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Ripe for Tech Disruption

Technology and fitness make a good match, which also makes our industry ripe for disruption. Not surprisingly, there was a 40% growth rate from 2014 to 2016 in digital health and fitness exhibits at the Consumer Electronics Show (CES), a launchpad for innovations and new technologies (CES 2016). Technology alone, however, doesn’t spell disruption. There needs to be an opening for something different and desirable in the marketplace.

“Digital disruption—the most recent form of disruptive innovation—occurs when someone finds a way to use technology to give customers something that they value, usually more quickly, more cheaply and at a higher level of satisfaction,” says James McQuivey, PhD, a Boston-area principal analyst at Forrester Research and author of Digital Disruption (Amazon Books 2013). “To spot disruption, look for something that people do frequently, then look for the points of frustration in their experience and ask, ‘Could technology make that significantly easier to do?’”

McQuivey says Uber is a textbook example. “Uber doesn’t have to own cars or build fancy devices; it just uses software to connect drivers and riders, using technology that the drivers and riders already carry with them,” he says.

Think of customer pain points in the fitness industry. One of many is the intimidation of getting started—for decades we’ve had trouble reaching underactive populations. Quite quickly, however, activity tracker companies have introduced devices that provide an easy way (compared with joining a gym) for sedentary people to improve health and bump up activity levels.

Another telltale sign that an industry is on the verge of disruption is lack of genuine competition. “Industries or companies that have been protected by high barriers to entry in the past or geographic isolation are often good examples,” says Michael McQueen, business strategist, trends forecaster and author of Winning the Battle for Relevance (Nexgen 2013), in Sydney.

Consider the traditional process of making it big in fitness. In the past, introducing new exercise equipment to market might have required connections to and backing from major investors or an established company with deep pockets. Now many startups break out via crowdfunding sites like Kickstarter. There’s also UberPITCH, where entrepreneurs take a short, free ride with an investor to pitch their big idea in hopes of getting financial support. If you’re chosen for the rolling pitch, Uber picks you up wherever you are, just as if it were a typical Uber ride!

Another sign of the times: Being a workout video star was once reserved for a select, talented few and involved expensive production and distribution costs. Today any fitness pro or enthusiast can independently shoot and release workout videos through YouTube and other digital channels; some have amassed millions of fans on social media.

“Any industry is in danger [of disruption] when there are . . . large profits being made,” says McQueen. “Small, nimble and hungry entrants will always provide service for a fraction of the price (and profit) that large, cost-laden incumbents can’t match.” A case in point: In the digital-based multimembership model (e.g., ClassPass), consumers pay inexpensive monthly membership fees for access to hundreds of classes at countless facilities. These fees are usually lower than what facilities can offer their members.

“To many, the term disruption has a negative connotation,” says Bryan O’Rourke, MBA, of New Orleans. He’s the president of the Fitness Industry Technology Council, CEO of Integerus, and chief strategic officer at Fitmarc. Perhaps the connotation depends on what side of the fence your business sits on: innovation or irrelevance. To avoid the latter, those of us working in fitness businesses can look to other industries—and consider our own preferences as general consumers—for clues about what our next steps might be. “Customers [have] come to expect more convenience, better service, etc.,” says O’Rourke. “It’s why Uber disrupted the taxi industry. Mobile-first strategies work, and when consumers have more power and choice, they vote for brands that appeal to them in that manner.”

“There is never only one way to do things,” says Nadia Banks, business development manager at Intel in San Francisco. She monitors disruptions in numerous industries, identifying the key movements that alter industry landscapes. “Companies [such as Uber and Airbnb] challenged the status quo and looked at how to address consumer pain points or how to improve a consumer’s experience. It’s when you get stuck saying, ‘This is how it’s always done,’ that you realize it is time for change.”

Many facets of the fitness industry have arrived at this point. “Disruption is on the horizon for every business,” says Brian Solis, San Francisco–based author of X: The Experience When Business Meets Design (Wiley 2015) and principal analyst at Altimeter Group, a Prophet company. “It’s what you do about it now and over time that defines your destiny of digital Darwinism (the evolution of technology’s impact on . . . everything).” So what will you do?

To read more about how all sorts of technologies are steering the fitness industry towards disruption with things like apps and activity trackers, please see “Tech Disruption and the Fitness Industry” in the online IDEA Library or in the July-August 2016 print issue of IDEA Fitness Journal. If you cannot access the full article and would like to, please contact the IDEA Inspired Service Team at (800) 999-4332, ext. 7.

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