Tech Disruption and the Fitness Industry
How soon do you need to prepare for a new normal?
If you’ve ever binge-watched House of Cards on Netflix, booked accommodation through Airbnb, caught a ride with Uber or tuned in to a Spotify playlist, you’ve experienced how technology disruption can bring convenience and enjoyment to the customer experience—and usually at a cost-savings!
In the business world, disruption refers to significant changes occurring within an industry, often at a fast pace—changes that shake up the status quo, disturbing accepted ways of thinking and doing business. Digital technologies have now made it possible to order and pay for your morning Starbucks entirely through your iPhone or Android; skip the line! You’re also free to watch any number of television series when you want, on demand, not just when a cable network broadcasts them.
And fitness? How soon should we expect major shifts in our industry? They’re already happening, but there’s room for more. All sorts of technologies are steering the fitness industry toward disruption with apps and activity trackers, sensors embedded in workoutwear, smartphone-compatible devices, virtual-reality headsets, software platforms, artificial intelligence, drone- delivered personal trainers (ha!) and much more still on the horizon, including the potential for convergences of multiple technologies into one or two access points.
While fitness facilities have already been preparing for a new normal in terms of tech-based customer interactions and services, many personal trainers and fitness instructors have been slower to plan for a tech-driven future. This article explores the reality of disruption in the fitness industry and offers takeaways on how to ensure your business stays relevant in a fast-changing digital world.
Ripe for 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?
Watching Trends Versus Forecasting Disruption
The fitness industry has always seen strong trends. A few examples are yoga, Tabata® and body-weight training. But formats like these haven’t fundamentally changed the framework of how we do things: For the most part, people still exercise at the gym, at home or outdoors, just as they did before the trendy activity came along. This is not the same as disruption. The difference is largely one of scale, says McQueen. “While trends are often linear and evolutionary, disruption is more fundamental and revolutionary,” he says.
Says Solis: “Industry trends are just that . . . trends. Some of them are short-term with low impact, and others set the bar for new forms of engagement and/or options. Disruption is both an intention and a result of consistently investing in innovation to do things that create new value or doing new things that make the old things obsolete.”
In the trend reports we reflect on in the fitness industry, there’s a lot of similarity from one year to the next. Whatever tops the list is rarely a shocker. McQuivey says that’s because industry trends are usually incremental and don’t fundamentally alter the structure or economics of the business. “Industry disruption, on the other hand, typically results in a new kind of company grabbing power that didn’t exist before. At a minimum, it changes the business model by which people serve customers. And that business model change typically alters the profitability of the prior business model, such that it no longer generates the profits it did before. That means everybody has to move to the new model,” says McQuivey.
A strong enough trend may help lay the groundwork for disruption. For example, the demand for high-intensity exercise may have helped fuel a shakeup in the traditional gym model as specialized CrossFit® boxes started popping up everywhere. “Trends reflect the seeds that may grow into disruption,” says O’Rourke. “But disruption by comparison is the actual emergence of competitors that are taking advantage of the trends in unique ways.”
While it’s possible to predict trends, forecasting a disruption isn’t as easy. “Disruption is far more difficult to ‘predict,’ by nature, because it’s often out of left field,” says McQueen. It’s that whole “hindsight is 20/20” thing: “Disruption is easier to see after it happens, unless you know what to look for and are actively looking for threats,” says Solis. “But disruption is more than threats. It’s the ability to identify opportunities that stave off disruption while also investing in strategies that disrupt someone else.”
An exploration of disruptive opportunities and strategies in the fitness space includes looking at today’s customer expectations across
industries. We live in an increasingly mobile and do-it-yourself (DIY) culture. People want what they want on demand and ASAP. “This is a time for business leaders to look at other industries to find inspiration in new places,” says Solis.
DIY, On Demand and Immediate Gratification
With activity trackers, smart workoutwear and other sensors, consumers have immediate access to real-time, measurable feedback about how their bodies react to whatever activity they’re doing at that moment. Apps make it possible to sign up instantly for a live class on the fly—and it’s DIY, too, so you skip the hassle of going through a staff person at the health club. Or, you can take a virtual class at whatever time suits you: You’re not beholden to a gym’s schedule, or even the need for a gym. With live video growing in popularity—anyone on Facebook can broadcast live via mobile—up-to-the-minute interactions are the norm more than ever. All of these examples reflect what consumers have come to expect: on-demand experiences delivered through technology.
“Consumers have always wanted immediate gratification,” says McQuivey. “They just couldn’t get it in most areas of their lives, so they learned to deal with [less] satisfaction. But now they’re getting more and more satisfaction in their regular lives—from their banking to their shopping—and it’s bleeding across industries until it changes the way people expect to be served in every industry. What started with on-demand music and video is now becoming on-demand loans and on-demand medical care. All because people got a taste of a better way and some disrupter somewhere said, ‘I can satisfy people at that level in this adjacent industry over here,’ and pretty soon, the whole world changed,” says McQuivey.
Fitness pros and companies must look at their businesses the way customers look at them. Forget about how you’ve always done things; how do clients want to do things? “The on-demand and instant-gratification services popularized by connected customers are becoming the new standard in customer experience,” says Solis. “Active users expect over time that every business will offer the ‘Uber of’their industry.”
What is, or will be, the “Uber of” the fitness industry? Whatever forms the shakeup takes (many are already happening), fitness pros must accommodate new approaches to doing business with clients and members because, as Solis points out, “customers don’t go backward once they’ve tasted a new, more personalized and responsive service.”
