Technologies and New Business Models Are Reinventing Our Industry Before Our Eyes

The headlines tell a story that many leaders in the health club and fitness industry should be watching, closely. Weight Watchers just purchased Wello, a purely digital fitness delivery platform that offers one-on-one and group fitness training online. During a recent quarterly conference call, Weight Watcher’s CEO Jim Chambers had this to say:

“The competitive frame of the weight loss market continues to evolve as free apps and activity monitors generate significant consumer interest.” He went on to comment, “We have an ambitious technology vision. We will become a 21st-century technology organization, engineered for the digital era, whose innovative technology fundamentally improves the way people manage their weight, health and wellness. We will be agile service-oriented, data-driven, cloud-enabled and efficient. We will be a model for digital technology in the markets in which we compete and we will be a magnet for talented innovators both, inside and outside the company.”


Clearly Weight Watchers is addressing the huge market it serves with as many as 70% of US adults being over weight. They are also attempting to service those customers in the most convenient ways possible given the rise of technologies that enable this. This is the new era. Its not just Weight Watchers taking bold innovative moves in wellness through acquisition, so is Wallgreens with their new theranos testing labs and wellness tour, Fitocracy with their 2 million online participants, and RetroFit with their online coaching solution that includes Wi-Fi scales. There are many other examples of these new era business models and the 2013 $330 million wearable market in combination with over 80% of households having smartphones and a 100 Billion apps downloaded so far means there will be even more innovation. You don’t have to be Nostradamus to understand what's here and what’s coming; a wave of new competition set to serve and explosion of customers.

During my recent interview with Dr. Michael Mantell on Health & Fitness Technology (click to listen) we explored how the industry has entered a new era. I compared the impact of the MP3 format on the music industry to what is happening today in the wellness business. While record companies cried over the disruption of their business models, the fact is that the amount of music purchased and the number of live music events attended from 2000-2010 tripled around the world following the advent of digital music. This happened because technology released the constraints of bricks and mortar distribution, enabling a much larger audience to be served in many new ways. The same thing is happening in fitness and wellness today as the brands I’ve shared along with many others are enabling new markets to be reached more effectively and less expensively.

Some health club industry leaders will claim that nothing can replace human interactions, so clubs and trainers can’t be threatened by these new business models. I’d have to disagree. It is true that there is no replacement for human beings, but technology is enabling business models to do things in ways that humans on their own can not at scale. Many of the most successful brands will blend human interaction with technology tools to create even higher levels of service whereby trainers can support hundreds of clients with a combination of digital and physical delivery.  Therefore, very forward thinking bricks and mortar club brands are closlely evaluating the customer experience and considering how things like networked fitness, mobile technology and other digital tools can be integrated into their business models while other new purely digital startups and brands will jump into the space because the barriers to entry in the digital world are some much lower. Just like Weight Watchers, the path to innovation must be kept in mind as the industry enters the 21st century and as we have entered a new era of fitness and wellness.

So what do you think ? Have we entered the new era ? Are new business models going to revolutionize fitness and wellness, growing the market and delivering services in new innovative ways ? Let me know and thanks for reading.

About Bryan

Bryan O’Rourke is considered by many to be a thought leader on technology, health club and wellness trends. He has been quoted in global periodicals like the Wall Street Journal, New York Times, Inc. Magazine, and has been published in journals around the world on his views of how technology will create the dawn of a new era of opportunity for the health club and fitness industries. In addition to being an industry expert, Bryan is a technologist, financier, shareholder and executive in several fitness companies. He has spoken on a range of business and trend topics on four continents. As a contract executive and advisor, Bryan wears many hats, including working for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank, on ACE's Industry Advisory Panel and is CEO of the Fitness Industry Technology Council. To join FIT-C visit www.fit-c.org . To learn more contact Bryan here today .

Globalism A Huge Driver Of The Health and Fitness Business In 2014 And Beyond

What Globalism means in the traditional sense isn't necessarily what everyone thinks. From my perspective its simple: our world is becoming more interconnected. For the health club and fitness industry that means that growth is coming increasingly in new countries with various cultures, languages and resources.

