June of 2015 and Fitbit, founded in 2007, finds itself not so much at a crossroads or the precipice, but atop a mountain peak. Having just went public with a $6 billion valuation, the company’s founders James Park and Eric Friedman now must avoid the mistakes of other ‘first to market’ products, fend off 2nd wave rivals, and keep consumers excited about the future of the brand. This is a decidedly difficult challenge that will require no small amount of technical innovation, but also a deep understanding of changing consumer behavior, cultural trends and internal issues.
Taking on Challengers
Fitbit will face challenges on the high end from the Apple Watch, and downmarket from brands like the Chinese brand, Xiaomi, whose Mi Band has a US retail price of $14.99. We’re going to see some serious market segmentation and here’s where it’s critical for the Fitbit brand to do some heavy lifting. If the wearable fitness tracking market gets commodified, Fitbit will be in trouble. They have to make it about something more than just a computer on your wrist. Their latest ad does that well I think:
It’s not about the features, it’s about how the product changes your life. The question is going to be, how big a segment can Fitbit carve out. They probably won’t get the hardcore athletes, who will gravitate towards products made by adidas, Under Armour or whatever Nike ends up doing. Trendsetters (chasers?) with money will go for Apple and people who are wearable tech-curious may go for a cheap entry-level brand. But there are a huge number of people like those in the ad. People who are just trying to stay healthy and live an active lifestyle. Disclosure: I would put myself in that category and yes, as a matter of fact, I do own a Fitbit device.
Avoiding the Icebergs
As Brandchannel notes:
To some observers, Fitbit’s position now is reminiscent of where BlackBerry was just a decade ago: “Like Fitbit, BlackBerry was the established market leader with a ubiquitous gadget and a lower-priced alternative to Apple’s shiny new iPhone,” explains Business Insider. But now BlackBerry is barely viable in any form. Could the same sort of fate befall Fitbit?
It’s a good question, and one I’m sure Friedman and Park are asking themselves. There’s no shortage of analyses on what went wrong with Blackberry, but in the end, it comes down to adaptability. How will Fitbit evolve to both stay ahead of the competition and will the leadership be able to stay united in plotting a new course for the company, something Blackberry struggled to do effectively?
A Faster Horse
Visiongain has assessed that the value of the global wearables technology market in 2015 will reach $16.1bn. Predicting too far in the future about a new technology can be dangerous. Perhaps the dark side of wearable tech will turn people off, but it’s quite likely that number in the foreseeable future the number of people buying these types of products will only rise. As more consumers enter the marketplace, it will be tempting for brands like Fitbit to incorporate more features into their products. Focus groups will tell them, “Yes, that sounds like something I would totally use!” when asked about adding something to the product or platform.
Fitbit needs to take a cue from Apple here. Nobody was screaming for the iPod, iPhone or iPad before they were introduced, but they become products that consumers instantly understood they needed. Fitbit would be wise to hire someone like Grant McCracken to help them understand culture and their potential place in it. In fact, Grant has written about Fitbit previously:
…Fitbit is designed to capture data generated by any activity. But notice the tone, the reckless, frenetic charm of this spot. It’s not about anyone’s ego. There are no beautiful people here. No celebrities. It’s a “Here Comes Everybody” exercise, to use Shirky’s phrase. There are a variety of deep cultural reasons why diversity is so important when crafting cultural meanings.
They business world is littered with brands that caught the cultural zeitgeist, briefly, before slipping away. Do you still own a pair of Crocs? Staying fluid enough to move with culture and consumers is a difficult thing, but critical for brands like Fitbit.