The Elephant in the Room – Just How Big Will Wearables Get?
Corporate Wellness Magazine
The forecasts are strong for the growth of the wearable device market but not everyone agrees that volume in the industry equates to value. Technology analysts say some of the companies who offer these devices to the corporate wellness industry need to educate employers how to engage employees rather than solely market to them and sell their products. Employers have sought these devices as a means to improve the health of their employee population by encouraging them to exercise more and improve diet through measures such as calorie-counting. Wearables are worn as devices either on the body or within clothing.
Guillaume Girardin, technology and market analyst, MEMS & sensors, Yole’, Lyon, France, an emerging technologies research firm, holds wearable technology companies accountable for its ultimate growth in the marketplace, noting some current business models of companies do not help either the employer or the wearable company. Companies come out with low-cost products, the end user buys them, but within a short timespan they lose interest. In order for companies to recapture the market, they innovate by adding apps—but this is not the best long-term approach, according to Girardin.
“For these wearable companies, they will never expand their business by using the low-end approach,” Girardin explained. “That is why this business of fitness trackers is doomed and will be replaced by smartwatches.”
Most people do not get educated about the science behind them and that eats at their motivation, according to Dr. Rosalind Picard, media lab scientist, Massachusetts Institute of Technology (MIT), Cambridge, Massachusetts. As corporate wellness programs continue to be top constituents for the adoption of wearables, statistics show both employers and employees have yet to fully embrace the technology and commit.
Increasingly, employers are seeking more knowledge about new and innovative ways to engage their employees within their wellness programs. An extensive September 2015 survey of national employers in the United States by the Corporate Health & Wellness Association (CHWA) found that the inclination by employers to use wearables in the workplace is strong but more than half of employers lacked knowledge about how to implement them, which device to choose, and what technology platform works best to track data within their culture.
The comprehensive list of 46 questions reached 1,050 employers and 306 people responded. The CHWA survey, The State of Wearable Technology in the Workplace, will be released November 18, 2015.
Employers cited how to drive retention among employees is one of the top three factors keeping them sitting on the sidelines. Other concerns by employers who completed the survey included administrative costs, lack of knowledge regarding the products and uncertainty about the return of their investment (ROI).
The survey reported that employers are also very uncertain which device to choose. Fitbit, Jawbone, Misfit, Fitlinxx and Fitbug are among the top names of fitness tracker companies that sell into corporate wellness programs, according to Angela McIntyre, research director, Gartner, Inc., a leading information technology research and advisory company headquartered in Stamford, Connecticut.
“Approximately 30 million people in the United States would be eligible to receive a wearable fitness tracker if most companies with at least 100 employees were to adopt them in their wellness programs,” McIntyre explained. “In the United States, 17 percent of online adults less than 75 years old use a fitness tracker or fitness wristband, and of these adults 73 percent have a full-time job.”
The CHWA survey results reveal similar findings: Sixty-four percent of survey respondents said they do not offer wearables in the workplace. The employers who do provide them—approximately 41 percent—said the company does so at no cost to the employee and nearly 38 percent subsidize a part of the cost.
Future Growth in Wearable Technology
Employers can expect the markets for personal health and fitness products, smart watches, and smart glasses, to be worth $101.2 billion in 2018, according to Generator Research, a U.K.-based industry research firm. As wearables become more complex and measure more parameters, they will require more sensors to be installed in them. The number of sensors used in a wearable device have almost quadrupled since 2013.
Wearables are, without any doubts, a promising industry. But which category will benefit from this attracting market remains to be seen.
“The wristband space is at a premium,” Andrew Sheehy, founder and chief analyst, Generator Research, said. “Sports performance devices have grown into a mature market. We will see that growth become negative growth as that functionality integrates with smart watches.”
Sheehy added that within the wearable marketplace, smart watches will dominate the market and demand for smart glasses are set to soar.
“They are primarily an industrial application and it is a desirable market,” he said. “At the consumer level, there will be a smart contact lens that has the functionality of glasses but integrated with wearable devices on other parts of the body, such as a wallet, a belt or a chip in one’s pocket or purse.”
Wearables in the Workplace
Wearables such as fitness trackers, when engaged for the long haul, have the opportunity to transform a workforce. For employers looking into adopting wearable technology in the workplace, scientists like Dr. Rosalind Picard from MIT suggested to request information about accuracy.
“How studies are culminated is key as statistics can prove anything,” Dr. Picard offered. “So you want to take a look at what they are doing and exactly how they are collecting the data. Also, ask about false alarm rates—how wrong can they be. You want to know how harmful it will be if the fitness tracker is wrong. So far, companies have not been forthright.”
Some wearables claim to measure stress or sleep quality but function rather as a motion detector.
“Most of the consumer wearables out there today make a scientist like me grimace,” explained Dr. Picard. “If you’re glued to a great movie, it says you’re asleep—but you’re not. The scientist in me wants accurate data, so I am concerned about the lack of accuracy and integrity in some of the marketing out there.”
Employers and insurers expect wearables to provide valuable health insights, but few employees are interested in using wearables to share health data, citing indicated the Internet began similarly. “Disclosure is a good thing,” explained Sheehy from Generator Research. “It encourages commerce and exchange. Just look throughout the course of the Web. Over time, there were fears that too much information was being shared. If it is a major economic benefit, how responsibly are you handling it?
As time passes, employees will want to wear whatever device they prefer. Ben Arnold, consumer electronics analyst, NPD Consulting, Chicago, Illinois, said that wellness programs will need to incorporate more open-mindedness. “They are eventually going to need to accept different data formats and using different sorts of devices,” Arnold said. “It can get tricky to track steps in a slightly different way or money is attached to those results. Until then, HR departments are going to get a lot of questions like, ‘why can’t I use my Apple watch instead?’”
Looking Ahead: 20 to 30 years
“We have been trying to get computers onto the body before cell phones and laptops since the early 1990’s,” Dr. Picard said. “But we are now stepping into a gray area of medical insights.” Wearable chips mounted underneath the skin that provide biometrics is one path technology may take. A chip attached to a pill that an individual swallows is another.
“Ingested pills that offer screening were once used by NASA for many years and will transition into a commercial application,” said Sheehy. “A clinician can understand then if the medication the individual is using is being absorbed properly.”
Other technological advances for the healthcare marketplace? Consumers will be able to breathe into a patch on a smartwatch to detect if they have cancer, Sheehy added, noting that the details are extremely complex because, for example, the chemical analyses need to be fed back in real time with tens of millions of other individuals to provide a correct diagnosis.
With healthcare costs at seven percent of gross domestic product (GDP) and the largest percentage of those costs incurred after the patient develops symptoms—they’re unable to work or hospitalized—employers of the future will want to detect illnesses earlier and earlier to reduce expenses, Sheehy said.
What’s Next … Now?
Wearable technology will be the next frontier that advances population health management. Opportunities are boundless but so are the hurdles. Employers face increased concerns how to best navigate the space. Accuracy of data, prolonged lack of enthusiasm by employees and privacy fears all intersect at a point where employers want to reduce costs and increase their employees’ physical activity.
Until answers are provided on how to solve these issues, for now employers consider the strongest measure of success in implementing wearables is they have a happier workforce—79.1 percent said in the CHWA survey, followed by employee weight loss at 61.5 percent.
The rewards for employees who engage wearables in the workplace tend to receive gifts such as t-shirts, water bottles and golf/exercise equipment, followed by discounts on insurance premiums. To increase participation in wearables, almost 84 percent of employers surveyed said they will implement individual fitness challenges at work.
To receive a copy of the survey, The State of Wearables in the Workplace, email [email protected]