Consumer preferences and willingness to pay for wearable devices: A choice experimental approach

There has been a continuous interest in wearable devices (WDs) and technology of which market size is expected to grow steadily. As its market success will be determined ultimately by consumers’ choices, it is essential to analyze consumer preferences and understand why they do or do not purchase WDs. This research analyzes consumer preferences for WD and their marginal willingness to pay (MWTP) for product attributes. A choice experiment is used to obtain relevant stated preference data while a mixed logit model is used to analyze them. Results show that consumers’ MWTPs for the brand, design, and reduction in personal information leaks are considerably higher than for others. Higher MWTPs for the brand and design attributes of a WD implies that consumers recognize it as a fashion item rather than a common electronic device. The results of the relative importance analysis confirm that consumers regard price, main functionality, and personal information leaks as more important than others when purchasing a WD. The present study is different from existing consumer perspective studies on WD in that it quantifies consumers' MWTP for WD attributes and their relative importance, and suggests the chance of market success for hypothetical WDs that can be launched.