Publishing Get Ready! The “Wearable Consolidation” Is Coming

I’d like to interrupt my regularly scheduled column to share with you some thoughts on the future of publishing. While we just made it through the beginning of the digital publishing ecosystem, that ecosystem is about to get rocked as wearables enter the market.

As a recent wearable technology marketer and entrepreneur, I’ve had a front-row seat to the business of launching a brand into the “hot” market over the past six months. So it was with a somewhat “told you so” attitude that I read about Nike’s exit from the wearable technology business. There is arguably no better marketing company on the planet. But for once in its corporate life, Nike didn’t have the product. Without the right product, the best marketing won’t win. Good marketing lesson there.

If you didn’t see it, Nike whacked its 70-person Fuel Band design, marketing, and sales division last week. It’s not something a Fortune 500 company does without a Plan B. That Plan B, according to sources, is a partnership with Apple, who will enter the wearable tech category most likely by the end of summer. Brands in the wearable business don’t have to worry as much about their business proposition because the market is skyrocketing. Brands do need to worry about defining their audience and then providing value. Nike’s Fuel Band could have done very well for one more year. It had the obvious business proposition (track your performance), and it had the audience (athletes pro and casual).

Then it would have faced the manufacturing, design, and marketing issues that face every company in the hardware business. Play fast, play hard, and maybe keep some money – tough game. A year from now, Samsung will have third-generation wearable tech on the market, Jawbone will take more steps to own the fashionable part of the business, and Apple will have launched a watch that does everything a Fuel Band can do. I think Nike took a look at the schedule and saw a few teams it couldn’t beat. And if you can’t beat ’em…

I agree with the pundits that predict another Nike and Apple alliance. It has worked with Nike + Fit. Note that in that case, Nike provided the interface and the sneakers. That’s what will happen here. Digital hardware is a very tough business. Retail is in flux and I actually think you will see wearable specialty store by the time 2014 is up. Nike would have to reinvent an entire division to play here, and Nike belongs in the wearable tech hardware business about as much as Apple belongs in the sneaker business.

For brand marketers, the wearable category has been proof positive that product is still the king. As more medical, fashion, fitness, and even gesture-based wearable products roll out, product will lead marketing, instead of marketing leading product. Examples: In the mobile device category, you could argue that the customer is won and lost on marketing right now. The products are almost even up in terms of quality (RIM excluded). But for wearables, the customer is very much in “show me” mode. No product failure will be forgiven. Marketing missteps can always be addressed with the next campaign.

Nike’s exit says a lot about Nike. It doesn’t mean the wearable business is any less lucrative. I expect Nike will get back to what it does best, and that’s marketing. Its marketing and the right hardware partner will be fuel to this business. I also think this is just the beginning of the wearables consolidation – and publishers will have a big role in wearables in the near future.

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