or cycling routes, see training routes of “friends” and get data on routes from locals when traveling.
“Wearables may be the next frontier of online social networking as they have the potential to integrate the mechanisms of sociability into our health, work and daily lives,” say the Endeavor researchers.
Lastly, achieved sustained engagement requires users to experience a sense of progress toward defined goals, says Ledger, and in most cases achieving several smaller goals (baby steps) provides the needed momentum necessary to reaching larger goals. Essentially, by setting smaller goals, people are less likely to over-reach and fall short.
“One unique characteristic of wearable devices is their persistent presence,” explains the Endeavor study. “These wearable devices now are able to track steps, calories, heart rate and body temperature, among other metrics, and do so both passively and constantly. By being constantly connected to our devices, we remain connected to our goals and can experience our progress via on-demand feedback.”
The Nike+ Fuelband, for instance, notifies users about “hours won or lost” based on activity level for that hour. If users “win the hour,” they are given positive feedback. Other devices, such as the Jawbone Up24 and the Fitbit Force, send users hourly text message push notifications to support progress. Ultimately, wearable tech is part of the massive “Internet of things,” the ubiquitous network of gazillions of smart devices talking to each other and supposedly bettering our lives. As part of this expanding network, wearables would seem subject to the “Network Effect,” whereby the value of a network grows in proportion to the number of end points attached to it. In other words, devices that can communicate with an expanding ecosystem of data, platforms, services and software logically have an advantage.
If the recent history of consumer technology is any indication, devices that do not force new behavior but allow users to adjust and adapt to new capabilities stand a better chance of success, says Shehryar Khan, principal, Deloitte Consulting. Similarly, product developers should be careful about requiring too much ongoing response from the user, keeping interaction to a minimum.
“Simplicity is the ultimate form of sophistication, and transparency is the ultimate form of simplicity,” Khan warns. “If a use case requires an explicit user response, it should be limited to spoken commands, gestures or a gloved knuckle tap. Minuscule displays require discipline in not only what information should be displayed but how to present it.
What’s more, “Don’t design a wearable experience for a function that’s more effectively done on a smartphone, a tablet, or a piece of paper,” says Khan.
Indeed, there is a fair amount of pressure on product developers, as it could very well take a breakthrough device or two to really push wearable tech into mainstream acceptance. But with the recent and ongoing advancements in material science driving things such as technology miniaturization and battery improvements, it’s not hard to imagine a device or two coming along that captures widespread attention.
Where wearable computing goes from there is hard to say, but it certainly extends far beyond activity trackers and biosensors, even just within outdoor and sporting goods. We’re already seeing early applications within apparel, protective sports gear and athletic training tools.
Tracking the Next Step
Activity trackers and biosensors may be the first application of wearable computing that interests outdoor companies, but it is far from the last. Sure, outdoor marketers will no doubt attach the term “wearable tech” to existing technologies such as moisture management or anti-odor, but the trends toward performance and fitness optimization, the quantified self and electronic health monitoring are producing some interesting products that provide insight into the ways wearable computing may appear on the racks and shelves of outdoor, sports and fitness retailers in the near future.
An obvious, and arguably the largest, area of opportunity lies within e-textiles. Among many recent developments, German company Match2Blue integrated activity tracking into a performance top. The Ambiotex t-shirt, expected to be available in October, measures vital parameters such as pulse rate, breathing, heart-rate variability, calorie consumption and physical activity. Readings collected by the shirt can be displayed in real time on a smartphone or tablet.
Elsewhere, textiles are being developed with microcontrollers that incorporate touch buttons designed to operate portable devices, such as music players, as well as solar panels that can be used to charge portable devices. Researchers at Cornell University have even developed a technology that converts cotton fiber into conductive material.
Reebok, meanwhile, recently unveiled a skullcap to be worn under a helmet that monitors blows to the head and warns of a possible concussion. A small tab projects over the back of a player’s neck. A yellow blinking light means the player took a moderate whack to the head. A red blinking light is the sign of a more severe hit. Reebok’s Checklight skullcap also keeps track of the number of hits a player has taken. Then there’s Zepp Labs, which has developed small devices that attach to golf clubs and baseball or softballs bats in order to provide swing analytics so players can learn precisely what swing mechanics consistently produce the best results. Dubbed “Results Tagging,” users tag each swing with information such as hit type, direction and even speed. Once tagged, the Zepp system analyzes each swing and produces a detailed report with valuable swing performance insights. Since no two players are the same, Zepp also helps users set personalized swing goals.
These are just a few examples. Further down the road we could see wearable computing in a knee brace that constricts only when a joint is stressed, or a monitor that analyzes for the perfect ski turn or paddling stroke, or maybe a sleeping bag that automatically adjusts to keep a sleeper at their perfect sleeping temperature throughout the night. When considering that right now companies are developing technologies that play video games or take photos using only a person’s thoughts, wearable computing seems limited only by the human imagination.