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[12 comments]

Amazon opens store dedicated to wearable tech

April 30, 2014

As a recent Women's Wear Daily article pointed out, the recent decision by Nike to lay off most of the hardware team working on its FuelBand fitness device, as well as slow sales of Samsung's Galaxy Gear, has led some to question the market for wearable technology, at least in the short term. It appears as though Amazon.com doesn't share that feeling as the company announced yesterday the opening of its Wearable Technology store (www.Amazon.com/wearabletechnology).

The new online store will feature a wide variety of wearable tech devices — activity trackers, smart watches, wearable cameras, etc. — from manufacturers including Basis, Bionym, GoPro, Jawbone, Misfit, Narrative and Samsung. (Google Glass will not be an offering.)

Amazon's new store features the "Learning Center," which includes buying guides and product videos, as well as the "Editor's Corner" for wearable tech news and device reviews.

"Wearable technology is an exciting category with rapid innovation and our customers are increasingly coming to Amazon to shop and learn about these devices," said John Nemeth, director of wireless and mobile electronics at Amazon. "We're thrilled to bring our customers a store with the largest selection and great prices that helps eliminate the guesswork when deciding which wearable devices best fit their needs — whether that is tracking activity, staying connected through smart watches or capturing their next adventure with wearable cameras."

FINANCIALS:     [NASDAQ:AMZN] [ ]

Discussion Questions:

Are there particular types of devices that you expect to succeed or fail in the early years of wearable technology? Will the opening of Amazon's new store help accelerate adoption of wearable tech?

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Instant Poll:

How likely is Amazon's new Wearable Technology store to be a success?

Comments:

I think it's still really early in the wearable tech space. The fitness devices are pretty primitive really...mostly glorified pedometers. I see the future going in 2 distinct directions:

  • Health monitoring: that's for us Boomers who want to be untethered from doctors but who have real health issues to track.
  • Fashion. So far, there's not a lot of fashionable wearable tech. I'm thinking blinking lights, the equivalents of "mood rings" in clothes....changing colors, etc. As chips get cheaper, why not?

For the first, we have to look to the medical folks. For the second, I've got my eye on Apple.

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Paula Rosenblum, Managing Partner, RSR Research

The old adage of WII FM is still true ... What's In It For Me?

The challenge with wearable technology is understanding the value. When you can get everything on your smartphone, why wear a clunky wrist device that only displays a few things?

Consumers literally need to "see" the benefits of owning a wearable device. And, the retailer stores have been woefully inadequate in demonstrating that value.

It will be a very, very interesting experiment to see if Amazon's approach and "learning center" can deliver the WII FM that has been missed by both retail stores and the brands themselves. This is a great Omni-channel case study unfolding before our eyes.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

This is a long-term bet on the part of Amazon. If they set up a go-to website for wearable tech, then when it hits big, Amazon stands to gain share over Best Buy, et al.

While wearables aren't quite ready for prime-time (at least from a consumer point of view, B2B may be another matter), they will inevitably evolve into something really interesting. Having been a Google Glass Explorer, I can say that the capabilities of a visual-field wearable are impressive. Sure, it's clunky now. But it won't be clunky forever.

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Liz Crawford, VP, Strategy & Insights, Match Drive

It's not clear (to me, at any rate) where the market is going for wearable devices; at least I haven't heard/seen that the devices were jumping off the shelves, so I think Amazon's anticipatory move into this market may be too early and impulsive.

You'd think there'd be a ton of research, i.e., business scenario management, to support this bold move, so is there such data to support this?

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Naomi K. Shapiro, Strategic Market Communications, Upstream Commerce

Much of the volume, and indeed the few success stories, for wearable tech have been in the category of health and fitness. The "quantified self" category has seen a lot of traction with products like Fitbit and Jawbone's Up line of wearables.

GoPro could certainly be put in the success category as well, with a strong value proposition for capturing video in sports and activities.

Some of the bigger question marks right now are in the areas of "communicators" and augmented reality devices. The "smart watches" are more of an extension of the phone, with the proposed value being in the ability to accomplish tasks without taking out the phone for every task or notification. I expect these to improve over time and to adapt based on consumer feedback, with usability and performance needing a few iterative tweaks before they move beyond early adopters.

And then there are more extreme wearables like Google Glass, which has some or all of these elements rolled into one, with augmented reality being the bigger hurdle for many consumers to get their heads around.

Retailers definitely have an opportunity to help guide confused and curious shoppers through this landscape. This can be an area of consultative sales and service to help coach consumers on their options on navigating the connected lifestyle.

