In late 2016, the global smartwatch market experienced a near-stagnation in sales growth. Furthermore, market research institutes reported that the abandonment rate of smartwatches had hit almost 30%, primarily because of misaligned value propositions. We argue that this is because of lacking product/market-fit, and research how this can be improved – focusing on Danish early adopters.
To do this, we structured our own methodological framework and utilized recent literature on Value Proposition Design by Osterwalder et al. (2014). The research on smartwatches’ value propositions was conducted using conjoint analysis, in which we tested different attributes to examine their respective importance in relations to each other, and to create a so-called value map. To identify these attributes, we used big data analytics, extracting large datasets from smartwatch-focused discussions on Reddit using a modified webscraper. The data was then processed using text analytics software, and we identified the three most discussed attributes to be used as input into the conjoint analysis experiment. To discuss the ‘’fit’’ between value propositions and the consumer’s needs, we conducted interviews to create so-called customer profiles, a sort of clustering of different types of needs. With both a value map and customer profile, we could discuss possible improvements of product/market-fit.
The text analysis findings showed that the attributes battery, design and fitness tracking was the most mentioned in the discussions on Reddit, why these were used as input into the conjoint analysis, together with two other attributes retrieved from our desk research: price and cellular connectivity. The conjoint analysis findings showed that the top three attributes, which could explain most preference of a smartwatch over any other in Danish early adopters are in order from the top; price, battery and fitness tracking. The interview research findings showed that consumer’s needs are determined by two use cases, smartwatches as replacements or extensions of one’s smartphone. From these two use cases we created one combined customer profile.
With the complete customer profile and our value propositions we created problem/solution-fits. These problem/solution-fits showed that even in the case of the creation of a smartwatch, which should improve the product/market-fit, based on our data, it will come down to whether the individual situationally finds more value in mobility and convenience, health quantification and easy music and navigation control than they do in being entertained and having easy communication through the phone.
|Educations||MSc in Management of Innovation and Business Development, (Graduate Programme) Final ThesisMA in International Business Communication (Intercultural Marketing), (Graduate Programme) Final Thesis|
|Number of pages||153|