Wearables maketh the person (smart)

Out with the old, in with the new — we see it all the time in the relentlessly converging worlds of IT and consumer electronics, and we saw it again this January at the Consumer Electronics Show (CES) in Las Vegas, and more recently at the GSMA Mobile World Congress in Barcelona.

The lie of the land is this: while enthusiasm for mobile smart devices (tablets, smart phones and in-betweens) is waning, consumers are excited about wearable devices connecting every aspect of their lives — if wary about certain as yet unresolved issues (more about those further down). When these are successfully addressed, we’ll see another tidal wave of industry transition. Brace yourself for a takeover by wearable fitness and health monitors, smart watches and a bunch of other gadgets and tools with sensors and computing power. Research backs up this story — IDC expects the wearables market to grow at a rate of 78% until 2018, compared to a rather paltry 5.4% growth in the tablet market.

How quickly things change!

But who is buying wearables? Are they geeky fashion statements or pioneering business tools, as has been claimed? What has changed since the Timex DataLinkof the 1990s to warrant the excitement about Apple’s smart watch? And haven’t fitness trackers, pedometers and heart-rate monitors been around for years?

The difference is that modern wearable technology packs more computing power than NASA needed to land two astronauts on the moon, plus they’re connected to the Internet, meaning they can drive built-in sensors to gather, process, transmit and receive contextually relevant information at the very point of decision-making. Hands-free. Not even smartphones have the ability to empower users in the spread of scenarios that wearables do.

Wearables offer many innovative use cases for companies — from enabling different interaction with tools and devices to enhancing safety offerings and training experiences, thereby reducing re-working and creating opportunities for brand-new goods and services. That is an operational and economic shift in the making.

Many uses focus on enabling employees. In the oil & gas and telecoms industries, pilot studies have been completed to equip field installation, service and maintenance professionals with smart glasses to access documentation, procedural tips and skilled advice. Wearables can also be used to improve health and safety, helping to notify employees about emergencies or hazardous working conditions.

By deploying or engaging existing sensors at the enterprise’s point of interaction with customers, retailers can capture data and learn, via feedback loops, how their products and services are used.

Such data, when ingested and analysed through machine learning platforms can provide a powerful platform to help stores get a better understanding of customers — thus finally realising the promise of actionable insight from data — aka outcomes.

So the insights being garnered from these wearables are giving rise to new business models. Smart watches and smart glasses open up a myriad of opportunities in the financial services industry. The big technology providers are rushing to provide add-on payment services to their devices, such as the Apple Pay, and the first banks have started bringing their solutions to market, for example Caixa Bank’s payments via contactless wristband.

So yes, it’s probably safe to say it “has legs”. Forrester believes the addressable market for wearable computing solutions in enterprises might actually eclipse that of the consumer market.

Of course there are obstacles. Cost remains a factor and it is probably going to be some time before we see mass adoption. On top of that, wearables manufacturers will have to work hard to overcome early market challenges with user experience, brand awareness and fears over privacy. Then there’s the ease of use problem — the majority of smart device owners have experienced issues with using them. Lastly, consumers are cautious about sharing their personal information via wearable platforms, due to a lack of trust in online security.

It is obvious that wearables are of momentous significance. To come into their own, manufacturers must start offering phenomenal customer experiences right out of the box, stand out in a crowded marketplace with strong digital brands, and provide a level of security and privacy that will inspire consumer trust.