Businesses brace for ripple effect as consumers abandon wearables
Consumers giving up on wearables - but what does that mean for business?
Consumers giving up on wearables - but what does that mean for business?

Businesses brace for ripple effect as consumers abandon wearables

Consumers are abandoning wearables in their droves, largely because they do not find them useful, get bored of them or they break, according a recent survey by Gartner.

The survey, which asked more than 9,500 consumers in Australia, the U.S. and the U.K. about their attitudes towards wearables, suggests that the abandonment rate of smartwatches is at 29 percent and 30 percent for fitness trackers.

Given that smartwatches are still in the ‘early adopter’ stage, and fitness trackers are in the early mainstream stage, Gartner research director, Angela McIntyre, suggested these numbers should cause concern.

“Dropout from device usage is a serious problem for the industry,” she said. “The abandonment rate is quite high relative to the usage rate. To offer a compelling enough value proposition, the uses for wearable devices need to be distinct from what smartphones typically provide. Wearables makers need to engage users with incentives and gamification.”

Implications for business

So how does this impact business? Firstly, it’s obviously putting some smartwatch specialists out of work. Pebble CEO Eric Migicovsky announced that the company would be shutting down in a statement on Wednesday, though its assets will be taken on by Fitbit – renowned for its fitness trackers.fitbit

However, if people are no longer using smartwatches that has a direct impact on other industry verticals, such as insurance and healthcare.

Fitness trackers do what they say on the tin. They track your fitness levels and accrue important data relating your health. Smartwatches go beyond simple fitness tracking, but many consumers still use their smartwatch as a form of healthcare tracker. It’s this data has been pitched as one of the most valuable assets to businesses for some time now, but perhaps most notably in the healthcare and insurance industries.

Data about a person’s health could be used to great effect by medical professionals to spot illness before it takes place, or to improve a diagnosis. By the same token, it could also be used by insurers to inform a patient’s premiums – an idea that doesn’t sit comfortably with everyone. Apple, for example, has already announced a partnership with U.S. health insurance giant, Aetna, in a move that could see insurance premiums determined by health data, and some wearables are already assisting doctors with diagnoses, such as Parkinson’s disease.

If wearables don’t become more useful to the consumer, this data opportunity will face challenges and businesses will need to seek another way to get their hands on such personal information. Smartphones are the obvious answer right now; Gartner found that people aged 45 and under think a smartphone can do everything they need, so this may provide a useful stop-gap.

What future for wearables?

watch-hero-unique_pr-printBut businesses aren’t giving up on smartwatches. Apple CEO Tim Cook recently said the Apple Watch’s sell-through was at a record high, though he’s yet to actually release the numbers prove that. Nevertheless, if businesses are so convinced about the opportunity provided by these wearables, what needs to change?

“The greatest hurdle for fitness tracker and smartwatch providers to overcome is the consumer perception that the devices do not offer a compelling enough value proposition,” McIntyre affirmed.

“The key to creating a value proposition to interest mainstream consumers is lifestyle messages around health tracking and the convenience of receiving alerts on the wrist, instead of via the phone. The benefit will increase as these devices gain the capability to function more independently from the phone.”

Related: How insurer AIG is using wearables to reduce risk, protect workers