Why does Amazon want a fitness tracker?

Discussion
Sources: Amazon
Aug 31, 2020
Tom Ryan

Amazon.com last week introduced Halo, a combination fitness tracker, app and subscription service. The device will take on Fitbit, which is being acquired by Google, Apple Watch and others while possibly building on Amazon’s ambitions in the healthcare space.

The AI-enabled wristband tracks activity and sleep basics like many wearables but goes beyond by being able to estimate body fat percentage via a smartphone camera. The “Tone” feature tracks emotional state by listening to the user’s voice, enabling insights into “energy and positivity.”

Unlike Apple Watch or Fitbit, however, the Amazon Halo Band doesn’t have a screen, forcing the user to head to the companion app to see their health metrics and gain access to “challenges, experiments, and workouts” offered through the Halo subscription.

A range of exercise routines, meditation practices and tips on improving sleep and other fitness habits are provided by 8fit, Harvard Health Publishing, Mayo Clinic, Orangetheory and others.

“Health is much more than just the number of steps you take in a day or how many hours you sleep,” said Dr. Maulik Majmudar, principal medical officer, Amazon Halo, in a statement. “Amazon Halo combines the latest medical science, highly accurate data via the Halo Band sensors, and cutting-edge artificial intelligence to offer a more comprehensive approach to improving your health and wellness.”

Amazon will make the device and subscription available at an initial invitation-only rate of $64.99 before raising its regular price to $99.99.

The Halo was built with “privacy in mind,” the company claims, with health data “encrypted in transit and in the cloud,” and body scans and voice data automatically deleted after they’re processed. The company says the device has no ties so far to Alexa or Amazon Prime.

Amazon has largely focused on in-home devices such as its Echo smart speakers and Fire TV. Last year, the company experienced disappointing launches with its wireless earbuds, finger rings and prescription eyeglasses with Alexa built-in.

No mention is made in Amazon’s release of its other health ventures, such as the purchase of online pharmacy, PillPack, a healthcare joint venture with JPMorgan Chase and Berkshire Hathaway nor the recent opening of employee health clinics.

DISCUSSION QUESTIONS: Why do you think Amazon is moving into the fitness tracker space? Do you see a bigger potential benefit to its core online marketplace or the company’s health care ambitions?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"At its core, Amazon is a data company, collecting and using customer data so it can be more effective at selling products."
"This is all a data play and it’s brilliant. They already know what you buy, what you watch, what you read, what you listen to, and now they’ll know your biometric data."
"I love the idea of a health monitor that hooks up to my doctor’s office. I hate the idea of a health monitor that hooks up to Amazon. And I’m a fan of Amazon."

Join the Discussion!

34 Comments on "Why does Amazon want a fitness tracker?"


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Mark Ryski
BrainTrust

The same reason Amazon does other things; to acquire more data on people with the hope of monetizing it – directly or indirectly – in the future. There’s no question that the online healthcare market is large and growing, with new services and products being launched every day. So it’s not surprising that Amazon wants to play a bigger role in the market and, while there are plenty of benefits of these new health services, it also opens a treasure trove of data, and that’s the real treasure to a company like Amazon.

Zach Zalowitz
BrainTrust

They want it for the same two reasons everyone else does. They want to collect your data and then sell you stuff based off that (sorry, three reasons — they want to sell the data that they collected about you). I see way more concerns right now than value being added in, for example, calculating body fat percentage just from a video/picture of you.

Gene Detroyer
BrainTrust

Absolutely, the desire is not unique to Amazon. But all the technology products from Apple to Peloton are already collecting data and monetizing it. Are we outraged about that?

Jeff Weidauer
BrainTrust

A fitness tracker is one more touchpoint for Amazon to connect with consumers and constantly collect passive data. Tracking shoppers while on the site is one thing, but this allows deep insights to behavior all day long. The voice aspect is especially interesting given the capabilities of voice AI to track mood and health. While Amazon promises to protect the data collected – meaning they won’t sell it – they will make good use of it internally to slice and dice the user base and market to them more effectively. Everything Amazon does is focused on that same goal.

Cathy Hotka
BrainTrust

A device that measures your tone of voice all day — what could possibly go wrong?

Ricardo Belmar
BrainTrust

Just wait for the emails you’ll be getting reminding you how happy you were when you put that item in your shopping cart!

Cathy Hotka
BrainTrust

Yikes!

Raj B. Shroff
BrainTrust

Amazon is moving into health and wellness, the fitness tracker is one way to get valuable data. I think their goal is a total ecosystem to build a complete solution around each individual shopper (consumer). Once they have enough data, they can use it to predict and ultimately prescribe products and services. I think their long-term goal is to know what you want and need before you do, in a way we can’t quite fathom yet. But just the data alone will be worth a fortune for their future product and service strategies.

