Thursday, February 25, 2016

Established retailers and startups are likely to cash in big in the next few years on a product that’s doing what many thought couldn’t be done. Wearables are gaining strong consumer interest, which means that companies focusing on mobile commerce should see greater success if they begin building products for the wearables market.

A Multi-Billion Dollar Industry

CCS Insight, a London-based research firm, released its official predictions for the wearables market on February 17, estimating that 411 million wearable units would be sold in 2020. The firm says that this figure will bring the entire wearables’ market revenue to $34 billion by that time.

Chief of Research at CCS Insight, Ben Wood said that these numbers didn’t surprise him. He stated that, even though 2016 predictions show only 123 wearable devices will be sold, “Given the rising consumer apathy toward smartphones, it is little wonder so many companies are chasing the rapidly growing opportunity presented by wearables.”

Wood went on to say, “We’re particularly excited about the potential for augmented and virtual reality devices, and we predict 2016 will be a pivotal year.”

Consumers Embrace Device Diversification

Device diversification is a primary factor in the rapid expansion of the wearables market. CCS noted today’s popularity of fitness trackers and smart watches, stating that these devices comprise nearly 76 percent of all wearable sales. However, they said that sales of IoT-enabled jewelry and clothing, as well as virtual reality headsets, are rising and that their likely acceptance by consumers will help grow the entire market.

By 2020, CCS predicts, virtual reality headsets, like Samsung’s Gear and Oculus’ Rift, will make up a huge percentage of the wearables market, with 42 percent of sales. This is a significant jump from the meager 12 percent that these devices bring in right now.

Looking to the Future

Instead of focusing on the 12 percent-type figures of today, it’s important that companies look to the future and understand why consumers are jumping on the wearables trend. Businesses must be able to gather and use information not only about today’s buyers, but also about those who will make purchases tomorrow. CCS points out that even though companies like Apple, which made the most profitable wearable in the Western World, sold only nine million units by the end of last year, Chinese manufacturer Xiami somehow captured one third of wearable sales in its country with the Mi Band line.

There is plenty of room for this industry to grow, and with it plenty of changes for the ways we live our lives. The future of wearables can absolutely include functionality, entertainment, and so much more – possibly on one device, but definitely on multiple devices and especially one ones that are streamlined to work together.