Golden age of Fitbit is ending, marketers need to adapt
By Brielle Jaekel
February 15, 2017
Fitness wearable manufacturer Fitbit is planning to lay off 6 percent of its staff after a dramatically disappointing holiday quarter, while the Apple Watch saw its best sales quarter, meaning marketers who cater to wearables need to adjust their strategies.
While Fitbit had originally cornered a market previously untapped and dominated the landscape for a strong duration, its dominance is losing its grip. Marketers should be aware that smartwatches such as the Apple Watch are learning to bridge the gap between fitness and function, which could mean a powerful long-term future for fitness-lead smartwatches.
Marketers need to be aware that the golden age of Fitbit is coming to an end, said Neil Mawston
executive director at Strategy Analytics
. Fitnessbands remain popular, but there is a fresh push to promote fitness-led or health-optimized smartwatches in 2017 and that is where the longterm future lies for wearables.
There will be 1 billion wristwatches sold worldwide in 2017 and smartwatches are gunning for a slice of that pie, he said.
Fitnessbands such as Fitbit are becoming less popular now that companies such as Apple are leaning how to build a powerful fitness experience with a device that is designed to accomplish even more. While yes, Fitbit has provided the capability to receive text messages and more, Apples second generation Apple Watch features a sportier design and a waterproof body. Apple Watch image, courtesy of Apple
The Apple Watch saw its best sales the same quarter that Fitbit saw its worst. However, Fitbit chief executive James Park believes this is only a temporary slow down.
Fitbits company structure will reorganize to gain better control in the new market. A few experts agree that its niche branding will help carry it through this time, and that its low cost will keep its appeal with the average consumer.
Fitbit Blaze, courtesy of Fitbit
However, for marketers and retailers, the Apple Watch has the ability to drive in-app sales. Especially after Apples App Store also had its highest performance this past quarter.
Apple vs Fitbit
Apples Q1 2017 was its highest revenue quarter ever, seeing record-breaking sales through its App Store, as well as Apple Pay transaction volume up 500 percent year over year.
During the tech giants earnings call for the first quarter of the 2017 fiscal year, Apple announced it had an unparalleled quarter during the holiday season with sales from products such as Apple Watches, iPhones and Macs, paired with strong purchases on the App Store and in service. After a disappointing few quarters, this was a big season for Apple and its results are indicative of a further shift in consumer behavior such as a bigger interest in wearables (see more
As the Fitbit ecosystem opens up to more app partners in the future this will become more diffuse, potentially making these apps more appealing as targets for either ads or data gathering, said James Moar, senior analyst at Juniper Research
. However, in terms of more easily converted users, the iOS ecosystem will remain a space that is more likely to have higher rates of in-app sell-through, even though the user base is smaller.
Fitbit is focused on quite an obvious use case, and has a better price for the casual user, he said. The Apple Watchs benefits beyond fitness tracking are less certain, which Apple has how realised with its pivot towards fitness and wellbeing with WatchOS 2 and the Apple Watch Nike+.