Fitbit’s Future In Commerce

The Fitbit Ionic, released last fall, was a departure from the Fitbit brand the world had known thus far. The original Fitbit was pitched to the world as a mostly single-purpose wearable designed to help users get in shape — the $29 fitness-focused alternative to the much more expensive (but more multifunctional) smartwatch.

The release of the Ionic was widely heralded as Fitbit’s first “true smartwatch,” built to support third-party mobile apps, with expanded functionality, greater access to fitness-related content and even payments capabilities through Fitbit Pay.

The expansion was a logical next step in furthering Fitbit’s core mission of enabling healthy lifestyles and broader strategic goals — including commerce, Lindsay Cook, Fitbit’s head of Devices told PYMNTS shortly before the launch of Fitbit Pay on the Ionic in October of last year.

“We’re giving consumers the opportunity to go to a gym, grab a bottle of water or grab a smoothie and be able to leave and use the Fitbit Ionic [to pay] without having to carry their smartphone,” Cook noted. “It adds a whole other level of convenience that will change the experience and gives us the opportunity to grow on traction in places where mobile payments haven’t seen as much opportunity.”

The Fitbit, particularly in its latest incarnation in the Ionic, aims to broaden its reach past a fitness management tool to become a general “lifestyle enablement wearable for [their] expanding base of customers.”

But will Fitbit be able to get those customers onboard? That remains a work in progress.

Unlocking a Valuable Customer Set

The Ionic had a bit of a rough start. Initial reports suggested that sales had been somewhat below par. In mid-December, media outlets reported that analysts found the Ionic had failed to wow consumers — who balked at the $300-plus price tag that came along with it.

“Consumers have yet to find a reason to justify the cost of a smartwatch, which can sometimes cost as much as a smartphone,” said eMarketer Forecasting Analyst Cindy Liu in a report highlighting the results. “Smart speakers [are expected] to be the gift of choice for many tech enthusiasts, because of their lower price points.”

But Fitbit persisted, even with a rocky entry into the market and somewhat lackluster reception by consumers at large.

Wearables as a category have struggled to ignite despite years of enthusiastic predictions to the contrary and sizable investments and enthusiasm from prominent technology players.

That enthusiasm is not hard to understand. The Visa/PYMNTS How We Will Pay study, published June 2017, reports that the average wearable customer also happens to be a big spender.

To paraphrase Shakespeare: Though they be but little, they are fierce shoppers. And they punch well above their weight in several important categories.

Consumers who own wearables own more devices than those who don’t, with 5.5 connected devices owned versus 3.2 devices across the two groups. They’re also more likely to shop online and convert more often when they do. They also spend more money and are more likely to use digital channels to pay. Some 28.5 percent of wearable owners report never using cash — as opposed to 23.5 percent of non-wearable owners.

And, most notably, wearable owners as a group are more likely to adopt new technology because they’re keen on better, more digitally enabled, commerce experiences on the whole. A full 60 percent of respondents polled reported that the friction involved in shopping, either online or in-store, has rendered the experience unproductive, unpleasant and inefficient; 66 percent of respondents said they would be willing to use a connected device to shop if it could bring them a more frictionless shopping experience and 85 percent noted reducing friction at the point of sale was a key reason to pay via a connected device.

Consumers who, so far, have not rushed out in droves to purchase a wearable have demonstrated that they’re very much ready for an upgraded and less friction-filled commerce experience. They’re ready to give wearables a chance if they can do two things: Make commerce run more smoothly on the front end and make sure that that speed and efficiency doesn’t come at the price of security on the back end.

Building to the New Expectation

Fitbit, with a firmly established reputation among its customers as a fitness product, believes it has a stable platform from which to launch wearables that offer more complete services to their customers.

“Ionic has received strong, positive reviews regarding its leading health and fitness-focused features, long battery life, platform compatibility and more,” noted Fitbit’s Jon Oakes, VP of Product, in a Dec. 2017 press release about its expansion of third-party app offerings that included support for Yelp, Nest (the connected home company), The New York Times, TripAdvisor, Uber and United Airlines, among a few dozen others. Fitbit also announced mobile apps for British Airways, Lyft and Walgreens, which are slated for early an 2018 release.

To further support that aim, Fitbit has recently announced the launch of Fitbit Labs, a research project targeting the next generation of “apps that will uniquely enhance the wearable experience.”

Are consumers ready for that enhancement? Smart speakers, according PYMNTS/Visa data, have already caught up with wearables’ adoption rate by 2017 — despite two fewer years in the market.

But fully commerce-enabled, smoothly operating smartwatches that are actually smart? Those are still a work in progress with a new set of features on the horizon.

Given the average wearable consumer’s tendency to punch above their commerce weight class, Fitbit is committed to staying in that features race until the end.