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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Bryan K. O’Rourke, MBA

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Page 1: Impact Of Technology On Fitness Industry - IHRSA 2010

Technological Innovation and the Fitness & Wellness Industry:

Predicting the Impact

Bryan K. O’Rourke, MBA

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all content available @

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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before we start a word from seth myers

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Thanks Technology

Seth Myers

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broad

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4

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Key Trends

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Biz Models

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Innovation

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Predictions:Consumers &

Facilities

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“change is the process by which

the future invades our lives”

Alvin Toffler

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think different

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No Crystal Ball

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Different

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revolutionconvergence & divergence

<3>

demography

globalism

technology

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key technology

trends

1st

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how will it impact our lives & industry ?

technology - what has it &

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Technology: etymology greek - meaning skillful application of an art. The practical application of science in commerce or industry.

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Technology: the pace of change is not linear its exponential. Adoption rate is increasing similarly.

Gordon MooreCo-Founder of IntelNumber of transistors on a chipwill double every two years. “Moore’s Law”

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Law of accelerating returns . We are just seeing the start - “knee of the curve”

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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1,2,3,4,5,6,7,8,9,10.......

2, 4, 16, 256............

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Internet: The free exchange of information with limited constraints.

-Commercial Internet began only 5,300 days ago-Serves over 1.5 Billion people-79% of US adult population-40% of US consumers usesearch engines for comparativeshopping

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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The “Grid” Becoming Increasingly Integrated

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Devices - getting smaller and more powerful.

The ability to increasingly and more easily integrate technology into daily life is upon us.

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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15 Billion by 2015

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Mobility: Communication & information when ever and where ever the customer wants it.

Mobile Internet Access:Pew - 56% of US AdultsIncrease of 73% in 17 months

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Mobile speeds will increase ...........

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Internet will become more intelligent ...........

Web 3.0the “Semantic” Web

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Cloud Computing: Low cost ubiquitous storage and application deployment !

Outsourced Service PlatformsSalesforce.com

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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explosion of interactive tools & platforms

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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Merger of

Physical &Digital

emotiv

natal

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key trends

digital reality

intelligence

connectivity

miniaturization

web 2.0 & 3.0

cloud computing

low cost

new products &services

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2

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Biz Models

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VALUEPROPOSITION

COSTSTRUCTURE

CUSTOMERRELATIONSHIPS

CUSTOMERSEGMENTS

ACTIVITYCONFIGURATION

CORECAPABILITIES

PARTNERNETWORK

REVENUESTREAMS

DISTRIBUTIONCHANNELS

business model

INDUSTRYSUPPLIER

DEMANDCUSTOMER

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"companies that expect a glorious

past to shield them from the

forces of change driven by advancing technology will fail."

- Rupert Murdoch

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0

75.0

150.0

225.0

300.0

2021 40

206

Fitness FacilitiesVideo Games

OTC DietRetail Pharma

2009 U.S. Revenues(in billions $)

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1%

99%

Fitness Facilities Health Care

2009 U.S. Market(US health care $2.6 trillion)

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17%

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U.S. Fitness Facility Marketstatistics from www.cmeto.com

46%

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Market Evolution

“Membership” ModelPricing Has Declined

Low Price & Limited Features High Price & Full Features

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PRIZM

Consumers

66 Groups

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IHRSA 2009 comparative US industry data

7 groups account for 75% of US club members

Income / Price is a KEY Barrier

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"It may be fatal to assume that minor adjustments to current business models will keep the fitness industry abreast of changing times."

http://futureoffitnesswhitepaper.ning.com/

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DemandIndustry Convergence

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clothing

supply side

Li & Fung Group

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movie theaters

arcades

record stores

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Economics of Free

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VALUEPROPOSITION

COSTSTRUCTURE

CUSTOMERRELATIONSHIPS

CUSTOMERSEGMENTS

ACTIVITYCONFIGURATION

CORECAPABILITIES

PARTNERNETWORK

REVENUESTREAMS

DISTRIBUTIONCHANNELS

business model - new models needed

INDUSTRY SUPPLIER

DEMANDCUSTOMERdigital technologies

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3

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Innovation

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“those who cannot change

their minds cannot change

anything”

George Bernard Shaw

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How OrganizationsCreate Value

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VALUEPROPOSITION

COSTSTRUCTURE

CUSTOMERRELATIONSHIPS

CUSTOMERSEGMENTS

ACTIVITYCONFIGURATION

CORECAPABILITIES

PARTNERNETWORK

REVENUESTREAMS

DISTRIBUTIONCHANNELS

business model - what is technology doing ?

INDUSTRYSUPPLIER

DEMAND - CUSTOMER

+

_

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sustaining

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disruptive

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consumercentric

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EmpoweredConsumers

It’s all about the

“You”

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Product - Build fences, own it all

Price - Competition, supply - demand

Place - Physical distribution

Promotion - Sell, sell, sell

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

....Legacy of the Industrial Revolution

To Deliver Value Organizations Used To ......

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Product = Experience, Co-Created

Price = New Value Exchanges

Place = Marriage of Digital & Physical 24/7

Promotion = Conversation or Engagement

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

To Deliver Value Organizations Must Now......

.... A New Way of Doing Things

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

C.K. Prahalad

“To successfully compete companies must reinvent their process & culture in order to sustain innovative solutions.”

“World’s Most Influential Management Thinker”-Times of London 2007

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N = 1

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R = G

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orchestration

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Innovation = Value Creation

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

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U’s Together =

CommunityCentric

customer focus

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social media = new business models

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To Innovate:

Change How Organizations Work

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

New Methods, Roles & Models to Compete

Integral Part of Organizational Capability

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4

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What’s Aheadpredictions

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1. non-facilitycompetition will surge

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Merger of Technologies Including Social MediaWill Create New Low Price Alternatives

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

Nike Running

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OutsideIndustry Convergence

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2. successful facility competitors will deliver

new models

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Product = Experience, Co-Created

Price = New Value Exchanges

Place = Marriage of Digital & Physical 24/7

Promotion = Conversation or Engagement

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

.... A New Way of Doing Things

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

Hi-Tech Hi-Touch

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

Financial ServicesIndustry

Measure is not# of Bank Branches

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

24/7 Service & Support

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

Adoption of Social Media Best Practices

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3. “wellness” will increasingly emerge

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The Crisis...23% of Americans participate in no physical activity

62% of Americans obese or overweight -18% rise in last decade.

23% of Americans still smoke. 3000 start each day.

78% of men eat vegetables less than three times per day.

75% - 90% of visits to Primary Care Physicians are for stress.

THE COST IS BANKRUPTING OUR NATION

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Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact

Head - Traditional Fitness Industry

Long Tail - New Wellness Space

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Finally

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“The greatest obstacle to

progress is not ignorance. It’s the Illusion of knowledge. “

-Daniel Boorstin

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"Of the ten leading vacuum tube companies, none participated in the transistor revolution".

–Chet Raymo

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is up to us......

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think different

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Technological Innovation and the Fitness & Wellness Industry:

Predicting the Impact

THANK YOU