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01 AUG. 2018

The Rise of Smartwatches: What Does This Mean for Traditional Analog Watches

Nicole Tan

Brand Strategy Team, Singapore

People are looking at their watches for more than the time. The introduction of the smartwatch, with its multi-functional features, has disrupted the traditional analog watch industry. This is exemplified by the drastic decline in sales for the Swiss watch industry in many Asian countries, representing the shift of the consumers’ demands in the Asian watch industry towards more affordable timepieces like smartwatches.

Social Listening: Wearable Smartwatches on the Rise

Comparison of Numbers of Mentions of Smart Watch & Analog Watch on Social Media (Source: Labbrand Social Listening Study - Smartwatches)

Consumers’ posts on the comparison between analog watches and smartwatches

Through social listening, we were able to obtain real-time information by monitoring the relevant conversations, experiences and key associations a brand has with the consumers over a variety of social platforms. Over the past year, smartwatches garnered 27.5k of discussion volume, compared to Analog watches with 4.95k across various online social and media platforms in South-East Asia (SEA) countries. Some of the trending keywords for watches in SEA were prevailing words such as “smartwatch”, “technology” and “fitness trackers,” which are associated with key technology smartwatch players like Apple, Samsung and Fitbit. These are the brands who are transforming the global watch market with their innovations and features. As more brands debut their own tech timepiece in the market, rich features have become an important differentiation factor to consumers in their purchasing decisions.

What Features are Trending with Smartwatches

Smartwatches have many features that entice consumers and increase convenience. Narrowing down some of the widely discussed features socially, the top five were fitness solutions, playing music, GPS, syncing notification and contactless payments. Out of the top 5 attributes, the most popular discussed on social platforms were fitness solutions available, GPS and the ability to play music.

Discussion Volume among Different Features of Smartwatches (Source: Labbrand Social Listening Study - Smartwatches)

Fitness

Conversations about Fitbit and the features available

Focusing on the trend, there were 963 mentions on “#fitness” and 525 mentions on “#healthy” amongst all the online platforms. The integration of fitness and health-tracking into a smartwatch has been revolutionizing the health care system with money-saving opportunities and by improving lives. These benefits are materialised through various features - personal health logs, curated fitness workouts and sleep pattern tracking. A dominant player in the market is Fitbit. Beyond the product features and functional benefits, Fitbit capitalizes on consumers’ eagerness for recognition and their behaviour of social media sharing through the integration of gamification. With the completion of each challenge, users can earn virtual awards (badges) that recognise their achievement and encourage sharing on users' social media platforms. The gamification aspect of Fitbit health function not only increases its relevance to consumers, but also increases its brand influence and awareness when users share on the social platforms. 

Contactless Payment

Left: Hashtag list with the trending words when “Smartwatches Payment” is searched; Centre & Right: Partnerships of smart watches with Mastercard and United Overseas Bank

Consumers talking about the contactless payment positively

Despite the relatively low level of discussion volume, an interesting touchpoint for smartwatches lies in its ability to make payments. Some of the key mentions include hashtags such as #mobilepayment #contactlesspayments #securepayment. Of which, conversations about both Fit Pay and Garmin Pay, the contactless payments for the respective brand’s smartwatches, generated a total of 444 in Asia. This began trending after the recent launch of the smartwatch brands’ partnerships with banks and financial services to provide contactless payment services. A study by Visa & Fitbit Exercise and Payment Survey also shows that 59% of Singaporeans are likely to use a payment-enabled wearable device. With this feature, it removes the need to carry cash during physical activities – a key reason why consumers are warming up to contactless payment in smart watches.

Design

Negative Sentiments from consumers towards Smart Watches and the respective designs

Despite the accelerated take-off of smart watches in the current day of age, a core attribute that remains important to consumers is the style. There are little differentiation factors between smartwatches in the market with similar designs, and consumers feel that they are not aesthetically up to par with analog watches. Thus, there is an increasingly higher demand in smartwatches with better aesthetical designs.

Opportunities amidst the Grouses

Trend of social media posts from consumers talking about hybrid smartwatches

As we deep-dive into the trend for smartwatches, we observed that there is a trend of conversations about hybrid watches that neither compromise on the design of an analog watch nor functions of a smartwatch. One recent example is Fossil, who created hybrid smartwatches called Fossil Q that has over 40 different styles of analog and digital face watches. With Fossil Q, Fossil appears to be targeting the younger generation of millennials who adore the vintage authenticity of the brand but still desire to be relevant with ‘smart’ functions. 

Fossile Q (Source: Engadget)

From the SEA grounds, we see Muse, a wearables brand founded in Singapore, producing their own hybrid smartwatch to ride on the trend and demand of hybrid smartwatches in Asia. The brand was launched on Kickstarter on June 19 2018 and was fully funded within 8 hours.

Where is the Industry Heading for Asian Watch Brands and Consumers?

In conclusion, there has been an increase in the demand for smartwatches over the years in Asia as consumers want more extensive features in a watch beyond telling the time. They look for different functionalities to bring better convenience in one’s life in terms of fitness, health solutions, or just the ability to integrate their daily routine into an all-in-one device such as contactless payment on-the-go. However, consumers are also expecting these innovative features to be introduced in watches that are aesthetically design-driven. The best technology in life should not be noticeably in-your-face, but discreetly integrated into our daily life.

Although smartwatches have not fully transformed the watch landscape in Asia, the future generation of watch buyers and consumers are becoming more tech-centric. Going forward, we foresee brands becoming more innovative with their product offerings to differentiate themselves from their competitors and stand out in the saturated market. However, to build a lasting brand, industry players are required to first understand the relevance of these innovative features and what each feature means to consumers. 

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