Memo: Whoop Won, Amazon Lost

Whoop won; Amazon bricked its Halo line of products.

Amazon decided to shut down its wearable technology operation that aimed to compete with other prominent players in the market such as Google Wear OS and the Apple Watch. But it’s Amazon’s competition with Whoop that was the most noteworthy. Whoop CEO Will Ahmed was livid when Amazon attempted to duplicate Whoop’s core design concepts and technologies. On September 2021, Ahmed tweeted: “[We] left a message for Amazon etc on every 4.0 circuit board.” The competition runs deeper than a tweet, however. A Wall Street Journal report on July 2020 explained:

Former Amazon employees involved in previous deals say the company is so growth-oriented and competitive, and its innovation capabilities so vast, that it frequently can’t resist trying to develop new technologies — even when they compete with startups in which the company has invested.

Amazon faced significant challenges, ultimately losing to Whoop. There are key reasons for Amazon’s failure in this space and Whoop’s continued growth through enterprise partnerships, innovation, and overall awareness.

1. Lack of differentiation: Amazon’s Halo product did not offer anything significant from Whoop or other market leaders. In contrast, Whoop’s offering stood out with its focus on personalized health, performance, and fitness insights to include recovery tracking and sleep analysis. The lack of unique features in Halo made it difficult for Amazon to persuade potential customers to choose its product over products like Whoop.

2. Late entry into the market: By the time Amazon launched Halo, Whoop had already established itself as a strong player in the wearable technology space via numerous official and unofficial partnerships with professional sports leagues and athletes. Consumers and businesses had already grown accustomed to Whoop’s products and ecosystem, making it challenging for Amazon to penetrate the market and gain a significant market share.

3. Brand reputation: Whoop had built a strong reputation for its product quality, innovation, and focus on customer experience. In contrast, Amazon’s approach of imitating Whoop’s product did not sit well with the market, and the negative perception affected the adoption of the Halo device.

4. Enterprise partnerships: Whoop has been successful in forging key partnerships with businesses and organizations that want to leverage the power of wearable technology for their employees’ health and wellness. Whoop is the official partner to the PGA. These types of partnerships have not only helped Whoop gain a steady revenue stream but have also expanded its market presence and brand awareness.

5. Continuous innovation: Whoop has consistently invested in research and development, improving its products and features. This commitment to innovation has allowed the company to stay ahead of the competition and maintain its position as a market leader. Amazon, on the other hand, failed to invest in developing new and unique features for Halo, making it less appealing to consumers. In March, Whoop announced a new stress-tracking feature.

Each member’s current reading, which is converted into a personalized Stress Score, is then compared to their individual HRV baseline from the last 14 days, as well as their typical resting heart rate. When generating a member’s Stress Score, WHOOP is able to delineate between moments of physiological stress and physical strain.

And on April 25, Whoop rolled out its “Strength Trainer,” a service that allows users to track strength training by gauging the “physiological impact of muscular load.”

6. Effective marketing and overall awareness: Whoop has been successful in creating awareness about its products through targeted marketing campaigns, social media presence, and endorsements from athletes and celebrities – especially by the golfing community. This has helped the company build a strong brand presence and attract a dedicated user base. Puff pieces like these by are invaluable:

Leading players like Rory McIlroy and Justin Thomas use the detailed recordings of Whoop, while Nick Watney, who was the first PGA Tour golfer to test positive for Covid, was alerted to carrying the virus by the heart and respiratory recording from his Whoop band.

Amazon famously pursued a bold acquisition strategy around connected devices and the many data that they contribute, but for these reasons, it didn’t work out as planned. In Consumer Data and Amazon, I explained:

Amazon now has a presence in the following categories: laptops, streaming television, in-home assistants, smart speakers, Door cameras, fitness monitors, and now vacuum cleaners. Collectively, Amazon knows more about its consumers than any other company on earth.

The closure of the wearables department will mean that Amazon would no longer be able to collect data on users’ health habits, physical activities, and other wellness-related preferences. This data could have been used to serve more targeted advertisements to users, increasing ad revenue.

However, Amazon still possesses a vast data collection infrastructure. While shutting down its wearables department would impact Amazon’s data collection strategy by reducing access to specific types of consumer data, the company’s diversified product and service portfolio ensures that it still possesses a robust data collection infrastructure. But only for now. Amazon seems more than willing to reconsider every program that isn’t focused on traditional eCommerce, physical retail, or retail media networks. What will Amazon brick next?

By Web Smith | Edited by Hilary Milnes with art by Alex Remy and Christina Williams

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