Wearables Part 2: Evolution
Continuing my mini-series on the Internet of Things (IoT), let’s take a brief look back at my post about Wearables and Switching Costs. If you will recall, I was given a Garmin FR60 as a gift, which came with a free account to upload my workout history; time, heart rate, distance. I started running and decided to tackle a half marathon, and later that year, a full marathon. I needed a better tool. Buying another Garmin product was a no-brainer since I had already logged hundreds of workouts to my Garmin Connect account.
The switching costs for the services provided were simply too much. But, was it switching costs alone? No, had Garmin not had a quality product at an affordable price, the story may not have turned out the same. Others, lurking in the background, saw this coming. This is their story...du dum (this is the law and order sound)
This is a story about the evolution of an industry. While Garmin may have had the first mover advantage and quite possibly owned the market for a while, and perhaps still do (I will stand corrected on this if you know better as I’m not the expert), smart entrepreneurs and retailers were not sitting still. This is an especially salient point for those retailers who are eyeing IoT in order to increase business through after-market sales and services. The competition will not be sitting still and neither will smart innovators. So, if your primary business is the device, don’t lose sight of that over the service component. Keep your eye on the prize!
Where I last left off, I couldn’t leave Garmin because I had 1,477 workouts saved on my Garmin account…. or could I?
While these particular apps all offer their own Mobile GPS solutions to capture activity data, once they opened up their platforms to accept other GPS data, all bets were off. By eliminating switching costs as an issue, the user is now able to buy across competitor offerings for the device/gadget that best meets their needs as well as to choose the app platform that best helps them achieve their goals.
For example, let's take Strava. First off, what about those 1,400+ activities saved on Garmin before Strava came about? There's an app for that.
What is Strava? It is like Facebook for runners. You can select other runners to "Follow" -i.e. Friend on Strava and then view everyone's run, bike or other workout activity chronologically in your "News Feed." When you see an activity you can "Like" that activity by giving that athlete's activity "Kudos."
One of Strava's key selling points is that it is a supportive platform for athletes to encourage other athletes or compete with other athletes. Like-minded people sharing their like interests.
When you post all of your workout achievements on Facebook, your non-fitness friends might find it a bit annoying. See survey results below.
These apps offer something for everyone. Say you are a runner but have a hard time getting motivated if you have to run alone. Nike and others now offer Run Clubs through their apps and of course, they begin and end at a Nike location so you can pick up that cool headband you saw. Or perhaps you need encouragement to keep on striving for that marathon? Online coaching sessions, kudos from peers, menus while training for a marathon, buying the right apparel, there are apps.
If the consumer is no longer tied to a particular product, it boils down to what kind of experience they are interested in. Now new entrants without GPS solutions can even enter the market and a new online industry is born around running and biking activities.
So what does this mean? These apps will not dis-intermediate the likes of Garmin. Garmin still makes excellent products and their portal is of great value. What this does say, is that today’s customer likes choices and doesn’t like to be tied to one product line. They want flexibility to buy what is right for them. The apps mentioned in this post as well as others targeting these users, do just that. They offer a variety of unique and/or specific experiences for the users and also allow them access to a variety of vendors by porting data. I may wear a Garmin watch but want a Strava experience. It’s up to me.
Garmin, on the other hand, will continue to upgrade training plans and shoe tracker features that will "serve after the sale" through their portal. Will this alone stop the customer from considering competitors? Not anymore. Garmin must continue to produce the quality and functional devices that the modern runner and/or biker is looking for as well as stay on top of new concepts.
Garmin may not choose to be a community like the Strava community but it doesn’t mean they can’t co-exist. They will need to continue to offer unique information and statistics through their portal and possibly find new opportunities to add expert content, product reviews, personalized strategies that will help their customers make better use of the products and achieve their goals.
IoT is going to have a big impact on retail, and wearables are just one tiny dot. The key take-away to me was that what started as a great service to me opened up a whole community of opportunities for runners and bikers. No one retailer owns me in this. I own them and, I like it that way.
Yes, it's challenging to deal with today’s fickle consumer, not only do you have to provide a quality product, the sale doesn’t end with the product purchase, but is rather the beginning of a journey. Are you ready for it?
Now the question is: If I can save my workouts on a device agnostic platform such as Strava, will I purchase a Garmin running watch the next time around? It’s up to me!