Creating Value for Luxury Wearables

Creating Value for Luxury Wearables

Despite a rocky start, the wearable market is now steadily growing. In fact, some have estimated that the market will increase 35% by 2019. Even with this potential growth, many have criticised wearable devices as providing poor user value.

According to Angela McIntyre, Research Director at Gartner, “dropout from device usage is a serious problem for the industry. The abandonment rate is quite high relative to the usage rate”. In a report by Gartner, it describes how wearables are often disliked for being “neither fashionable nor attractive”.

Apple has always prioritised on-trend design in the development of technological devices. This can be seen with their own wearable device, the Apple Watch. Nevertheless, other brands have miscalculated the significance of good design. For instance, while fashion designer Diane Von Furstenberg advocated Google Glass in her 2013 Spring/Summer New York Fashion Week Show, critics remarked that the device didn’t suit everyday fashion.

Style has become the biggest barrier in the wearable market, however, Carole Sabas has looked to counter this. The fashion journalist curated an exhibition in Paris that celebrated fashion-first wearable technology. The exhibition featured 10 prototypes from fashion designers. This included a self-heating jacket from Thermaltech and ACRNM and a pair of headphones disguised as earrings from Michael Schmidt Studios and Bragi.

Sabas wanted to show how wearables could be more than ‘geek chic’. As she states herself “these fashion accessories are first and foremost luxury goods, crafted as couture objects”.

The Value Proposition of Luxury Wearables

In 2015, Apple collaborated with French fashion house Hermès for a special edition luxury version of the Apple Watch.

By partnering with Hermès, a brand with a long history working with Swiss watchmakers, Apple aimed to build authority as a luxury watch provider. Furthermore, as described by Benjamin Clymer of Hodinkee, Hermès is also the leading “hyper-luxury lifestyle brand by which all others are measured”. This – along with the launch of an 18-karat gold Apple Watch – saw Apple attempting to expand its presence in the luxury market.

However, with the release of their Series 2 range the brand shifted its focus away from luxury, dropping their 18-karat gold edition completely. Instead, the brand focused its efforts on the fitness market with a new Nike collaboration.  

For many, wearables have provided measurable value in the fitness and health market. However, for the luxury industry, brands have struggled to prove the value of wearables beyond being a ‘shiny new toy’.

Many luxury figures have followed in Apple’s footsteps and in some cases driven excitement around high-end wearables. Traditional watchmakers TAG Heuer and Montblanc both recently launched smartwatches — the ‘TAG Heuer Connected’ and the ‘Montblanc Summit’. Swarovski also released a solar powered activity and sleep tracker in the form of pendants and bracelets.

Arguably more accessible brands like Michael Kors and Tory Burch have been more prone to embracing this technology. For instance, Google partnered with Levis to co-design a smart jacket that connected via Bluetooth to people smartphones. This denim jacket allows wearers to perform a series of smartphone activities without having to pull their phone out.

For Google’s Ivan Poupyrev authenticity was crucial for this project. From his point of view, “in fashion and apparel, people often think about it as the look and feel, but it’s the story and authenticity behind apparel that makes fashion, fashion”.

Wearables inherently fall within upgrade culture. As Julie Saussier of Credit Suisse states, “If you’re buying a luxury watch, the point is that you can pass it on to future generations, so you don’t want it [to become] obsolete after three years”. This is at odds with key traits like tradition and craftsmanship that are at the core of luxury brands’ DNA and story.

However, TAG Heuer have shown how you can invest in wearables whilst connecting a new market to your heritage and traditions. TAG offers a scheme to Connected watch owners where they’ll replace devices after the two-year guarantee expires with a three-handed mechanical timepiece for an additional $1,500. This tactics allows TAG to create new value in their smartwatch even when the technology has become obsolete.

For luxury brands, wearables can create a point of entry for digitally-affluent Millennials and Generation Z. Many brands already implement similar tactics to creating early connection with young consumers by releasing perfume and accessory ranges. This approach offers the opportunity to grow value outside the traditional value chain whilst still upholding the core proposition.

Final Say

Can wearables be more than just a new revenue stream?

For many designers this technology is a means for innovation and experimentation. For instance, Creative Designer and Technologist, Behnaz Farahi, has created an interactive 3D-printed wearable, in the shape of a futuristic breastplate, which reacts by lighting up whenever the wearer moves and gyrates their body. Titled Bodyscape, this project has allowed Farahi to test the use of new 3D printing technology and explore new ‘realms of fashion’.