And Amazon will almost certainly take the long view, providing videos and guidance for shoppers to learn about the options and choices as they continue to develop.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

This is another great discussion with many relevant issues at play directly tied to Amazon's future. The first is slow sales. Amazon is having to address the market and its tricks and traps, including an economy that is unfriendly to any and all business worldwide.

Perhaps the most fun and least obvious question in the article is if Amazon can build a brick & mortar store that works. This is important because if they don't, the feedback on new and improved product will inherently be contaminated towards a failure of some sort. The good news is the whole world will be watching and many will dip a toe into this new market for short and long term commitment.

There is nothing more amazing and as fun to watch as the evolution of Information Technology where one day you are the new smartphone and the next day you're sleeping with the beepers.

'gjarnoldjr'

There's a demographic that loves wearable tech and wants to purchase more. It makes sense to create a nexus where the curious and affluent can get inspiration, try new products, and add them to their portfolio.

I'm looking for big adoption of the Google Glass contact lens; that really could have legs.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Wearable Technology is the future, no question about it. Technology succeeds where it removes a pain point, simplifies a process, removes steps, or improves on an existing process, vs the analog behavior. Facebook made keeping in contact with family and friends (old and current) much easier and more efficient, for example. In the case of wearables, anything that advances us from pulling out the phone/phablet/tablet to keep up to date, freeing up our two hands in the process, will succeed. It may not be Google Glass (the Segway of the category - life-changing in small niches; irrelevant to the masses) or watches (ironically, it's far ruder to keep checking your watch during meetings, than to look at your iPhone), but the breakthrough will come and someone, somewhere, is probably building it as we speak.

But there's also potential to miss the forest for the trees here. There's another story about Amazon launching the store at all. It doesn't take more than a two-pizza team and a few weeks to launch a new store - the items were already being sold by Amazon so this is just one more "placement." There are dozens of these around the site at this point. Will it succeed? Who cares? If it does, great. If it doesn't, the loss is practically measurable. Launch. Measure. If it's doing well, lean in. If it isn't, pivot or walk away.

These are the pop-up stores of the Amazon era, but without the high-priced, Times Square real estate, fancy interior design, and high-end personnel. No, the question is not about wearables. It's about the advantage Amazon has identified by being able to out maneuver brick & mortar with more engaging, fresh and relevant experiences launched before traditional retailers have even identified the trend. That's a scary proposition, and one retailers would do well to think about as they develop their omni-channel strategies.

Daniel Silverman, Vice President, Business Consulting Services, Clavis Insight

Wearable technology will continue to grow and evolve, but is here to stay. I use a Pebble watch and find it to be a convenient device to get get quick status updates when I don't want to pull out the phone. I also use a Fitbit on the other arm to track activity. While these may be simple uses today, as these devices evolve and become more capable and less clunky (and are all integrated -- remember carrying a Palm Pilot and a flip phone?), the adoption will continue to grow.

I don't think Amazon opening a storefront will accelerate adoption, but why not take advantage of a way to consolidate and showcase what is available?

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Brian Numainville, Principal, The Retail Feedback Group

The initial wearable market has been fitness with a large number of entries in that space. Nike's exit in that space with the layoffs of the Fuel Band development team shows the space is in a lot of flux. I am not sold on Google Glass as a broad adoption in its current form; just too intrusive except for business/industrial applications.

Another thing I am seeing in San Francisco is the wearable/fashion combo which incorporates technology into fashion aesthetics like the TshirtOS or tech-enabled clothing. Amazon's new store will help legitimize the space and given it is virtual, not a huge investment on their part.

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Kenneth Leung, Director of Enterprise Industry Marketing, Avaya

I am a fan and probably a bit of an early adopter in wearable tech. I think there is a ton of potential around fitness tracking and health monitoring. There is a load of VC funding going into this area, and I think that Amazon's new store is both a recognition of the potential, and will help it somewhat along the path in becoming increasingly mainstream.

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Alexander Rink, CEO, 360pi

I'm not sure if there has yet to be developed a "must have" piece of wearable technology except by those early adopters who must have everything "technew."

To that point, Jing Daily, a Beijing based luxury trend newsletter just published their view of China's consumer trends for 2014. Number One on the list stated, "They (Chinese consumers) are becoming more obsessed with technology. The 'geek movement' has become mainstream in China, prompting a fascination with high-tech
devices such as wearable tech. A survey finds that 31 percent of consumers say they are high-tech trendsetters, a number that's up 35 percent since 2010." Western tech companies need to address this market.

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Jerry Gelsomino, Principal, FutureBest

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