Impact of technology on fitness industry - IHRSA 2010

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

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact all content available @

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact before we start a word from seth myers

Thanks Technology Seth Myers

Key Trends

Biz Models

Innovation

Predictions: Consumers & Facilities

“change is the process by which the future invades our lives” Alvin Toffler

think different

No Crystal Ball

Different

<3> demography technology globalism revolution convergence & divergence

1st key technology trends

technology - what has it & how will it impact our lives & industry ?

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact 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 Gordon Moore Co-Founder of Intel Number of transistors on a chip will double every two years. “Moore’s Law” Technology: the pace of change is not linear its exponential. Adoption rate is increasing similarly.

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Law of accelerating returns . We are just seeing the start - “knee of the curve”

1,2,3,4,5,6,7,8,9,10....... 2, 4, 16, 256............

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact -Commercial Internet began only 5,300 days ago -Serves over 1.5 Billion people -79% of US adult population -40% of US consumers use search engines for comparative shopping Internet: The free exchange of information with limited constraints.

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact The “Grid” Becoming Increasingly Integrated

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact The ability to increasingly and more easily integrate technology into daily life is upon us. Devices - getting smaller and more powerful.

15 Billion by 2015

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Mobile Internet Access: Pew - 56% of US Adults Increase of 73% in 17 months Mobility: Communication & information when ever and where ever the customer wants it.

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Mobile speeds will increase ...........

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Web 3.0 the “Semantic” Web Internet will become more intelligent ...........

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Outsourced Service Platforms Salesforce.com Cloud Computing: Low cost ubiquitous storage and application deployment !

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact explosion of interactive tools & platforms

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

Merger of emotiv Physical & Digital natal

key trends connectivity digital reality miniaturization new products & services intelligence web 2.0 & 3.0 cloud computing low cost

Biz Models

business model INDUSTRY SUPPLIER PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMER CAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS DEMAND CUSTOMER

"companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail." - Rupert Murdoch

2009 U.S. Revenues (in billions $) 300.0 225.0 150.0 75.0 0 206 20 Fitness Facilities 21 40 Video Games OTC Diet Retail Pharma

2009 U.S. Market (US health care $2.6 trillion) 1% 99% Fitness Facilities Health Care

U.S. Fitness Facility Market statistics from www.cmeto.com 46%

Market Evolution Low Price & Limited Features High Price & Full Features “Membership” Model Pricing Has Declined

PRIZM Consumers 66 Groups

IHRSA 2009 comparative US industry data 7 groups account for 75% of US club members Income / Price is a KEY Barrier

"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/

Demand Industry Convergence

supply side Li & Fung Group clothing

movie theaters arcades record stores

Economics of Free

business model - new models needed INDUSTRY SUPPLIER PARTNER CUSTOMER NETWORK RELATIONSHIPS CORE VALUE CUSTOMER CAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS DEMAND CUSTOMER digital technologies

Innovation

“those who cannot change their minds cannot change anything” George Bernard Shaw

How Organizations Create Value

business model - what is technology doing ? INDUSTRY SUPPLIER PARTNER NETWORK CUSTOMER RELATIONSHIPS + CORE VALUE CUSTOMER CAPABILITIES PROPOSITION SEGMENTS ACTIVITY DISTRIBUTION CONFIGURATION CHANNELS COST REVENUE STRUCTURE STREAMS _ DEMAND - CUSTOMER

sustaining

disruptive

consumer centric

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Empowered Consumers It’s all about the “You”

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact To Deliver Value Organizations Used To ...... Product - Build fences, own it all Price - Competition, supply - demand Place - Physical distribution Promotion - Sell, sell, sell ....Legacy of the Industrial Revolution

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact To Deliver Value Organizations Must Now...... Product = Experience, Co-Created Price = New Value Exchanges Place = Marriage of Digital & Physical 24/7 Promotion = Conversation or Engagement .... A New Way of Doing Things

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact C.K. Prahalad “World’s Most Inﬂuential Management Thinker” -Times of London 2007 “To successfully compete companies must reinvent their process & culture in order to sustain innovative solutions.”

orchestration

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Innovation = Value Creation

customer focus U’s Together = Community Centric

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact social media = new business models

To Innovate: Change How Organizations Work

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact New Methods, Roles & Models to Compete Integral Part of Organizational Capability

What’s Ahead predictions

1. non-facility competition will surge

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Merger of Technologies Including Social Media Will Create New Low Price Alternatives

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

Outside Industry Convergence

2. successful facility competitors will deliver new models

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Product = Experience, Co-Created Price = New Value Exchanges Place = Marriage of Digital & Physical 24/7 Promotion = Conversation or Engagement .... A New Way of Doing Things

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Hi-Tech Hi-Touch

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Financial Services Industry Measure is not # of Bank Branches

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact 24/7 Service & Support

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Adoption of Social Media Best Practices

3. “wellness” will increasingly emerge

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

Technological Innovation and the Fitness & Wellness Industry: Predicting the Impact Head - Traditional Fitness Industry Long Tail - New Wellness Space

Finally

“The greatest obstacle to progress is not ignorance. It’s the Illusion of knowledge. “ -Daniel Boorstin

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

is up to us......

think different

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

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Impact of technology on fitness industry - IHRSA 2010

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Impact of technology on fitness industry - IHRSA 2010 — Presentation Transcript