An Analysis of the Yoga-specific Smart Clothing Sector and Short-term Product Development Recommendations

 The Nadi X Activated Yoga Apparel by Wearable X

An Analysis of the Yoga-specific Smart Clothing Sector and Short-term Product Development Recommendations For the Nadi X

Table of Contents

1. Abstract

2. Introduction

3. The UK Market

3.2 Overview

3.2 Market size

3.3 Competitors

4. External Environment

4.1 Two key (PESTEL) factors

4.1.1 Social

4.1.2 Technological

4.2 Two key external threats

4.2.1 Competition

4.2.2 Styling

5. Recommendations for Improvement to the Nadi X

5.1.1 Style

5.1.2 Enhanced technology

6. Appendices

A. Customer-Based Marketing Research

A.1 Purpose of this Research

A.2 Research Question

A.3 Data Types

A.4 Method used to generate Data

A.5 How the data will be analysed?

B. Wearable technology market

7. References

This report looks at a hi-tech wearable (leggings) product called Nadi X produced by Wearable X and aimed at yoga practitioners.

The purpose of the report is to analyse the product, market and competitors and offer two recommendations to Wearable X that would be incremental in nature and could be implemented in the short-term product development cycle in 2020/21.

The size of the hi-tech clothing market still lags behind significantly over other more established wearable segments such as smartwatches, but its projected growth, both in the UK and globally, is expected to accelerate. Companies that want to succeed in this market need to have a strong offering in line with customer needs and preferences.

The Nadi X product is aimed primarily at women and research shows that 70% of women want activewear that is stylish and fashionable (Rogers, 2016).

Also, two key threats to the product were also identified and analysed, which are firstly new entrants eroding the market share of existing players like Wearable X for smart clothing and secondly its lack of appeal to more fashion-conscious consumers.

Based on the competitive analysis presented, the two recommendations are:

The company should produce a wider range of colours and styles to cater for the fashion-conscious customer who believes form, functionality and technology in wearables should not compromise fashionable styling.

The company should expand the technological capability of its product by offering smartwatch integration for its proprietary ‘Pulse’ technology system. This would offer additional convenience and benefit allowing users to monitor their progress and adjust setting more easily during their yoga routine.

The report also includes a proposal for customer-based marketing research to provide quantitative data to support the proposed recommendation of smartwatch integration, which could be developed and produced within the anticipated product development cycle timeframe in 2020/21.

The Nadi X is a hi-tech clothing (leggings) product targeting the yoga segment of the wearables market. It uses proprietary ‘Pulse’ technology and embedded sensors, connected to a smartphone, that guide the user to correctly perform movements and routines. The product is manufactured by fashion tech company Wearable X and retails for $249. Nadi X is available for men and women that comes in a limited range of colours and styles but from a technology perspective, it is a single product.

The purpose of this report is to make two recommendations of improvement for the Nadi X product, which could be implemented in its next product upgrade cycle in 2020-21.

One of the main benefits of the Nadi X is the personalised technology that is associated with the product, which can be used for yoga workouts. The Pulse technology, along with the embedded sensors, can be used to teach yoga routines for individuals who wish to perform the positions correctly for maximum benefit. The Pulse technology device, connected to a smartphone via Bluetooth, is attached to the yoga leggings. The Pulse sends vibrations, as well as audio signals, to help guide the user in reaching the correct positions for a more effective workout, based on the workout preference settings of the user. This personalised training using technology can be considered a real and practical alternative to training with a yoga instructor.

The battery life of the Pulse device is sufficient to ensure that the user does not need to constantly recharge the device during their workout. This will allow the user to focus on their workouts, without facing any unnecessary distractions that would interrupt their exercise routine.

Also, the Nadi X uses Bluetooth Low Energy signal to connect to the user’s smartphone. Using Bluetooth Low Energy is more energy efficient than using standard Bluetooth, due to its lower power consumption. (Davidson et al., 2014).

In addition, the Nadi X is designed to allow for a gentle wash and tumble dry without causing damage to the embedded sensors.

In terms of the products design details, the yoga leggings are flat seamed, which are less likely to pull apart during exercise, enabling the yoga leggings to last longer (Courage My Love, 2019). The Nadi X also uses four way stretch fabric, which stretches in both crosswise and lengthwise direction, instead of in just one direction (Galvin, 2018). This would allow for maximum ease of use and comfort during the user’s workout.