The world has about 7 billion people living in it today (there are almost as many smartphone internet devices as people). The shift to Asia, which has driven 50% of economic development over the past decade and the realization that other cultures and languages are comprising larger shares of our global consumer base are just a few of the implications of "Globalism". What that means is a world of increasing opportunity and change. Those who are prepared to embrace this with flourish while others who avoid it will fail.

Please watch the video a New Global Era In 2014 below and tell me, Bryan O'Rourke, what do you think ? Is 2014 the New Global Era for our industry ?

A New Global Era In 2014 - The Globalism Trend In 2014 - Bryan O'Rourke from Bryan ORourke on Vimeo.

 

About Bryan

Bryan O’Rourke is considered by many to be a thought leaders on technology, health club and wellness trends. He has been quoted in periodicals like the Wall Street Journal, and has been published in journals around the world on his views of how technology will create the dawn of a new era of opportunity for the health club and fitness industries. In addition to being an industry expert, Bryan is a technologist, financier, shareholder and executive in several fitness companies. He has spoken on a range of business and trend topics on four continents. As a contract executive and advisor, Bryan wears many hats, including working for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank, on ACE's Industry Advisory Panel and is CEO of the Fitness Industry Technology Council. To join FIT-C visit www.fit-c.org . To learn more contact Bryan here today .

The AMA And The Disease Of Obesity - Fitness Industry Professionals Should Pay Close Attention

You probably heard the news. The American Medical Association  (“AMA”), the largest physician organization in the U.S., recognized obesity as a disease this month (June 2013). In doing so, AMA President Ardis Dee Hoven wrote, "The purpose of the policy is to advance obesity treatment and prevention. It issues a call for a paradigm shift in the way the medical community tackles this complicated issue so that we can reduce the number of Americans suffering from the effects of heart disease, diabetes, disability and other potentially life-changing health conditions." So why is the AMA doing this ?

There is no doubt that for a variety of reasons, including inactivity, obesity is a major public health problem. However, by identifying the problem as a disease, the AMA isn’t being just altruistic. You see there is money involved; and to this point a more revealing commentary by Dee Hoven was published in US New’s online debate club, when she wrote on June 27, 2013 :

“Recognizing obesity as a disease will spur new interventions and treatments for patients and encourage greater dialogue between patients and their doctors about which behavioral, medicinal or surgical options may be right for them.”

I underlined portions of her quote for emphasis and if you are a fitness or health club professional you should pay close attention.  When the President of the AMA mentions “new interventions and treatments for patients” does anyone really think she is talking about the services a fitness professional or wellness coach might deliver? I propose she is only speaking of services delivered by a medical professional (medical in this context being differentiated from fitness) . Note that of the three topics of “greater dialogue” she mentions only one is behavioral change.  Is anyone surprised ?

If my view appears cynical, please forgive me but read on. There are certainly altruistic medical professionals, many whom rightly identify lifestyle as an important aspect of disease prevention . ACSM’s Exercise is Medicine program is an excellent example of how physicians and facilities can work together in a collaborative way. Physician referrals have the potential to serve as a means for clubs and physicians to work together. However, the sad truth is that as an overall percentage of the bricks and mortar fitness business these collaborative models are few and far between. In fact research has established that exercise referrals often don’t work (See: Exercise may be Medicine, but the Referral Process is not Working).

While I believe we are entering a golden age for the fitness and wellness industry, of which fitness and bricks and mortar facilities can play a big part, we should remain aware of some business realities. In defining obesity as a disease the AMA is really making a land grab for the huge business opportunity it represents and while we all know lifestyle management is the best long-term medicine, pharmaceuticals and surgeries among other “new interventions and treatments” will be a major emphasis by the sick care system because regretfully its about how this current delivery system financially works. You see the AMA move is really a way for its members to get more federal dollars. In other words its all about the cash friends (see Michael Tanner's Obesity Is Not A Disease Article). Having someone take care of themselves by eating right, managing stress and getting enough activity is not something the sick care system can make a buck from right now. One reason the epidemic exists in the first place is because outside of personal choice there has been "no dog in the fight" for primary prevention policy, since there isn't nearly as much profit in that as opposed to, for example, $40,000 bariatric surgeries.

