Wearable Technology is Ripe for Growth: PwC

Wearable technology will soon become an integral part of many retail experiences, as it's 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 – according to PricewaterhouseCoopers' (PwC) The Wearable Future report, which evaluates user expectations, innovative breakthroughs and industry adoption of the wearable technology, particularly in the retail industries.

As part of PwC’s Consumer Intelligence Series, key takeaways from The Wearable Future report found that 20 percent of American adults already own a wearable device and the adoption rate – on par with tablets in 2012 – is quickly expected to rise. The extensive U.S. research project, which surveyed 1,000 consumers, wearable technology influencers and business executives, along with social media chatter monitoring, found that while fitness bands, smart watches and other wearables are already established, many have under-delivered on expectations.

To wit: 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:

• Improved safety: 90 percent of consumers expressed that the ability for parents to keep children safe via wearable technology is important.
• 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.
• Simplicity & ease of use: 83 percent of respondents cited simplification and improved ease of technology as a key benefit of wearable technology.

Further, for wearables to be most valuable to consumers, 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, so finds the PwC research.

“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.”

Wearable Tech's Implications on Retail Sector

The following summary highlights key opportunities and challenges in the retail sector:

• 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.
• After dietary, exercise and medical information, an enhanced retail experience was at the top of the list of information millennials would like wearable tech to provide them. Fifty-one percent of millennials said this would be information they’d like to know, as did 45 percent of the general population.
• Seventy-two percent of people surveyed said it was very important for wearable technology to improve customer service. This was especially true among time-pressed parents, 76 percent of whom wanted wearable tech to make shopping a more pleasant, efficient experience. 
• Consumers, especially millennials, desire wearable technology in the retail space to reward them for being faithful customers. One in two millennials said they would be strongly motivated to wearables if it “has apps/features that reward those who frequently use it.”
• In-store merchandising and promotional spending by brands is a key source of funding for retailers. With wearable tech, the tremendous potential for synergies will increasingly expand not only into advertising but also into content marketing, with brands providing content to retailers that will improve the shopping experience.  

"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."

Businesses Need Durable Game Plan

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.

Additional information about the opportunities and challenges of wearable technology for other sectors, including entertainment, media and communications (which the PwC study found to have perhaps the largest opportunity for advancement and growth), health and technology, can be found here.