According to O’Rourke, the key is to combine superior fitness experiences with outstanding digital experiences. “The surge in consumer choices will enable delivery of services across a wider array of distribution points—pure digital, apps, bricks and mortar, even Uber-like services with professionals coming to your home on demand. The options are almost endless.”
John Golden, president of product pioneering at EXOS, in Chicago, encourages fitness pros and companies to embrace the growing self-serve aspect of the fitness industry. “It provides data that allows operators to create solutions that can more effectively and efficiently impact our members,” he says. Golden believes that fitness businesses must come to see their relationship with consumers differently. Yes, gyms are a place to exercise and trainers/instructors are facilitators of exercise, but a core approach moving forward will involve assisting consumers in making real-world sense of the tech data they gather and ultimately fostering social communities (perhaps virtual ones) that support people in their fitness endeavors.
In the fitness industry, we know about community. Whether we mean a sense of belonging in a local bootcamp class or connecting to like-minded others through the culture of CrossFit or SoulCycle, community has always been important to exercise motivation and adherence. With technology, the potential for connection and community is far-reaching.
Earlier this year, former Twitter CEO Dick Costolo announced that he was partnering with Bryan Oki, previous CrossFit coach and former CEO of the health/wellness consulting firm Fitify, to build a software platform that “reimagines the path to personal fitness.” Costolo tweeted out a statement that included the following info: “This platform will go beyond measurement to motivate and drive improvement and make the road to personal transformation fun and social. For wellness professionals, from fitness coaches to physical therapists and nutritionists and more, our platform will be the easiest and most flexible way to extend expertise and guidance by orders of magnitude.”
Luckily, getting onboard with various fit-tech offerings won’t mean you must abandon your roots as a fitness educator. “Fitness professionals do what they do because they love helping their clients achieve goals. They aren’t in it because of their love for technology,” says Banks. “Technology is a powerful tool to help you better know your customers, enabling a direct and personalized relationship to enhance their experience.”
Innovate or Adapt
Many fitness-related tech innovations come from outside the fitness industry first. That’s okay. “Few businesses can truly innovate,” says Golden. “Most try to follow fast or adapt to change. The skill set, investment and focus that are required to innovate are a tax that most fitness businesses are unable to afford.”
The survival of the average fitness professional doesn’t hinge on developing a revolutionary app or being the first trainer or club owner to offer workouts with Oculus Rift, a virtual-reality device acquired by Facebook. It’s about how you use, or plan to use, innovations to advance people’s health profiles and fitness capabilities. Reinvent yourself if necessary.
“You don’t have to be the actual disrupter who changes an industry in order to survive disruption,” says McQuivey. “But you do have to adapt. It means eventually changing the business model, but even that doesn’t always have to happen overnight.” Be prepared to look at your business and customer service from fresh perspectives, though, and do it sooner rather than later.
“Always dig the well before they get thirsty,” says McQueen. “In other words, change before you are forced to. That way, you are operating out of strategy rather than survival.”
While some people half-joke that technology will eventually replace fitness floor staff, group instructors and personal trainers, many experts say that’s unlikely (maybe though, when those human-faced robots get certified . . .). What fitness professionals should be planning at this time is how they will guide clients in making fit-tech interactions optimally meaningful.
“Technology should not be designed and purchased to replace the coach,” says Golden. “Instead, look at it as a way to extend the reach and impact of the coach. . . .
Coaches can service more clients, and have more touch points with their clients, which increases revenue and member satisfaction.”
Banks agrees that technology is not about replacing people in the fitness industry. “Technology is a tool that can help fitness professionals and fitness companies more successfully reach their clients,” she says. “[Industry professionals] are the best translators of all this data. In order to achieve goals, people need accountability, and technology alone cannot provide that human connection. Fitness professionals and fitness companies are the key to unlocking the power that technology offers the world.”
This is an exciting time! We have access to new, increasingly more accurate and convenient ways of helping consumers live better and longer through improved health and fitness. And so much is still ahead. Now is the time to put aside old ways of thinking and put your immediate focus on the customer. “[Work] to understand what people really want, and change the way you operate to give it to them,” says McQuivey. “Do that over and over and you’ll find yourself looking and acting a lot like a disrupter, because that’s exactly what disrupters do.”
As you strive to stay relevant in an industry experiencing disruption, you may find yourself positioned at a subtle intersection of real and virtual. “The future of digital is the seamless blending of physical and digital,” says McQuivey. “[For example,] banks are working hard to make it so that you don’t have to go to the branch. [And they] are building apps so that when you do go to the branch, you have a better experience because they know you’re coming and they have a sense of what you need help with. That same thing will be true for health and wellness.” Some gyms already use their own branded apps to help members and trainers track and analyze progress. “That kind of partnership between physical and digital will become necessary,” says McQuivey.
O’Rourke notes similar DIY personalization at hotels, where you can check in, access your room, and order room service through an app. No need to wait in line or call down to the front desk. “This is about great customer experience, and the tech is designed [with] that in mind,” says O’Rourke.
Look to other industries for inspiration and then consider how you will establish your own relevancy in the fitness marketplace of the not-so-distant future. “Today’s culture affords the fitness industry the opportunity to occupy a closer and more trusted role in clients’ daily lives,” says Banks. “Globally, consumers are proactively taking control of their health and prioritizing it as an integral part of their routines. Given this shift, fitness professionals must develop a command of the tools that enable them to be more deeply integrated into their clients’ lives both in and out of the gym.”
CES (Consumer Electronics Show). 2016. (We’re sorry, the original video link posted for this reference is no longer viable.) Video accessed Apr. 9, 2016.
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