My colleague at Artefact, Craig Hajduk, recently wrote an article about the business of wearables. As this new industry continues to pave its way, there are a significant amount of challenges not only with the technical, design, manufacturing, and experience side of a wearable product, but also the business side. "Both consumer electronics and apparel are notoriously difficult businesses competing in mature industries. Wearable technology — everything from activity trackers like Fitbits and Misfits to watches like the Pebble to jewelry like the MEMI bracelet — blends two notoriously difficult, mature industries together: consumer electronics and apparel. Success is not guaranteed.
Design is often touted as the secret to success here, but what’s often overlooked is the business models that will ensure wearables will take off. Because the fact remains that like many cool new ideas, some wearables may just be technology in search of a problem to solve. And even when they do solve a problem for users, the unanswered question still is how to create new and sustainable businesses around them.
That’s where design thinking — with its ability to tackle complex problems from the perspective of deep user empathy — is the right approach to designing a business model strategy for wearable tech. In fact, the business model for wearables can be a key part of the product experience itself: The very tools that help create the product can be used to identify which models will support and enhance the customer experience.
Digital music services is a great example where the business model was a critical piece of the iPod product experience design and its success: Apple understood that a feeling of ownership was critical for digital music, and focused its attention on making purchasing and owning digital music as easy and intuitive as possible. Many pundits predicted streaming or rental models would overtake iTunes, since they were more affordable or provided access to more music. Yet, without a sense of ownership, the long-term value of those streaming and rental alternatives was harder for users to “get.” The results of those design-driven choices — and of course other factors — are clear: Apple iTunes business generated $4B in revenue this past quarter, while streaming and rental services continue to struggle.
As with digital music, wearables companies need to understand consumer expectations from these technologies. We can’t just create aesthetically pleasing products that generate interesting quantified self (QS) data — we need to create compelling experiences that connect emotionally with customers, to help them realize their goals and aspirations."
Continue reading on Wired
Image from The NY Post