If executed well and adopted by just Prime members alone, it will be beneficial to its core and its healthcare ambitions.

Dave Wendland
BrainTrust

Amazon recognizes that information is the most valuable currency in the world. Its entry into the fitness space is not a product play per se, but rather a data initiative. Sure, Halo can connect users to the app to track movement, steps, and activities. The goal, however, as stated by their principal medical officer, Dr. Maulik Majmudar, is to improve health and wellness. That’s where the rubber hits the road and Amazon most definitely has the infrastructure, services, and ambition (and of course health-related products) to deliver on this promise.

Bob Phibbs
BrainTrust

I’ve said this a hundred times, Amazon is a data company connected to warehouses. The more information they can mine by knowing body mass, health, eating habits, and tracking movement, the more they can sell that information and use it to sell a variety of things from clothes, to medicine, banking accounts, life insurance – the works.

There’s a reason Scott Galloway has advocated their breakup for years as a monopoly.

Gene Detroyer
BrainTrust

Isn’t that good ol’ American capitalism? Should Amazon ignore obvious opportunities to grow their business? If so, an Amazon shareholder should be really upset with management. Does Apple, Samsung, Peloton provide data for others to do exactly the same thing?

Bob Phibbs
BrainTrust

Unfettered access to people’s private lives is not a recipe for making the world better.

Gene Detroyer
BrainTrust

I fully agree with you. But this isn’t an Amazon issue. It is reality.

Shep Hyken
BrainTrust

The first thought that came to mind was about data. I’m sure Amazon will have the answer to that. They’ve already shared their position on privacy. But consider a bigger picture that can positively impact the customer, too. As the capability of the smart devices improve, so does the opportunity to integrate a lifestyle into the Amazon ecosystem. The more Amazon knows about its customers, especially with something as important as their health, the better they can serve them and recommend products. That’s something Amazon does VERY well. Good or bad, that’s the fact.

Suresh Chaganti
BrainTrust

It is laughable to claim that they have privacy in mind. Data being encrypted at rest and in-transit means it will not be stolen. But that doesn’t say anything about what Amazon can/cannot do with the data.

Regarding the intentions of Amazon, it is obvious they want to crack the healthcare space. Maybe they will offer adjunct health insurance/services – along the lines of GoodRx for prescription drugs.

Keeping privacy concerns aside, I do hope Amazon’s ambitions are large enough to start solving the healthcare puzzle in a significant way.

Stephen Rector
BrainTrust

Healthcare/insurance is ripe for disruption and the tech giants (FAANG stocks) are all over this already. For Amazon this is about data collection first, but the possibility of Amazon Health Insurance tied into a person’s Amazon Prime membership could very well happen in the future – essentially Amazon being the hub for all of your health and shopping needs.

Dave Wendland
BrainTrust

Stephen, I would suspect that such connectivity is definitely on the radar within Amazon’s four walls — and likely better formulated than one could ever imagine.

Michael La Kier
BrainTrust

Simple answer — Amazon wants more data. Amazon already dipped their toes into the healthcare space with the acquisition of PillPack. According to the latest data, total U.S. healthcare spending in 2020 will be over $3.65 trillion, which equates to 17.8 percent of GDP. This is a big untapped (for Amazon) revenue pool.

Lee Peterson
BrainTrust

Again, the opportunity is data. Who buys what how, and how often, can tell a lot about a customer not only in this category but for related categories as well. Any chance to gather more data on consumers is a plus-plus, and Amazon is very good at that and at putting that data to a profitable use.

Neil Saunders
BrainTrust

For two reasons. The main one is data. The other one is to strengthen its ecosystem. You can see the obvious links with Alexa and Echo devices. And you can see how Amazon can use the data to market and develop its offer in the health and wellness space. Basically this is another touchpoint for people to interact with Amazon and for Amazon to understand more about them!

Bethany Allee
BrainTrust

Are we starting a pool on when the government is going to explore monopoly charges against Amazon? I realize a lot depends on the election, but I’m willing to place a bet for initial hearings in March 2021.

Liz Adamson
BrainTrust

As many have already commented, it’s all about data. At its core, Amazon is a data company, collecting and using customer data so it can be more effective at selling products. That includes selling more products on its marketplace and gauging the opportunity for further expansion into healthcare.

Brandon Rael
BrainTrust

The misconception out there is that Amazon is a retailer or an e-commerce giant. They are in fact a conglomerate of businesses that are driven by data and insights to sell you products and services that are catered to your personal needs. A fitness app is yet another opportunity for Amazon to gain valuable insights about your health, fitness, diet, and other components of your daily life, and then convert those insights into driving new business opportunities.

