PwC: Future of wearable tech to influence healthcare and retail delivery
NEW YORK — As many as 20% of American adults already own a wearable device and the adoption rate — on par with that of tablets in 2012 — is expected to rise quickly, according to "PricewaterhouseCooper’s Consumer Intelligence Series – The Wearable Future report," a U.S. research project released Tuesday that surveyed 1,000 consumers, wearable technology influencers and business executives. Social media chatter also was monitored to explore the technology’s impact on society and business. In conjunction with The Wearable Future report, PwC’s Health Research Institute launched a separate report, "Health wearables: Early days," which further examines consumers’ attitudes and behaviors toward health wearable technology.
While fitness bands, smart watches and other wearables already are established in the market, many of them have under-delivered on expectations. Consider that 33% 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% of respondents were worried that wearable technology would invade their privacy, and 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. Among the top three potential benefits:
Improved safety: 90% of consumers expressed that the ability for parents to keep children safe via wearable technology is important;
Healthier living: More than 80% of consumers listed eating healthier, exercising smarter and accessing more convenient medical care as important benefits of wearable technology; and
Simplicity and ease of use: 83% of respondents cited simplification and improved ease of technology as a key benefit of wearable technology.
And for wearables to be most valuable to the consumer, they need 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.
“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 and 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.”
Both the consumer market and the business-to-business market stand to be radicalized by the mainstreaming of wearable technology, PwC noted.
As wearable devices gain traction over the next five to 10 years, they can help consumers better manage their health and their healthcare costs. But based on PwC research, wearables’ potential in the $2.8 trillion U.S. healthcare system only will be realized if companies engage consumers, turn data into insights and focus on improving consumer health. Additional key findings from HRI’s Health wearables: Early days report include:
Consumers have not yet embraced wearable health technology in large numbers, but they’re interested. More than 80% of consumers said an important benefit of wearable technology is its potential to make health care more convenient. Companies hoping to exploit this nascent interest will have to create affordable products offering greater value for both users and their healthcare partners;
Consumers do not want to pay much for their wearable devices. They would rather be paid to use them. Companies — especially insurers and healthcare providers — are offering incentives for use may gain traction. HRI’s report found that 68% of consumers would wear employer-provided wearables streaming anonymous data to an information pool in exchange for break on their insurance premiums. Moreover, consumers are more willing to try wearable technology provided by their primary care doctor’s office than they are from any other brand or category;
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, and, citing concerns about privacy, consumers trust their personal physicians most with their health data. Therefore, companies should ensure privacy policies are crystal clear. Physicians 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 health wearables data, especially as they become integrated into electronic medical records; and
Consumers may need a human touch to help them choose a device and its associated apps. An “apps formulary” of apps vetted by medical teams (and available in a virtual apps pharmacy) could help consumers wade through the thousands of health apps and devices.
“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.”
Wearable technology also will soon become an integral part of many retail experiences. It is 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. Rather than shopping across multiple channels — at home, on the go or in-store — the new consumer experience will be omnichannel, fueled by wearable devices and comprehensive analytics. 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.
Other findings impacting the retail experience include:
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. More than half (51%) of millennials said this would be information they’d like to know, as did 45% of the general population;
72% of people surveyed said it was very important for wearable technology to improve customer service. This was especially true among time-pressed parents, 76% 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”; and
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 and consumer practice partner and omnichannel 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.”