The Customer Journey

Wristly Insider’s Report #41

February 23, 2016

Thank you to the 1,200 Wristly wristware panelists who completed this week’s research. The focus for the week was to begin to understand the various paths one could take along the wrist road. Do people who previously wore watches regularly behave differently than others? Why did people buy Apple Watch? Is their answer different compared to those who wore a Fitbit or other activity band prior? Let’s begin by looking at the state of the wrist five years ago.

Key insights

  • Among our panelists, 60% wore a watch regularly (53% on their left and 7% on their right) leaving 40% without any type of watch then.
  • Among the 60% who wore a watch, we can segment them evenly by the price range they paid for it with half having worn a less than $250 watch and the balance distributed 14%, 8%, and 5% respectively across $250-$1,000; $1,000-$5,000 and $5,000+ tiers respectively.
  • Just under 2% reported having worn a Smartwatch. When reading through the comments, the vast majority of those were referring to their Casio calculator watches — true early pioneers of the category indeed!

Apple Watch is unveiled

The unveiling of Apple Watch in September 2014 marked the second step in our research as broad media coverage begun to raise general consumer awareness for the product category and we wanted to measure the state of the market then.

Key insights

  • We first can measure a reduction from 60% to 49% in the number of panelists still wearing a regular watch in that two year span.
  • Meanwhile ownership of smartwatches increased from 2% to 6% — taking into account new products by Pebble, Garmin and others while the new product category of “fitness bands” surged from nothing to almost 16% of our panelists. (the aggregated numbers are above 100% as many wore both a regular watch on one wrist and a band on the other)
  • Finally and most interestingly, the number of those who still didn’t wear anything on the wrist remained almost constant at 39% (vs the 40% previously measured) indicating possibly that these new products (early smartwatches and/or fitness bands) were not strong enough to convince a consumer to begin wearing anything on the wrist.

What was the impact of Apple Watch?

Key insights

  • We have reported many times, that the actual wearing-rate of Apple Watch is very high — still the case this month with a 95% ratio. For the balance of the 5% who don’t wear Apple Watch, 2.5% (half of them) reverted to wearing nothing on the wrist, 2% their watch and 0.5% their fitness band.
  • The combined wear-rate of “other smartwatch” and “fitness band” fell dramatically from 22% to just about 3% in that timespan reflecting that the Smartwatch is indeed partially an “upgrade” market opportunity.
  • On balance, this week’s report confirms that Apple Watch and by proxy all Smartwatches are not a simple upgrade of a “regular” watch. Almost half of Apple Watch owners come from a naked-wrist paradigm. Meanwhile (and recent financial numbers disclosed by Fitbit seem to corroborate), once a user has “upgraded” from a fitness band, the likelihood to revert is very low.

Purchase Criteria Evolution

We first asked our panel to report the primary reason they bought their first wristware device before Apple Watch. As the vast majority had bought a fitness band by then, and the balance a more “smartwatch” product like Garmin or Pebble, it was not a surprise to see 54% of the panel reporting buying it to track their activity/fitness and health and only 19% cumulatively stating “to be more connected” or “ to handle notifications” or another specific device capability. If one removes all N/A and “other” options, the percentage of panelists who reported Activity/Health climbs to over 70%.

Now let’s turn to the buying criteria around Apple Watch differentiating two cohorts. The “upgraders” are those who had bought another wristware device prior vs the “newbies” for whom Apple Watch is the first device.

First the “Upgraders”

Note how the number and ratio of the Upgraders who bought it for Activity/Health remain constant across the two cohorts at 32% and 31% respectively but the distribution of the remainder fluctuates significantly across the two.

With the “Upgraders” significantly being more aware and seeking the other “pillar” value proposition of Apple Watch and smartwatches. For instance, 26% and 22% vs 21% and 16% respectively state buying it for Notifications or to “be more connected” — about 20% difference in both instances.

What about when looking at those who wore a watch prior?