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The Level 1 Compression Rated Leggings also provide the lower body with an equally distributed mild compression, with just enough “squeeze” to give the user’s lower limbs enough support to help protect leg muscles during activity. It also offers additional benefits, by aiding moisture management and accelerating blood flow, to help generate or eradicate heat depending on the fabric, as well as to eradicate chaffing during activity. (Baselayer, 2019).

The main benefits the customer currently derives from using the product are summarised in the table below:

Table 1: Nadi X Features versus Benefits

Features

Benefits

Personalised Pulse technology.

Can help teach correct yoga movements without an instructor.

Less need to recharging device during exercise.

More Energy efficient.

Reduced power consumption.

Prevent sensors from damage when dried.

Leggings less likely to pull apart.

Additional comfort as leggings stretch crosswise and lengthwise.

Protect leg muscles during activity.

Aid moisture management.

Eradicates chaffing.

Increased heat loss.

3.1 Overview

The fitness industry is growing in popularity as consumers become increasingly more health conscious. In the UK, the size of the private health and fitness market, in terms of the number of fitness club members, is an estimated 5.8 million in 2018. By 2020, it is likely to reach 6 million (Fashion meets fitness, 2018).

Nearly 4 in 10 people are interested in using wearable technology for health and fitness monitoring, making it the most popular use. Wearable technology is being applied to a wide range of segments, such as jewellery, clothing, glasses, and headphones (Wearable Technology-UK, 2018).

The most preferred wearable technology in the UK are currently smartwatches. The highest smartwatch penetration of 21% is among 25-34-year-olds. This demographic will likely have more disposable income to spend on technology products and place additional focus on health and fitness as they get older (Wearable Technology-UK, 2018).

In contrast, however, smart clothing is a primitive technology, but there is potential for further growth in this sector. In a recent survey of 2,000 internet users ages 16+, 9% intended to purchase smart clothing in the next 12 months (Wearable Technology-UK, 2018).

3.2 Market size

There are no specific figures available for the UK market alone, however, the estimated market size for the UK smart clothing market was calculated for 2019 at around £82m (see Appendix A). This was done by using figures for the value of the global smart fabrics market at $1.72 billion in 2017, and its expectation to reach $4.08 billion by 2023 at a Compound Annual Growth Rate of 19.01% from 2018-2023. The current USD to GPB exchange rate was also used to convert the value for the UK market from US dollars into pounds sterling.

3.3 Competitors

The Nadi X a niche and innovative product aimed solely at the yoga market.

Although there are other products offering leggings with sensors that offer personalised health and fitness data, they do not offer a system that helps yoga practitioners perform postures correctly as part of carefully planned yoga routines, without the need for an instructor.

General (non-yoga specific) high-tech leggings are offered by sports brand, Athos, which includes the Women’s 2.0 Leggings w/Core. This product offers a range of benefits, such as real-time biometric tracking of muscle activity, heart rate, calorie expenditure and active time versus rest time. It also has sensors in the garment to detect which muscles ae being fired and how much they’re being exerted, as well as fabric comfortability contours that are constructed with sweat removing technology (Athos, 2019).

Another indirect competitor is LikeAGlove, which sells Smart Leggings. Not only can these leggings be used for fitness, but they can also be used, via Bluetooth, to filter clothing options down to those that are available in the wearer’s size, making online clothes shopping easier (Langridge and Edwards, 2017).

The products listed above general smart leggings offering health and fitness data but are not a direct substitute product to the Nadi X.

In fact, the real competitor to the Nadi X product is plain non-tech yoga leggings.  Customers buying yoga leggings therefore have to decide between relatively cheap, plain leggings or a premier and relatively expensive hi-tech product like the Nadi X. One of the benefits of general yoga leggings include lower costs in comparison to Smart Leggings. As well as this, they also offer other benefits such as comfort, a wide rage of colours and designs and that they can be worn casually as well as in the gym.

Table 2: Competitors

Competitors

Product

Benefits

Athos (indirect competitor)

Women’s 2.0 Leggings w/Core

Real time biometric tracking technology

Sensors detecting muscle activity

Sweat removing technology in fabric contours

LikeAGlove (indirect competitor)

Can be customised to wearer size using Bluetooth technology

General yoga legging manufacturers (direct competitor)

Plain (non-tech) yoga leggings

Low cost

Comfortable

Huge range of colours and styles

Can be worn casually as well as in the gym

 

In this section, we consider two key factors and threats from the external environment that are likely to have an impact on Wearable X in the next three years:

4.1  Two key (PESTEL) factors

4.1.1        Social

Whilst the smart clothing market is currently considered to be latent, it is expected to grow by 76.6% from 2016 to 2021. This is the highest Compound Annual Growth Rate in the wearables market. The market share for this segment is also expected to reach 10% during this time (Mikhalchuk, 2017). The growth of health and fitness, together with wearable tech, is driving growth in this sector. It is driven by people’s aspirations to live healthier lifestyles.

