Wearable tech primed for growth
It’s the early days of the wearables sector and already 1-in-5 consumers own a wearable device, and 1-in-10 use that device every day. And judging by the market dynamics that are helping to shape the sector — a society that’s focused more and more on prevention and a generation of millennial consumers who embrace technology in their day-to-day lives — the wearables market is primed for some pretty substantial growth.
This potential is fueling venture capital investment in digital health and wearable tech. By mid-2014, digital health start-ups had raised $2.3 billion, more than they raised in all of 2013, PricewaterhouseCooper’s Health Research Institute reported. More than $200 million went to digital medical devices, such as wearables. By the end of 2014, wearable companies will have shipped a projected 7.6 million units within the United States, an almost 200% increase over the year before.
Wearable tech owners tend to be younger males (e.g., 18 to 34 years old). The next wave of fitness band buyers are more likely to be older females (e.g., 35 to 54 years old). Survey respondents weighing the purchase of a fitness band said that their biggest hesitations were price, privacy and concern that they won’t actually use it.
In fact, 33% of consumers surveyed by PwC’s HRI 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. And 82% of respondents were worried that wearable technology would invade their privacy. As many as 86% expressed concern that wearables would make them more vulnerable to security breaches.
That said, 53% of millennials and 54% of early adopters say they are excited about the future of wearable tech. More than 80% of consumers listed eating healthier, exercising smarter and accessing more convenient medical care as important benefits of wearable technology. Nearly 1-in-2 consumers said they were “very” or “somewhat” likely to buy a fitness band in the next year. More than one-third of consumers were looking to purchase a smart watch (35%). Consumers were less interested in buying smart (sensor-equipped) clothing (20%), smart glasses (19%) or people-tracking devices (13%).
Walgreens is certainly on board with embracing the wearables consumer. The Deerfield, Ill., retailer in early December launched its own wearable smart watch under its “Well at Walgreens” banner. The device can accept incoming calls and text messages, track steps, monitor sleep patterns and is automatically connected to Walgreens’ loyalty program Balance Rewards. Consumers earn 20 points for each mile walked using the device.
More than 80% of consumers said an important benefit of wearable technology is its potential to make health care more convenient. But consumers don’t want to pay much for their wearable devices. Instead, they would rather be paid — or earn loyalty card points — to use them. HRI’s report found that 68% of consumers would wear employer-provided wearables streaming anonymous data to an information pool in exchange for a break on their insurance premiums. Moreover, consumers are more willing to try wearable technology provided by their primary care doctor’s office.
Asked who they trust to hold their wearable data, consumers ranked their primary care doctor the highest (54%). In the survey, hospitals, pharmacies and dentists also ranked high.
While employers and health company executives expect wearables to provide valuable insights, few consumers are interested in using wearables to share health data with friends and family. Consumers trust their personal healthcare practitioners most with their health data. Healthcare practitioners already have the trust of consumers, and healthcare organizations have expertise in protecting personal health information. Consumers will want to see those high standards applied to wearable health data, especially as they become integrated into electronic medical records.
“For wearables to help shape the new health economy, next generation devices will need to be interoperable, integrated, engaging, social and outcomes-driven,” said Vaughn Kauffman, principal, PwC Health Industries. “Wearable data can be used by insurers and employers to better manage health, wellness and healthcare costs, by pharmaceutical and life sciences companies to run more robust clinical trials, and by healthcare providers to capture data to support outcomes-based reimbursement. But it will be critical to address the consumer concerns that we’ve identified, such as cost, privacy and ease of use.”