When Dr. Jan Wassmann sets off for a run, he has a wearable device on his left wrist, as he has done so for a few years now. The small device allows the GfK analyst to know precisely how fast and how far he has run in addition to his heart rate while exercising. The device delivers valuable information for Wassmann, who runs an eight kilometer course around his neighborhood once or twice per week, as to where and how he can improve his performance. Conversely, Wassmann and his colleagues also consistently generate data for the manufacturers of these devices. This allows the manufacturers to also ascertain how they can improve their market performance. And even more importantly, GfK analysts can determine which markets offer the most exciting potential today and tomorrow. Wassmann can turn to a wide range of data sources for his analyses, all of which allow the Global Product Manager Wearables at GfK to obtain a high-definition image of the dynamic wearables sector. Wassmann explains: “For anyone who wants to capitalize on an opportunity within the wearables market, we can supply the relevant data to launch at exactly the right time, on exactly the right market and, above all, in exactly the right sales location.” These are insights which only GfK can offer to their customers. Moreover, they are key to the success of market initiatives worth millions.
It is this key issue with a regional focus which provides the most relevant question: What should marketing and investment initiatives be focused on at this precise moment? Which region, where only yesterday sales were increasing quite nicely, could end up being of secondary importance tomorrow? And where should a company operate the day after tomorrow in order to generate maximum sales? Wassmann elaborates: “We observe highly variable geographical trends to ascertain how effectively wearables are received by consumers.”
While in the UK 19 percent of all consumers over the age of 15 already use an app or wearable device to continuously track their fitness activity, in China this figure rises to 45 percent. Capturing and evaluating fitness data is still a strong argument in favor of buying such devices. Accordingly, the markets in these countries feature contrasting characteristics. In addition, there are regional suppliers operating primarily in Asia who are able to tap into fresh consumer groups by working with local brands at far lower price points.
What exactly is a wearable device? And how are they perceived (and used) by those who purchase them? As a fitness tracker? A watch? A messaging platform? Jewelry? Perhaps it’s a mixture of all of these options. In fact, GfK analysts have shown, among other things, that smartwatches in certain price brackets on the German market are being forced into a submarket, increasingly replacing traditional timepieces in the process. “Wide-ranging expertise across various industries including technology, sport and health, fashion, essentially a diverse spectrum of product and market segments – from Smart Home to the concept of networked auto-mobility – is required to gain a holistic overview of market potential,” explains Wassmann. “In this regard, our long-standing experience in all industries stands us in good stead. This internal GfK network is vital. It allows us to offer our customers the expertise they need in a converging market landscape.”
GfK’s customers benefit particularly from the aspect that this profound knowledge of the market is permanently kept up-to-date by current data of the consumer demand. These is based on Point of Sales panels with which GfK can determine hard sales figures in dozens of global markets. While many competitors are forced to prepare their outlooks based on products they themselves have distributed, GfK has access to concrete sales figures from over 80 countries of the world, all obtained using the same standardized methodology. Claudia Spadoni, an analyst in GfK’s Trends & Forecasting Team states: “Accessing real sales figures allows us not only to supply significantly more stable forecasting models but also link data across markets, regions and time zones.” In short: GfK analyses home in on the essentials. For many key players in the wearables segment, in addition to numerous investors currently on the lookout for investment opportunities, these insights come as a huge benefit.
It is clear that wearables currently represent a highly promising product segment. In the most important European markets, sales of wearable devices in 2016 rose by 45 percent. For 2017, GfK is forecasting global sales figures of more than 183 million units – a rise of 50 percent year on year. However, it would be a mistake to look at this impressive growth and conclude that investments in the wearables segment are in general very rewarding at present. This is because developments in this segment are subject to regional variations, differing massively according to product segment, consumer group and wearables category.
As Mark Twain once said: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” It is precisely these difficulties which Jan Wassmann and his colleagues are attempting to counteract for all those taking the plunge in the highly promising wearables market.
01 In the relatively nascent wearables segment, wide-ranging expertise from a variety of industries and product segments is required – thereby affording a top-down overview which only GfK can offer.
02 The market offers enormous growth potential against a background of severe regional disparities. All relevant market data is required to position investments precisely.
03 Instead of vague sales estimates, GfK has precise sales figures for smartphones across 83 countries and for wearable devices (currently more than 30 countries). This facilitates more accurate analyses and forecasts than the majority of competitors can offer.