I’ve written before about the fact that the fitness industry, particularly health clubs, should be more concerned about competition from other industries serving as significant competitive threats as opposed to competition within our space (see Hey Fitness Leaders I've Got a Secret). The AMA announcement serves as an example. Therefore, we’ve got to start thinking about some opportunities and challenges that exist for the health club and fitness industry that we’ve yet to tackle and which leave us vulnerable to competitive attack from the medical community. Here are my top 5:

1. We need higher professional standards and governmental sanctioned licensing for fitness professionals. There is a great vulnerability from other professions that already have government sanctioned licensing processes in place to take away opportunities and revenues from fitness professionals going-forward. While self-regulation has been the position of industry associations for some time, the realities are that as obesity becomes a medical condition the ability for non medically licensed professionals to “treat” the condition will become limited. Competition is coming from licensed medical professionals;

2. We need technology standards for equipment and devices. Caloric burn rates are inconsistent among equipment manufacturers. There are no standards to document that reported calories burned on fitness equipment are accurate. This and interoperability among devices and equipment in facilities as well as easy data collection and integration are needed to make it easier for members to track information with little effort. Its all about outcomes and failing to provide a seamless and easy way to use information to measure for outcomes will make facilities less relevant. This can be a competitive advantage for facilities and our industry. That is why I'm involved with FIT-C (the fitness industry technology council).

3. We need facility standards and we must promote why they matter. The recent establishment of minimum standards for fitness facility certifications, put forth by the Joint Committee, creates a path that enables certification of facilities. The Medical Fitness Facility Standard is another example that establishes minimum requirements. This is important for a host of reasons and these standards must be put on a fast track to be further developed and adopted around outcome models which the market will require for us to address the obesity issue effectively as an industry. We need these facility standards;

4. We need more entrepreneurs to create business models that successfully incorporate outcome models to demonstrate the model works. A combination of technology, coaching, nutrition, physical activity and stress management that proves enhanced lifestyles and health outcomes among member groups is necessary to establishing a clear cause and effect and thus reimbursements. There are not an adequate number of these integrated and outcome measured fitness business models out there and none at scale today. Increased competition from pure digital models, like RetroFit, as well as hybrid competition from bricks and mortar player such as CVS and Wallgreens (see an example here) will take the place of what facilities could offer if we don't wake up ; and

5. We need more of an abundance attitude and less of a view to scarcity among leaders in the fitness and health club space. Our focus needs to be on broadened and collaborative efforts . While these efforts exist, they are taking to long to inact. See Collaboration: What Do Transmissions Have To Do With Health Clubs, Fitness and Wellness ?

Those are my top 5 , what are your top 5 and what do you think about the AMA's classification of Obesity as a disease? Let me know your views on this and the 5 areas the fitness and health club industry should focus on. Do you see the medical community as a potential collaborator or competitor ? Let me know your thoughts and hopefully you enjoyed the article.

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities and 5,000 instructor professionals in the US. He advises successful global brands, serves as a member of the GGFA Think Tank, is a member of the American Council on Exercise's Industry Advisory Panel and serves as CEO of the Fitness Industry Technology Council. To join FIT-C visit www.fit-c.org . To learn more contact Bryan here today .

The Affordable Care Act - Implications For Fitness Facilities

 

There is no doubt that primary prevention is key to addressing the long term cost of sick care. With over a billion people on the planet being pre diabetic today, lifestyle is THE key factor in people not being well. Enter the controversial Affordable Care Act, which reflects an attempt by policy makers to incent employer health insurance plans to increase incentives and participation in programs designed to promote improved lifestyles. I believe the dawn of a new era in fitness and wellness is here.

Graham Melstrand of the American Council on Exercise prepared the content with me and we delivered a webinar that you can watch on the subject here. Thank you Graham and ACE for your support and thanks to the Fitness Industry Technology Council for underwriting the webinar with help of Michael Scott Scudder.

So what do you think about the Affordable Care Act ? Is your business contemplating the impact of the legislation ? Let me know your thoughts and hopefully you will find the content informative.

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To join FIT-C visit www.fit-c.org . To learn more contact Bryan here today .