The need for innovation in the healthcare sector is essential to meet the demand of a rapidly growing population and the advent of progressive chronic ailments. Over the last decade, real-time monitoring of health conditions has been prioritized for accurate clinical diagnosis and access to accelerated treatment options. Therefore, the demand for wearable biosensing modules for preventive and monitoring purposes has been increasing over the last decade. Application of machine learning, big data analysis, neural networks, and artificial intelligence for precision and various power-saving approaches are used to increase the reliability and acceptance of smart wearables. However, user compliance and ergonomics are key areas that need focus to make the wearables mainstream. Much can be achieved through the incorporation of smart materials and soft electronics. Though skin-friendly wearable devices have been highlighted recently for their multifunctional abilities, a detailed discussion on the integration of smart materials for higher user compliance is still missing. In this review, we have discussed the principles and applications of sustainable smart material sensors and soft electronics for better ergonomics and increased user compliance in various healthcare devices. Moreover, the importance of nanomaterials and nanotechnology is discussed in the development of smart wearables.