Within the health and fitness sector, yoga is experiencing strong growth.  Its popularity is underpinned by the emergence of the ‘wellness and mindfulness’ trend that encourages a wholistic approach to health and wellbeing.  Health, fitness, diet and meditation are all part of this social trend and yoga uniquely offers aspects of both wellness and mindfulness to people of any age group and any fitness level.

4.1.2        Technological

Smart clothing is predicted to carry out a wide range of functions in various fields, such as health and fitness, making them extremely attractive choices of products for consumers to have. For example, wearables with biosensing technology can give consumers access to information that was previously only available at the doctor’s office (Safian-Demers, 2018).

Also, more companies are ready to invest in this segment of the market, thanks to the huge amount of data which smart clothes can supply (Koslova, 2017). Recently new smart clothing products have been created, such as Smart socks, which can help improve running technique, and smart bras, which can check your heart rate and stress levels throughout the day (Quid, 2018).

New technologies are already being designed and implemented in smart clothing, such as self-cleaning clothes and clothes which can measure your heart rate.

4.2  Two key external threats

4.2.1        Competition

Despite the promising statistics, however, the smart clothing market faces stiff competition from new entrants coning into the wearables market. This could potentially erode some of the market share for smart clothing. For example, recently Apple has been reportedly working on an Apple Watch-compatible insulin pump to monitor blood sugar levels, while Google has been working on smartwatch and smart contact lens technology for medical usage (Quid, 2018). These types of products can offer similar benefits to smart clothing at cheaper prices and so are likely to provide stiff competition for this market.

4.2.2 Styling

According to a Nielsen report, although the technology for smart clothing is very sophisticated, approximately 53% of ultimate customers considered that it lacks style. Some garments remain bulky and look too technological, as well as unfashionable (Mikhalchuk, 2017.

Ideally, smart clothing should not be associated with electronics, but just with the apparel and this is extremely important for products in which the target audience is women (Koslova, 2017). The factors driving women to buy activewear are geared towards improving their health and fitness, combined with a desire to update their outfits. Verdict data shows almost 70% of women want activewear that is fashionable and stylish, whereas men are more interested in technical attributes (Rogers, 2016).

Based on the analysis of this report, the two recommendations for improvements to the Nadi X for its next product upgrade are as follows:

5.1.1        Style

Wearable X should introduce additional colours and designs for the Nadi X range from the existing Navy Grey, Midnight and Black & White options.

In this report, it was discussed that one of the main drawbacks to consumers was that smart clothing is generally considered to be unfashionable and that fashionable clothing is important to women (the primary purchasers of Nadi X). As women can have different preferences regarding which colour and design they would prefer for their yoga leggings, it would be a good idea for Wearable X to enable its consumers to customise their product from a wider range of choices. This will help to satisfy a wider variety of consumer tastes.

5.1.2        Enhanced technology

The company should expand the technological capability of its product by offering smartwatch integration for its proprietary ‘Pulse’ technology system.

Smartwatches are able to offer lifestyle apps and data and are particularly appealing to people wishing to monitor and improve their health and fitness.

This smartwatch application for Nadi X would offer additional convenience and benefit allowing users to monitor their progress and adjust setting more easily during the yoga routine.

From conducting this analysis, Table 3 below shows the primary benefits expected from each recommendation.

Table 3: Recommendations

Proposed Recommendations

 Expected Benefits

More colours and stylish designs

Increase attractiveness to female consumers

Enhance stylishness of product

Smartwatch application for ‘Pulse’ technology

Convenience of following routine via a smartwatch

Easier to use during difficult or challenging yoga positions and routines

 

A.1 Purpose of this Research

The purpose of this research is to gain a better understanding of the relative importance and perceived value of adding a smartwatch application for the Nadi X product.

Based on this research, Wearable X can ensure that product development is in line with the preferences and buying decisions of its target market.

For Wearable X this is important, as being a relatively small firm, it needs to be able to manage its costs by focusing product development on the most important benefits as perceived by customers.

