Another in our occasional repostings of our monthly tech column written for Marketing Magazine. This one on wearables and why Nike’s decision to ditch development of Fuelband is a course correction, not a category bail-out. The original article appeared here on 02.06.14.
The news in April that Nike may be discontinuing their wearable personal fitness tracker Nike+ Fuelband was met with a mixed wave of reaction spanning shock to schadenfreude. As more and more marketers consider offering utility and added-value services it seems worth giving a few minutes’ consideration here to its rise and purported fall.
Launched at South By South West in 2012 amongst much neon-lit fanfare, Fuelband felt like an inexorable, natural next step for Nike+. The nerdish joy of being an early adopter made the fact mine needed replacing three times in the subsequent year easier to bear.
Taking a step back for a moment, I’m reminded of a phrase that comfortingly comes up occasionally when you’re a new parent: ‘everything is just a phase…this too shall pass’. Indeed, take a look at Gartner’s 2013 edition of their Hype Cycle for Emerging Technologies and, sure enough, wearable user interfaces are placed at that most infamous of positions, the Peak Of Inflated Expectations. This is where cracks start to appear before a technology descends into the Trough of Disillusionment.
So is this just a stage? Or a sign of something else? Certainly in Fuelband’s case, its competitor Fitbit simply has had more traction and success, capturing 67% of the market in 2013, though not without a recent furore over a product recall.
The specific issues with wearables currently seem to centre around maintaining user engagement. To illustrate this, research by Endeavour Partners found that one third of American consumers who owned a wearable product stopped using it within six months.
Strong technologies with decent long term prospects habitually haul themselves out of the trough and go on to be successful. It strikes me for wearables to resolve the engagement issue and do the same in the months and years to come, two things need to happen:
1. Device consolidation
Fuelband’s minimal data collection and feedback loop already seems quaint. Nor does any smartwatch on the market offer a fully integrated solution. Instead we should expect a single, beautifully designed wearable device, capable of doing everything a smartphone already does and more – including capturing and reporting full body data – without draining battery life or weighing a ton. An Apple-led eco-system inevitably gets cited as the answer here, which does seem most likely when you add up the stories of a sophisticated Healthbook app and an iWatch on the near horizon, together with patents granted for earbud and/or headphone sensors. Nike pulling back from a hardware battle it can’t win makes more sense when a partner like Apple looks set to move centre stage.
2. Currency systems like NikeFuel need to have real world relevance and meaning.
Most likely to be brought about by stronger connections to product, tangible goals and other services. Certainly in Nike’s case their commitment looks to be to the software, not the hardware, with the launch of Fuel Labs in San Francisco, which will, they claim, “continue to leverage partnerships to expand our ecosystem of digital products and services, using NikeFuel as the universal currency for measuring, motivating and improving.” Make no mistake, for Nike, stepping back from Fuelband represents a course correction, not a category bale-out.
And the tech and activity industries as a whole will continue to run with wearables regardless. Witness the fact Facebook are buying things again, with their purchase of the activity app, Moves. The app doesn’t require another external device to work: it runs in the background, sensing motion and making assumptions on your activity and calories burned. And Google is working on wearables too, with the announcement of Android Wear, an OS for wearable tech.
Fuelband and its detractors, we may come to realise, represent just the baby steps down a long road for wearables.