The uncertain future of wearable tech in fashion

In a time of crisis for the fashion industry, wearable tech is capturing an increasingly large share of the market previously occupied by luxury fashion. Whether it’s due to the long-established synergy between the two, or the phenomenon's appeal among Millennials and Gen Z, the wearable tech sector seems to be experiencing a renaissance after years of uncertainty. The 2024 report Fast Moving Tech - Fast Paced Fashion highlights that Gen Z prefers spending on technology and electronic accessories compared to Millennials and Baby Boomers. This interest has spurred significant investments in wearable tech and highly favorable growth projections for the sector. According to estimates from Fortune Business Insight, wearable tech reached a value of $120.5 billion in 2023 and is expected to hit $1 trillion by 2032, with an annual growth rate of 34.6%. The reason for this success is simple: digital natives trust technology, want to wear it, and want it to match their clothing. It’s no longer enough for a smartwatch to track health data; it must also be stylish. Brands have recognised the immense profit opportunities in this sector, entering the field with increasingly creative collaborations.

Companies like Apple, Oura, Google, Qualcomm Technologies, and Garmin have long-standing collaborations with leading brands to create smartwatches, fitness trackers, virtual reality devices, and augmented reality headsets. It feels like ages since Moschino launched its french fries iPhone case in 2015. Meanwhile, Louis Vuitton has released the third generation of the Tambour Horizon Connected watch, first created in 2017 with Google and Qualcomm Technologies. In September, Hermès introduced a new collection of custom straps and dials for the Apple Watch Series 10. Around the same time, Chanel launched its Premier Sound, a watch with an 18-karat gold-coated steel chain and detachable headphones compatible with any smartphone. The Oura Ring (a smart ring that tracks metrics like sleep quality and physical activity) reached its fourth generation, following its 2022 collaboration with Gucci, solidifying the smart ring’s place in the fashion world, alongside the newly introduced Galaxy Ring by Samsung. The market for branded speakers is also expanding: in early 2024, Fendi released the portable Hi-Fi speaker Fendi x Devialet Mania; in November, Fred Perry partnered with Ruark for a limited edition of speakers; Hidden.ny designed headphones with the Danish brand AIAIAI; and Bottega Veneta introduced an AirPods Max case in its “Tech Rubber Family” line in August.

The device most favored by fashion brands seeking to collaborate with the tech world appears to be SmartGlasses. Following Mark Zuckerberg’s evident interest in fashion, Meta renewed its long-term partnership with EssilorLuxottica after the success of the Ray-Ban Meta Glasses. Initially launched in 2021 as Ray-Ban Stories, the glasses broke into the wearable market with over 700,000 units sold. As stated in an interview with Vogue Business by Rocco Basilico, chief wearables officer at EssilorLuxottica, «Ray-Ban has done a good job of making glasses a fashion object, and now [they] are trying to do the same with technology while balancing fashion and technology». In response to Meta’s SmartGlasses success, according to Bloomberg, Apple is «exploring the possibility of entering the smartglasses market with an internal study of existing products, laying the groundwork to follow Meta Platforms Inc. into this increasingly popular category».

But let’s address the core strength of wearable tech: customization. As mentioned, fashion is in crisis, seeking any means to recover from a series of negative trends. Trump’s victory shook the cryptocurrency market—which was thought to be dead or at least stagnant—triggering a domino effect that revived fashion's interest in the Metaverse and NFTs. While not new, phygital shows and NFT garments had already been explored pre- and mid-pandemic, but now they’re gaining serious traction. Since November 25, Guerlain has made NFTs available on the Web3 platform The Sandbox, continuing its “The World is Our Garden” experience focused on sustainability and biodiversity awareness. Balenciaga partnered with Ledger, a cryptocurrency wallet producer, for a logo-embossed leather case with NFC chip available since early November.

A significant challenge for wearables and NFTs is cost. Millennials and Gen Z are the defined target for electronic accessories—the customers most likely to understand and embrace the sector—but platforms like Bain & Company predict a 2% decline in fashion spending this year compared to last, driven by a general disengagement among Gen Z. Why? Lack of purchasing power. At the same time, however, according to the Bain & Company and Altagamma report, Gen Z shows growing interest in accessories and wearable tech, creating a significant paradox: while companies invest in collaborations and innovations to attract new generations, these generations, constrained by limited spending power, tend not to purchase. Mature consumers face similar challenges with high prices, suggesting that cost is a partial and cross-cutting barrier. To attract Gen Z, finding a sustainable balance between price, demand, and spending power is crucial. Adding to the complexity are sustainability issues and planned obsolescence, along with the underlying challenges of chip and silicon production. Despite the promising growth outlook reported by Il Sole 24 Ore, this supply chain remains extremely delicate and vulnerable, being heavily influenced by geopolitical issues. Until these knots are untangled, it will be difficult to establish a combined fashion-tech market capable of revitalizing the system. Moreover, convincing new generations to invest in expensive, sustainability-uncertain devices will remain a challenge.