Professional services firm PricewaterhouseCoopers (PwC) spent several months surveying consumers and picking the brains of experts to tease out the benefits and drawbacks of the quickly growing wearable technology sector. The resulting report, The Wearable Future (www.pwc.com/cis), part of the company's consumer intelligence series, determined that there is indeed a future for wearables, especially for enterprising businesses ready to reshape the social landscape. Matt Lieberman, director of PwC's entertainment, media and communications practice, discussed some of the findings.
Q: How long will it take for wearable technology to gain widespread popularity?
Matt Lieberman: This is the great unknown, but there are some positive signs. In 2012, tablet adoption was at just 20%, which is similar to wearables adoption today. By 2014, tablet adoption increased to more than 40%. There is great consumer interest in the onslaught of new wearables products, including new smartwatches and clothing. If businesses offer wearables to their employees, that could speed up adoption rates.
Q: Which demographics are most ready to embrace the technology?
ML: Millennials and parents. Millennials are 55% more likely to own a wearable compared to adults 35 and older and 67% more likely to find new technology exciting and use it as much as they can. Over half of the millennial respondents to PwC's survey are likely to purchase a fitness band. Millennials are early adopters – they believe that wearables will strengthen relationships with family and friends, and decrease stress. Also, compared with adults without children, parents are more likely to own a wearable and two times more likely to believe that wearables will increase connections with family and friends.
Q: Which categories of wearables have the most potential?
ML: Per our research, consumers are most interested in fitness bands (51%), followed by smartwatches (35%), clothing (20%) and glasses (19%).
Q: How much are consumers willing to pay for wearable technology?
ML: Consumers are reluctant to pay for new gadgets that don't offer distinct, clearly understood utility. Price, of course, is a short-term barrier as the wearables market becomes more saturated and competitive, but in the meantime, there's another avenue for wearable makers to marshal their wares into the mainstream: through businesses. We asked consumers their willingness to adopt wearable technology products if they paid for it out of pocket at different price points – $100, $300 and $500 – and then asked their willingness to adopt the technology if an entertainment and media, health-care, retail or financial institution paid for it. In every case, consumers were considerably more willing to adopt technology if an institution paid for it.
Q: What are some of the main concerns consumers have about wearable technology?
ML: A meaningful number of Americans – around 9% – state that they do not think they will wear a smart device. Simply put, consumers are skeptical that wearable technology can deliver on its perceived potential, and the technology still seems irrelevant to many. Additionally, there are great concerns around security (86% of our respondents) and privacy (82%).
Q: How will wearable technology reshape the advertising landscape?
ML: The thinking goes, where there's a screen, there's an opportunity. Wearables allow opportunity for delivering advertising with much greater context and relevance to the user – solidifying the trend away from advertising as interruption and toward native advertising. The more relevant and engaging the advertising, the more it is valued content, the less it feels like interruption. Wearables turn advertising into activity-based engagement and integrate it even more closely into other content and experiences.