Wearable technology is one of the most exciting sectors in the consumer electronics market. New, innovative products such as activity trackers that measure distance traveled, wireless headphones, voice-controlled smart assistants, and smartwatches that have the ability to conduct electrocardiography scans of a user’s heart, represents one of the most cutting-edge ways that consumers interact with technology.
In 2018, four in 10 Canadian consumers own some sort of wearable technology product, according to Mintel research. What’s particularly interesting is that among those who own wearable technology, one-third say they own it because they received it as a gift. Among those who received wearable technology as a gift, only a third agree that it is a great gift to give someone.
Among those who received wearable technology as a gift, only a third agree that it is a great gift to give someone.
Many young adults are purchasing wearable tech as a gift for their parents because of – among other reasons – the health benefits, with 18-24-year-olds the most likely to say that wearable tech makes a great gift. This could be an effective strategy to market these devices to young adults, positioning them as gifts that help their parents lead healthy lifestyles.
Although conventional logic would suggest that a technology that is significantly dependent on gift giving is in a vulnerable position, some of the underlying numbers suggest that wearable tech is successfully leveraging the opportunity that gifting has offered. For example, among those who received it as a gift, more than a quarter expect that they will buy more wearable tech in the future. In comparison, only one-tenth of consumers who do not own wearable tech expect to buy any in the future. This suggests that gifting can be thought of similarly to a product trial. Consumers who otherwise may not have purchased wearable technology are now more likely to buy it the future because they’ve had the opportunity to use it.
What we think
Overall, wearable technology’s dependence on gifting is not ideal. Since one-third of owners did not actually invest in their devices, it’s possible that a major portion of the industry is held up by gift givers, or people who have relatively little interest in the actual usage of the device. However, wearable technology’s dependence on gift giving is not necessarily surprising. As it stands, wearable technology is a collection of exciting devices that can have positive effects on someone’s health, but in the eyes of many consumers it is difficult to justify spending a considerable amount of money on a gadget for themselves. Considering that the ideal gift is typically something that somebody wants but likely can’t rationalize purchasing for themselves, there is a clear fit between wearable technology and gifting.
The good news for the wearable technology industry is that it seems to be taking advantage of this position in the market. Gift recipients are more likely to be future purchasers than those who don’t own any wearable technology at all. While this may not be an ideal scenario for wearable technology, it provides a unique opportunity to leverage gifting to drive future sales, especially as a marketing message during the holiday gift-giving season.