There are clear friction and reward components at play here with the balancing of your personal data and the perceived benefits that may come out of the other side. Those companies that monetize and operationalize personalized services out of data and insights will come out on top.

Richard Hernandez
BrainTrust

It’s about the data — period.

So not only will be I be able to order from my Alexa but also my watch. I think they will have a lot of catching up to do with the market leaders like Apple.

Mohamed Amer
BrainTrust

Improving your health and wellness is the new gateway and catalyst to a multi-industry growth arc. Amazon’s Halo is designed as the fundamental layer to disrupt the delivery of everything from medical services, over the counter drugs and supplements to prescriptions, personalized food lists, and workouts and meditations, and much more.

Amazon recognizes the increase in expected lifespans and our deep desire to have an invigorating life. While dramatically increasing the millions of data points collected on every individual, Amazon is linking the profound strength of its cost-efficient logistics platform with a powerful emotional hook on our desire for anything akin to immortality.

Halo may not deliver on all the above, but it will provide valuable learnings for the company and is a must-have core to Amazon’s future growth construct. Halo demonstrates Amazon’s grand design and commitment to being everything to every consumer. Their competitive zeal is global, ultra-comprehensive, and unbound by current imagination.

Lisa Goller
BrainTrust

Amazon’s limitless vision includes expanding into healthcare and insurance. These industries are a perfect fit for Amazon’s prowess in process re-engineering for efficiency.

Now these fitness trackers will help Amazon gather biometric data to know us even more intimately. Applying these rich, individual insights will improve personalization efforts, whether they relate to Amazon’s core retail business or future health services.

Ricardo Belmar
BrainTrust

Two reasons – data, and sales growth. When you’re a trillion-dollar company, how do you grow sales at a large enough proportion to increase shareholder value? You have to enter a new market, and healthcare is one of the few markets left for Amazon to enter with a new product. Couple that with wearable tech, another growth market, and the opportunity to collect even more data about your customer, then you’ve got a 1 + 1 = 3 scenario for Amazon. Let’s also consider that this wearable isn’t just a tech purchase, but also a recurring monthly subscription. That’s yet another incremental revenue Amazon just launched. The flywheel is in full effect!

Adrian Weidmann
BrainTrust

Personal data and monetization – pure and simple. Amazon is a data company whose next big business target is telemedicine. What better way to get personal data than getting it from a device consumers willfully strap onto their wrist and wear 24-hours a day! Big Brother now follows your heartbeat.

Jeff Sward
BrainTrust

I love the idea of a health monitor that hooks up to my doctor’s office. I hate the idea of a health monitor that hooks up to Amazon. And I’m a fan of Amazon. You want to know all about my apparel and dog food purchases? Fine. You want to know the details of my health? I don’t think so.

Joel Rubinson
BrainTrust

Amazon is so much more than a retailer. They are now #3 in ad revenues. They are the cloud. They are in TV with Amazon Prime and Fire Stick. So I have two guesses. 1.) They could be using this as part of a differentiating offer regarding healthcare and medications; 2.) FOMO. They are in everything so how can they not have a play in the “digital self”? I do NOT think they will link personal data to other information for targeting purposes. That would really be invasive and invite a massive backlash.

Lauren Goldberg
BrainTrust

This is all a data play and it’s brilliant. They already know what you buy, what you watch, what you read, what you listen to, and now they’ll know your biometric data. The personalized shopping options are endless — promoting healthy food, smaller sized clothes, new sneakers, etc.

Gene Detroyer
BrainTrust

This is just another step for Amazon. The healthcare business provides great opportunities in so many ways. It has little to do with selling things and much more to do with developing additional businesses that have nothing to do with retail.

Predicting again … in 10 years, retail will be no more than 20% to 25% of Amazon’s revenue and a lesser percent of its bottom line.

Mel Kleiman
BrainTrust

Amazon’s move into the fitness tracker space is a simple decision based on three key points:

  1. People are concern with their health;
  2. They are willing to spend money on products to help them live a healthier life;
  3. Technology is changing the way consumers deal with health issues.
wpDiscuz
Braintrust
"At its core, Amazon is a data company, collecting and using customer data so it can be more effective at selling products."
"This is all a data play and it’s brilliant. They already know what you buy, what you watch, what you read, what you listen to, and now they’ll know your biometric data."
"I love the idea of a health monitor that hooks up to my doctor’s office. I hate the idea of a health monitor that hooks up to Amazon. And I’m a fan of Amazon."

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