 

A.2 Research Question

Would the buying decision of customers, weighing up the pros and cons of buying cheap low-tech yoga leggings versus the expensive hi-tech Nadi X product, be affected by the addition of the smartwatch app?

 

A.3 Data Types

The following quantitative data should be obtained to help answer the research question:

Proportion of respondents that own/intend to buy a smartwatch.

Addition of smartwatch application ranked in order of desirability and benefit.

Proportion of existing yoga practitioners that buy ordinary yoga leggings but prepared to upgrade to the Nadi X product.

Proportion of potential customers prepared to buy Nadi X at the current retail price point of $249 with/without the benefit of the additional smartwatch application.

A.4 Method used to generate Data

Questionnaires with an appropriate scoring system should be used, as they are a common and fairly simple way to collect data. Also, they are less time consuming than interviews or other in-person quantitative research methods.

Questionnaires are also a cost-effective option which is important for a small company like Wearable X, with limited budgets.

To make the research feedback as reliable and useful as possible, it would be necessary to screen the participants according to following criteria:

ABC1 socio-economic group. The Nadi X product is relatively expensive and likely to appeal only to relatively affluent people.

Yoga practitioners. The product is specific to yoga and people not interested in yoga are unlikely to provide useful feedback.

Activity levels. People who actively exercise either at home or in a gym are far more likely to buy the product.

The company can send questionnaires to its existing customers via email. As the company sells its products online via its dedicated website, it will likely have the email address of every customer.

The advantage of this approach can be summarised as follows:

Targets people who have actually bought the product and therefore more likely to respond to the company’s request for feedback.

Customers have actually used the product so have a view on its pros and cons.

Online surveys can be relatively quick and cost-effective.

The disadvantage of this approach is that participants are self-selecting and may not provide a representative sample.

In addition, the Company should also survey non/potential customers (based on the criteria listed in Appendix A4 above) to assess the attractiveness of the product both with and without the addition of the proposed smartwatch app.

It should be noted that to carry out a successful online survey, it may be necessary to offer incentives for participants to complete the questionnaire, such as competitions to win products or discount coupons on new merchandise etc. Such incentives should encourage more people to complete the survey.

A.5 How the data will be analysed?

As the purpose of the research is to show the relationships between multiple variables to generalise the results and make predictions about the wider market, an inferential type of analysis needs to be performed.

Correlation is a type of inferential analysis that can be used to identify the relationship between multiple variables (Filzmoser and Hron, 2008). In this case, the correlation can be measured between the consumer ‘buying decision’ and the various technological and pricing variables that potentially influence that decision.

 Various correlations can be determined from the data including:

Differences by customer gender.

Differences by age group, as preferences for smartwatches can potentially vary for different age groups.

Differences by owners of smartwatches versus non-owners.

The global smart fabrics market was valued at USD 1.72 billion in 2017, and is expected to reach USD 4.08 billion by 2023, at a Compound Annual Growth Rate of 19.01% over the forecast period from 2018-2023 (Mordor Intelligence, 2018).

To calculate the predicted value of the smart fabrics market in 2019 ($2,436,101,377), the following calculations were done:

Value for 2018: (19.01% x 1,720,000,000) + 1,720,000,000 = $2,046,972,000

Value for 2019: (19.01% x 2,046,972,000) + 2,046,972,000 = $2,436,101,377

The current world population as of April 2019 is 7.7 Billion (Worldometers, 2019). 80% of the world’s population also lives on less than ten US dollars a day (Callahan, 2018) and so would not be target consumers for smart wearables. So, from carrying out further calculations, we found that 1,540,000,000 live on more than this amount.

7,700,000,000 x 20% = 1,540,000,000

The total size of the UK population as of 2019 is 66.96 million (Worldometers, 2019). To calculate an estimate of the size of the UK wearable technology market, we can perform the calculation as follows:

(2,436,101,377/1,540,000,000) x 66,960,000 = $107,096,927.4

To covert the value of the smart clothing market in the UK from dollars into the pounds, we use the current exchange rate where 1 USD = 0.77 UK pounds sterling.

Therefore, the value of the smart clothing market in the UK in pounds sterling is;

107,096,927.4 x 0.77 = £82,464,634.1 ≈ £82,500,000

As no data was available that specifically estimated the UK market size for wearable technology, the figure given above is a simplistic estimate, as at this point in time, such products are not spread evenly amongst the world’s population but more concentrated in developed, western economies.

 

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