With the evolving trends in technology and rise of the digital space, wearable devices are revolutionising customer experience. They have transformed from being simple fashion accessories, to incorporate a whole bundle of unique features including health monitoring, fitness, hands-free operations and more. The wearables market, valued at $19.6 billion (£15.07 billion) in 2015, is now growing at a compound annual growth rate of 16.2% to reach $57.7 billion (£44.27 billion) by 2022, as per a study by Allied Market Research.
According to the Worldwide Quarterly Wearable Device Tracker by the International Data Corporation (IDC), the wearables market is expected to double by 2021 with a total of 240 million units shipped. Smartwatches and smart clothing are key drivers of growth as shown in the figure below. According to the market intelligence firm, the shipments of wearable devices are forecast to increase by 20.4% this year from 104 million units shipped in 2016.
The above figure shows smartwatches account for the majority of all wearable devices shipped from 2017-2021. The basic watches that run no third-party applications (including fitness watches such as Fitbit, hybrid watches and kid watches) will outsell smart watches (devices running third party apps like Samsung Gear, Apple Watch, etc.).
Smart Clothing isn’t yet firmly established but is expected to change how retail stores function. For example, Google has teamed up with Levi’s to weave the technology into its fabrics that detect any motion. The smart clothing industry is expected to increase from 3.3 million units shipped this year to 21.6 million units in 2021.
There has been wide wearables adoption by consumers which has opened innovative ways for retailers to enhance customer experience. As per Deloitte, the wearables market is set to bring improvements to the in-store shopping experience and real-time marketing. A perfect example is Amazon Go’s ‘Just Walk Out’ technology allowing customers to select items and exit the shop without having to wait in a queue to pay. This hands-free shopping experience in retail stores will be facilitated by upcoming technologies such as Radio-frequency identification (RFID) and ‘Tap and Go’ mobile payments. Personalised marketing is expected to evolve through visual messaging, targeted offers and coupon notifications to customers on their wearable devices. This will allow customers to be aware of ongoing relevant promotions on their wearable devices as they walk near or into a store. An example of this is Waitrose launching its handheld self-scanning devices.
THE MIDDLE EAST AND AFRICA WEARABLES MARKET
The wearables market in the Middle East and Africa (MEA) region continued to see steady growth in Q3 2016. The ITC research and consulting services firm highlights a 38.3% growth in wearables across MEA in Q3 with a total of 487,000 units. While shipments of basic wearables (devices that don’t support third party applications) increased 16.8%, smart wearables contributed to the market’s momentum with 64.9% shipments.
“The MEA wearables market is amid a major transformation…Indeed, we are seeing an evolution of the market from fitness bands to smart wearables such as watches, earwear, and clothin,” Nakul Dogra, a senior research analyst at IDC MEA said.
“IDC expects that by the end of 2021, smart wearables will account for 43 percent of total wearables shipments in the region, up from just 26 percent in 2016.”
“Increasingly, tech firms are collaborating with well-known fashion brands on new offerings to keep consumers interested, and this approach will be instrumental in driving wearables growth as it opens up the devices to new audiences through the inclusion of point of sales in fashion outlets.”
The wearables market is set to improve customer experience and transform retail operations where the market value seems to be playing an important role. According to Deloitte, “forward-thinking retailers should think about incorporating this change in consumer behavior now and align their customer experience strategy so they are positioned to meet the needs of quickly evolving customer expectations.”
