Why are 50% of customers abandoning wearables within six months of use?
Today, the healthcare wearable industry is booming, witnessing compound annual growth rates of 25% to 2020. In 2015, the market was worth $5.1 billion. Strong customer demands and surging sales are one side of the story; the other side of the narrative captures the tale of a highly volatile marketplace where due to intense competition, there is a revolving door of company entries and exits. In fact, for every 100 wearable technologies, less than 5% make it through that door.
Accordingly, our team, through its tracking of winning and losing strategies in the wearables space, has put together a list of issues most commonly plaguing products failing to live up to their expected promise.
- Over Engineering Complicates Development and Usage
A recent survey conducted by the Acquity Group on wearable use noted 24% of consumers found their health monitor to be too complicated. Wearable device makers trying to pack too many bells and whistles actually end up making the product too complicated for the user to understand and maximize its multifaceted applications. End-user research shows that depending on the device, anywhere between 33 to 50% of customers will stop using a purchased wearable within six months.
Many health wearables demand a great deal of user effort to enter information, perform calibrations and require the user to interpret information on their own. If the user fails to regimentally perform certain interactions, it diminishes the usefulness of the information provided through the user interface.
Take, for example, the case of the Kreyos Meteor smartwatch, a product that raised over $1.5 million on crowdfunding platform Indiegogo. In an effort to distinguish from other wearables, the product attempted to capture an over-ambitious spectrum of information and functionalities that could be performed on the device. Ultimately, after multiple delays, the final product was overly complicated and did effectively accomplish of its core features. In contrast to crowdfunding success stories like Misfit and Pebble, stories like Kreyos are becoming more of the norm for wearables developers.
- Wearables Have Limited Plug-and-Play Features
Many wearable developers, in an effort to emulate Apple, create products capable of operating in a restrictive platform proprietary to them. The assumption being that they can then capture the consumer and position other services and applications. However, unless a device is as transformative as the iPod and iPhone, there will be a great deal of resistance from consumers to abandon the other systems and technologies they currently use. Customers want plug-and-play, not another platform. Devices like the Samsung Galaxy Gear 2, Nike Fuel Band and Jawbone Up overestimated to what degree customers would be willing to buy into their ecosystem. In fact, Samsung, which once controlled 71% of the smartwatch market, indicated in March of 2015 it was putting a “pause” on new wearable products to rethink its strategy.
The true next-generation wearable devices will go beyond syncing with smartphones and will automate a variety of interactions seamlessly between the wearer as well as potentially other wearables and connected technologies. Companies like Withings aren’t just focused on the wearable tracker, but also looking to develop and interact with other devices in the “smart home.”
- Discounting the Importance of Security and Privacy
Many companies, in a rush to get their technologies to market; have made glaring oversights regarding privacy concerns and other vulnerabilities of their devices.
Famously, the first generation of Google Glass caused a public uproar when it was released into the marketplace, and lawmakers were then forced to react and consider the repercussions of this technology on privacy and security.
The implications for medical-grade technology are even more precarious. Academics have shown how easily wearable medical products, like insulin pumps, can be hacked and altered to perform potentially catastrophic actions. Even simple monitoring devices can not only be penetrated to reveal health information about the user, but potentially leveraged to create a backdoor to other connected health information databases.
Developers must be predictive, not reactive, to what potential scenarios their device could experience, and what precautions must be taken to prevent adverse breaches.
- Unreliable and Inaccurate Data Capture
Many wearable developers proudly tout the number of biometrics and data points their device is able to capture as a chief selling point. However, many of those devices are often found to have a high degree of variability in terms of the accuracy of their captured biometric data versus the information captured from more reliable devices considered to be the gold standards of clinical testing. Fitbit shares have dropped 18% and the company is facing a big setback as allegations of inaccurate heart rate monitoring technology emerge.
Oftentimes, wearables are able to capture accurate information in very specific idealized circumstances, yet when exposed to a wider gamut of use cases, the information is highly inaccurate. For example, even when comparing information from first and second generations of the Microsoft Band, users have found a high degree of variability. How can users be expected to make decisions about their health when the discrete data being presented is itself ambiguous?
- Medical Versus Consumer Strategy Prioritization
Staff and resource limitations force early-stage developers to judiciously narrow down a potentially wide field of directions for their technology to one or two targeted areas of focus. One of the biggest decisions these companies must make along this path is whether to position their device as a consumer device for health and wellness or a true medical-grade product validated for use in clinical decision making.
Invariably, most developers choose the path of a consumer focus over medical. Part of the rationalization is that as a consumer device, the technology would not fall under CE mark or FDA regulatory guidance. This more navigable path to market allows them to quickly commercialize and show revenues to investors.
Ultimately, information captured on a device intended for more general health and wellness cannot be used by a chronic disease sufferer or medical professional to make any sort of definitive decision on a diagnosis or course of treatment. Though it is a more complicated path to market, requiring buy-in from stakeholders across the healthcare continuum (payers, patients, clinicians, hospitals, etc.), a product approved for medical use has a greater potential for delivering on value and long-term staying power.
Accordingly, our analysts are beginning to see a shift away from the crowded consumer wellness sector to more robust medical solutions. A main reason for doing so is that consumer market dynamics are prone to chase style over substance. By focusing on medical-grade solutions, developers are starting to see more tangible value from applications tackling some of the most glaring inefficiencies in today’s care delivery.
Take the case of the AmpStrip product, which our analysts came across at the Consumer Electronics Show (CES) in 2015, where it received a CES Innovation Award. A wearable patch capable of capturing heart rate, respiratory function, activity, sleep, skin temperature and posture, the device was originally positioned as a fitness product. Through Indiegogo, the company far surpassed its fundraising target and raised over $500,000. However, in October the company announced:
Going forward, the company is focusing on the device’s potential uses as a medical device. As you can imagine, there are so many potential medical benefits—the ability for patients and doctors to monitor irregular heart rate, respiratory function and activity levels to name just a few. FitLinxx believes that in that capacity, this device can make a huge difference in people’s lives.
While likely a disappointment to early investors who were hoping to get a differentiated fitness tracker, we believe in light of market trends, the company made a wise decision to alter its course, putting it in better position to address the more challenging issues of chronic disease management.
The medical wearable market presents a gigantic opportunity in the future, but it is critical to engage the medical community as early as possible so doctors and hospitals can utilize the data and analytics for prevention and reduce hospital readmissions over time.
The future in wearable technology lies in the cognitive computing sector, and creating segments of people with similar data measurements capable of predicting or preventing future occurrences. Medtronic’s new app for diabetes management partnering with IBM’s Watson is a wonderful example of predicting occurrences of hypoglycaemia four hours before it occurs. It helps to reduce cost and improve quality of life for diabetics, and in the true sense of the word, a technology that is an “actionable wearable”.
This article was written with contribution from Kamaljit Behera, Industry Analyst and Venkat Rajan, Global Program Director of Visionary Healthcare with Frost & Sullivan’s Transformation Health Program.
This article was written by Reenita Das from Forbes and was legally licensed through the NewsCred publisher network.