Retailers Find New Marketing Opportunities with Wearables

This post is the latest in our “Connected Consumer” series. It’s our editorial focus for the month of December, including topics like personal assistant apps, smart speakers, IoT and wearables. See the rest of the series here. 

Wearable devices are getting smarter, prices are going down, and 5G is streamlining processes in ways that weren’t possible a year ago. As the year winds down, and retailers prepare their strategies for 2020, the spotlight is shining on hyper-connected products and the opportunities those products could provide for marketers.

“Connected homes, wearables, and IoT are pretty young technologies that little by little are taking over the consumer market,” says Franco Zaro, director of IoT business development at Valid, a technology provider that develops solutions in payment, mobile, digital marketing, and data.

Technology improvements that are making wearable devices more functional are driving consumer adoption, but a different force is driving adoption among retailers.

A recent announcement that Amazon, Apple, Google, and the Zigbee Alliance are working on an open-source network standard is likely to lead to even more investment in connected devices among retailers. The open-source network that the group is working to develop is supposed to make life easier for IoT hardware vendors and software developers, but it also serves a secondary purpose of assuring retailers investing in connected technology that their budgets aren’t being wasted. With a common IoT communication and control standard, smart devices will be even more reliable and seamless to use in the coming years.

“Open source will bring businesses more agility and enable them to process data quickly while simultaneously producing valuable insights,” says Heikki Nousiainen, chief technology officer at Aiven, a firm that develops managed cloud service hosting for software infrastructure services.

News that the “big three” of smart home devices—Amazon, Apple, and Google—are working on an open-source network standard for IoT isn’t the only change driving adoption of connected technology within the retail marketing space. Valid’s Zaro says 5G will make 2020 the beginning of “the end of the world as we know it” for smart devices.

“Every day we will have access to a hyper-connectivity provided with speed and capacity never experienced before. It will give any sensor, vehicle, structure, camera, and basically any kind of device or wearable the ability to provide a number of features,” says Zaro.

5G’s Impact on Wearables

5G technology is already gaining momentum thanks to initial network rollouts this year. As of the third quarter of 2019, there were 4 million 5G connections globally. That’s an increase of 166% over the second quarter.

If widespread 5G can streamline mobile payments, which many expect it to do, that will be a game changer for wearable technology in retail marketing. Already, the popularity of mobile payments is helping to drive adoption of wearables by shoppers. Mobile payments are one of the Apple Watch’s most popular features.

Influencing Indoor Tech

Trends in consumer habits and device usage—for example, whether consumers carry smart watches around with them in addition to smartphones—impact the way retailers can utilize other technologies. The consumer shift toward wearing smartwatches has been a game changer.

Although retailers have been using data to understand foot traffic and flow for years, smartphones haven’t traditionally had enough Bluetooth adoption to make beacon technology broadly applicable. Consumers had to jump through too many hoops to turn on location services on their smartphones, allow individual apps to access their location, and enable Bluetooth, explains Matthew Russo, chief operating officer at the marketing and advertising automation platform Gimbal.

“Today, as wearables like watches and earbuds become the default, so do many of the settings that allow indoor tech to function better,” Russo says.

Reducing friction is one of the main goals that Gimbal and other companies in the location space are working to combat. Not only does reducing friction make it easier for retailers to learn from the behaviors of their customers, it also makes it easier for those same customers to take advantage of the benefits that come with using connected devices inside physical stores.

Right now, many retailers are watching to see how wearables will impact the point of sale in 2020, and how their employees might be able to provide better customer service by wearing connected devices like headsets and watches. Companies like Epson and Go Instore are already making connected glasses and headsets that in-store associates can wear to engage shoppers. Retailers are also beginning to instruct store employees to use connected, wearable cameras as a way to improve workplace safety and prevent theft.

Enhancing Existing Loyalty Programs

Wearables also stand to make existing loyalty programs more powerful. At Magnolia CMS, Chief Marketing Officer Rasmus Skjoldan is seeing a trend towards allowing artificial intelligence (AI) to influence audiences and experiences. Using AI, brands can better understand what sort of customers are visiting their digital channels, and they can pair the right content to match. The more businesses can keep track of past purchases, personal preferences and behavior, such as when a certain customer is most likely to buy, the better they can eventually serve offers to customers’ smartwatches and other connected devices.

“This will also trigger buying impulses or solidify known buying patterns,” Skjoldan says.

One factor that stands to impact how quickly brands will adapt to changing trends in the wearables market, as well as consumer preferences for connected devices, is their ability to scale. In the digital age, retailers have to start adopting technologies that can scale to save time, money, and man power, says Jeff Saenger, vice president of customer success at the digital customer service platform Helpshift. Saenger says that above all else, brands should be tracking the shifting consumer attitudes towards convenience.

“Convenience became the new paradigm for consumers because the devices enabling them to buy had become like an appendage,” Saenger says. “So not only do consumers expect greater convenience in terms of how and when they shop, but they also expect the same convenience when it comes to support.”

Stephanie Miles is a senior editor at Street Fight.