What retailers can expect from the wearable future

A man walks into a store intending to make a couple of small purchases and get out, but because he is a smart glass convert, the retailer has other plans. The store knows this particular customer has been thinking about a bigger purchase: a new TV. The retailer knows this because his wearable has noted a positive response to ads, his research online, even the brands and features he might prefer. So while he's making for the items on his list, the retailer sends a friendly notification offering 20 percent off one of his favorite TV brands, even pulling up augmented reality directions to show him the way.

For retailers, this has been the promise of wearable technology. Yet for all the buzz and anticipation around these devices that wearable future still seems distant. Google Glass (NASDAQ:GOOG) debuted to great interest last May, but social uncertainty and a high cost of entry saw it recede with little more than a whimper. So with new devices on the horizon, what can retailers realistically expect from the future of wearables?

For one, like all new tech, general adoption will be slow. According to a Pricewaterhouse Coopers study, "The Wearable Future," which surveyed 1,000 consumers of various ages, incomes, regions and genders, many people still don't see the value of wearables devices. At least not at the current price point.

According to the survey, 40 percent of respondents didn't think they'd have any use for smart clothing, 36 percent could do without a smart watch or fitness band, and 35 percent eschewed smart glasses. Why the reluctance? For the most part, people feel like they already "wear" a device that can do most of the things wearables boast.

"If I head out the door in the morning and leave my fitness band at home, I'm not going to turn around to go back and get it," said Jeff Malmad, managing director and head of mobile and life at Mindshare. "If I leave my phone at home, you bet I'm going to go get it."

Despite skepticism, wearables adoption is on track with tablets

That's no reason to write off wearables, though. In fact, wearable adoption appears to parallel that of tablets. Currently, 21 percent of American adults own a wearable device of some kind, according to the PwC survey, similar to the 20 percent of Americans who owned a tablet in 2012, just two years after the start of the tablet market. By October 2014, the time of the PwC study, 40 percent of Americans owned tablets. This, despite concerns that tablets just offer the same features as a smartphone on a larger interface.

And much like tablets, 76 percent of consumers say a wearable would not need to replace their smartphone to justify a purchase. That attachment to the "original wearable" could hold some clues for how retailers can engineer their wearable experiences early on.

Seth Burger

"It is not [about] how to use wearables differently than mobile devices, but rather how to synergize mobile with a proper wearable application," said Seth Burger, content marketing assistant at software solutions company Chetu. "Obviously, there are some inherent limitations on wearable technologies. Creating applications that use the convenience, portability, and the heads up display (HUD) of wearable tech devices with the functionality of a mobile phone or tablet, is the best way to maximize an application's potential."

In these early days, the tactics retailers use in their wearable initiatives will likely look pretty familiar: geo-fencing to send alerts and promotions to shoppers in the area and draw them into the store and in-store beacons to further target contextual messages for shoppers.

Wearables have significant limitations when it comes to HUD and screen size, though. Retailers should work on integrating their apps and functions with the interface of those devices, but in the meantime using smartphones and tablets to help enhance the wearable experience could be a smart path.

When retailers get to the point where they can appropriately gauge what customers want out of a wearable experience and optimize for that, less will be more, believes Chetu's Jane Powell, global sales director of retail, grocery, supply chain and strategic solutions.

Jane Powell

"Mobile is an extension of an online experience with some personalization," she said. "Wearables will need to have a more defined purpose and to this extent less is more. Research on how their consumers will utilize wearables and a consistent user testing will allow retailers to create a more enhanced experience."

The good news is that for the retailers who put the time into developing those experiences, shoppers are ready to embrace them. According to PwC, 72 percent of people surveyed felt it was very important for wearables to improve customer service (especially busy parents, 76 percent of whom want wearables to make shopping a more pleasant and efficient experience).

Loyalty is another area of wearable opportunity, as 37 percent of millennials said they would be motivated to use one of the devices if retailers offered loyalty points for frequent use, 52 percent would be interested if they offered monetary rewards, and 46 percent would be on board if the device had apps or features that would help them cut back on spending.

And as for that shopping scenario at the beginning, 59 percent of millennials said they would find that kind of highly targeted offer useful, along with 41 percent of older adults.

Scott Varland

"I think we'll see higher rates of engagement with wearables if only because they're more accessible," said Scott Varland, creative director for IPG Media Lab. "So early efforts will produce good results. The catch is, many retailers are behind in developing an app strategy—and that will slow progress with wearables because almost all of them will need an app as proxy for the in-store information."

That means retailers should start testing out their apps now. The number of customers actually using wearable devices in-store may be small, but they can provide a manageable group on which to try out new ideas before wearables become more mainstream. Savvy retailers will need to keep an eye out for the newest devices as they roll out over the next couple of months, including of course, Apple's (NASDAQ:AAPL) new Watch when it streets on April 24.

Sony SmartEyeglass—early March release

People didn't take to the aesthetics of Google Glass, and Sony's (NYSE:SNE) smart glass product is even bigger and bulkier. Considering the quiet decline of Glass, that doesn't bode well. But Sony's device does have a couple of advantages. For one, it has a wired controller that can be used to navigate the user interface and control the device's camera, which could prove helpful to less tech-inclined users. There's also Sony's Eyeglass Attach, which cleverly allows users to clip the device onto eyewear they already like or own. While still a bit clunky, minimizing the size of that attachment could eventually help Eyeglass bypass the issue of aesthetic appeal altogether. If nothing else, more competition in the smart glass space will be healthy and encourage innovation. Google Glass is down and out for now, but supposedly slated for an eventual return, and when it does, Sony's device could keep Google's developers on their toes. 

Apple Watch—April 24

As its efforts to move the needle on mobile payments showed, if there's one tech company that can introduce a new idea and make it stick for the mainstream, it's Apple. The Apple Watch is already highly anticipated, and its smooth integration with Apple Pay could give consumers the motivation they need to make the jump to both wearables and mobile payment (swiping your watch is significantly less trouble than pulling out your phone after all). It also has the benefit of being less intrusive than eyewear, so it could easily be applied to Human Capital Management purposes, integrating alerts and task setting to get the most out of employees. The small screen will require retailers to prepare by recalibrating their apps, though.

Google Glass?—TBA

Even when it had the most buzz, Google Glass was for early adopters. Price point and the lack of aesthetic appeal killed it as an option for most casual tech users. That said, the augmented reality applications that were floated as possibilities would be highly useful to retailers looking to create a stand out shopper experience. Knowing what customers are looking for and tying it into loyalty, targeted marketing and e-commerce will help. Google has said it plans to bring the eyewear back, but the question is in what form?

"They didn't really know what it was a solution for and so it just existed as a novelty—at worst a menace," Varland explained. "It's hard to return to a useful product after you've gone there. I think we will see Google return to the drawing board and come out with something along the lines of [augmented reality wearables] HoloLens or Magic Leap."