Well, for that cohort we notice a significant decrease in the number buying it for the Activity/Health and corresponding increase in the other “reasons”. In other words, once the stigma to wear something on the watch gone, the reasons to buy become less health centric.

The remainder of last week’s research focused on exploring the relative satisfaction for the main functions and capabilities of Apple Watch. We wanted this relative perspective to understand better what powers the very high 93% satisfaction rate for the product.

Here are the top features of Apple Watch, ranked by our users based on their increased satisfaction using them compared to their expectations prior to using. What stunned us when reading the results was seeing Apple Pay reaching pole position followed right after by the simple “the feel of it on the wrist” with 67% and 61% more or lots more satisfied than expected respectively.

The hard to measure value perception around the second stated reason “the feel of it” is particularly telling. Apple Watch is not just about what it does but also and importantly how it makes you feel, clearly bridging the divide between tech gadgets and personal fashion accessory. In other words, it seems that the stated mission of Apple for Apple Watch to be the most personal and intimate computing device is very grounded.

Handling notifications and checking Activity taking as expected the next two positions and our iPhone independence charging to #5.

When looking at the other side of the question, Siri once again takes top spot in the category of less satisfied than expected, with Maps and Remote control not far ahead.

What about the proverbial “Killer App”?

Apple as a company is always a “fond” topic of discussion for the tech industry. Yet the rhetorical conversations on Apple Watch have been staggering. While few have dared to call it directly a failure, many have used hyperbole to describe its perceived lackluster success — that is despite at least 12 million units already sold in its first 9 months and $4B in revenue for Apple :).

Chief among tech insiders complaints has been the lack of the proverbial “killer” app. We thought it would be revealing to ask your opinion on the topic and see how much of a big deal this is or is it purely a “easy-way out” to state a negative personal opinion?

If we look at your answers, the notion of Apple Watch not having a killer app only ranks fourth in our list. Ahead of it, our research shows that 57% say that spending less time with iPhone is the killer app and another 38% think that the notion of a killer app is irrelevant.

We agree with them! Restricting such a versatile platform to a unique killer app is misleading at best. According to history, was Visicalc really the killer app of the PC or simply one of the better apps that captured the power of it? In that vein, what in 2007 was the “killer” app of iPhone? Hard to say — right?

In your words, what are the type of apps, solutions or “things” that could become Apple Watch “killer apps”?

More robust and super fast integration with Siri for productivity tasks (e.g., sending short emails on the fly).

Game companion that incorporates tilt, motion and more. Gchat/WhatsApp or Facebook messenger app that really works instead of “reading” only from the watch. Reward program for health improvement with the watch, redeemable at participating stores and vendors (i.e. lose weight, get points for a health bar or coffee or something that you can get at a store).

Connectivity to internet of things

Complications — the killer app/feature for the watch is the ability to condense a lot of information into something that can be quickly and instantly glanced or tapped at from the watch face. The more app makers make complications of any type, the more useful the watch becomes.

I’ve no idea. Spending less time on my iPhone is the killer app

When the watch becomes your true ‘ID’ for things such as unlocking doors, entry to places, collecting all types of medical data.

Medical and health might be most important. Others might be replacing keys, wallets, perhaps passwords and security like an RSA key chain.

More health apps maybe. The real killer app isn’t an app at all. It’s the cumulative impact of lots of small efficiencies with notifications and Apple Pay and weather and stock prices and so on. Ready, real time access to useable and useful info from lots of sources is the killer app — but it’s a stealth app, rather than a single superstar. It has become a seamless part of my day.

Connected to my car, live audio chat; aka “walkie-talkie”, but primarily the 3rd party apps/glances/complications that already exist working faster.

Another big thank you for your ongoing participation. Please do not hesitate to share your thoughts and feedback with us — you can simply email us at research@wristly.co

Finally, you can now get your free trial issue of Wristly Pro’s Pulse on Wristware. Simply register for it here. Wristly Pro is the annual subscription to our core research findings and access to more granular and specific analysis. Try it now.

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