Poised For Growth. Digital And The Future Of A Rapidly Expanding Fitness Industry. Wexer FIT-C London Technology Summit 2016

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Technology in convergence with other trends is driving an explosion in the demand for fitness products and services. Presented by Bryan O'Rourke at the IceTank in London in November of 2016 with health club and fitness industry leaders from across Europe, this presentation outlines how technology is impacting the global health club and fitness industry.

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Poised For Growth. Digital And The Future Of A Rapidly Expanding Fitness Industry. Wexer FIT-C London Technology Summit 2016

  1. 1. Poised for Growth Digital And The Future of a Rapidly Expanding Fitness Industry Bryan K. O’Rourke @WexerVirtual @Fittechcouncil Ice Tank, London 2016
  2. 2. poised for growth disruptive forces are driving trends that are reshaping our world and our industry for the better
  3. 3. poised for growth: the better the question. the better the answer. the better our industry works. WHY ? 1 BILLION 2025
  4. 4. SAPERE VEDERE DA VINCI poised for growth: we must think differently. believing is seeing.
  5. 5. massive change… rising tides will lift some more than others
  6. 6. DISRUPTION WHAT IS THE NEW NORM ?
  7. 7. RESTAURANTS OFFER A DINNING EXPERIENCE
  8. 8. THIS APP OFFERS A DINING EXPERIENCE
  9. 9. BANKS OFFER FINANCIAL SERVICES
  10. 10. THIS APP OFFERS FINANCIAL SERVICES
  11. 11. THIS CLINIC OFFERS MEDICAL CARE
  12. 12. THIS APP OFFERS MEDICAL CARE
  13. 13. HEALTH CLUBS OFFER HEALTH & FITNESS EXPERIENCES
  14. 14. THIS OFFERS HEALTH & FITNESS EXPERIENCES
  15. 15. THIS OFFERS HEALTH & FITNESS EXPERIENCES
  16. 16. THIS OFFERS FITNESS EXPERIENCES TO
  17. 17. WE MUST RETHINK WHAT DEFINES OUR “INDUSTRY”
  18. 18. what are “fitness experiences” becoming ?
  19. 19. how will the “industry” evolve ?
  20. 20. what will “members” want ?
  21. 21. 4TH INDUSTRIAL REVOLUTION- CYBER PHYSICAL SYSTEMS
  22. 22. WE MUST APPLY FRESH THINKING TO SUCCEED AND REACH OUR POTENTIAL
  23. 23. PEOPLE TECHNOLOGY GLOBALISM ECONOMICS WHY DISRUPTION ? 4 CONVERGENCE DRIVERS
  24. 24. PEOPLE HEALTH & FITNESS INDUSTRY CONVERGENCE DRIVERS
  25. 25. old school definitions don’t apply - dizzying diversity
  26. 26. bifurcation : mass affluence driving niche luxury models and middle class driving utility businesses.
  27. 27. urbanization : cities are driving global growth and represent the majority of health club operations.
  28. 28. power has shifted to fitness consumers convenience, authenticity, choice rule decision making exane : 10% luxury is digital now 40% by 2020
  29. 29. fitness experiences are user experiences (ux) 3 key “people” or “consumer” trends
  30. 30. GREATER UTILITY AND CONVENIENCE & RELEVANCE FOR USERS PERSONALIZATION ACKNOWLEDGEMENT AND RECOGNITION EMBRACING A MISSION ENGAGEMENT FLAUNT CULTURE NOT JUST FITNESS BENEFICIAL INTELLIGENCE NEW WAYS OF DELIVERY THAT INCREASE USE AND RELEVANCE SERVICE REDEFINITION OMNI-PRESENCE TRENDS + VISION = REINVENTING MODELS 3 KEY CONSUMER TRENDS PERSPECTIVE SHIFT STATUS
  31. 31. personalization: greater utility, convenience & relevance VALUE
  32. 32. BENEFICIAL INTELLIGENCE Enhancing User Experience Through Built In Intelligence
  33. 33. OMNIPRESENCE New Channels, Nuanced With Context In The Right Place At The Right Time
  34. 34. engagement: acknowledgement recognition mission EMOTION
  35. 35. STATUS: Experiences Via Design, Gamifying, UX, Community
  36. 36. FLAUNT CULTURE Allow Users To Remove Barriers And Celebrate And Flaunt An Authentic Transparent Experience
  37. 37. service redefinition : delivering new and different MODEL
  38. 38. PERSPECTIVE SHIFT: Reposition Renew, and Refresh Service Offerings In New Ways
  39. 39. NOT JUST FITNESS: Lifestyle, Mindset, Nutrition, Holistic, Longevity
  40. 40. GREATER UTILITY AND CONVENIENCE FOR USERS PERSONALIZATION ACKNOWLEDGEMENT AND RECOGNITION EMBRACING A MISSION ENGAGEMENT FLAUNT CULTURE NOT JUST FITNESS BENEFICIAL INTELLIGENCE NEW WAYS OF DELIVERY THAT INCREASE USE AND RELEVANCE SERVICE DEFINITIONS OMNI-PRESENCE TRENDS + VISION + TECH REINVENTING MODELS 3 KEY CONSUMER TRENDS PERSPECTIVE SHIFT STATUS
  41. 41. PEOPLE TECHNOLOGY GLOBALISM ECONOMICS WHY DISRUPTION ? 4 CONVERGENCE DRIVERS
  42. 42. HEALTH CLUB INDUSTRY CONVERGENCE DRIVERS TECHNOLOGY
  43. 43. @Bryankorourke @WexerVirtual
  44. 44. the greatest products of the next 20 years have not been created yet. Kevin Kelly
  45. 45. Kevin Kelly’s View Of What Will Happen With Technology 12 Inevitable Forces 51 01 Becoming 02 Cognifying 03 Flowing 04 Screening 05 Accessing 06 Sharing Move from fixed products to constant upgraded services and subscriptions. Make everything smarter via cheap AI from the cloud. Unstoppable streaming. You are certainly now in the data business. Turning all surfaces into screen experiences. Access to services at all times move away from owning assets. Mass-scale collaboration. Key innovations built on sharing. BE CO FL SC AC SH
  46. 46. SCREEN
  47. 47. SCREEN
  48. 48. AC & CO
  49. 49. 12 Inevitable Forces 57 07 Filtering 08 Remixing 09 Interacting 10 Tracking 11 Questioning 12 Beginning Harnessing intense personalization to anticipate desires. Unbundling products and basic parts and recombining them in all possible ways. Immersing ourselves inside computers to maximize engagement. Total surveillance for consumer and citizens benefit. Promoting good questions is far more valuable than good answers. A system connecting all humans and machines in a global mix. Kevin Kelly’s View Of What Will Happen With Technology FI RE IN TR QU BG
  50. 50. 4TH INDUSTRIAL REVOLUTION- CYBER PHYSICAL SYSTEMS THE HOLOS CHOICE
  51. 51. PEOPLE TECHNOLOGY GLOBALISM ECONOMICS WHYT DISRUPTION ? 4 CONVERGENCE DRIVERS
  52. 52. HEALTH CLUB INDUSTRY CONVERGENCE DRIVERS ECONOMICS
  53. 53. CONVERGENCE DRIVERS RESULT IN DIVERGENT MODELS
  54. 54. divergence means new delivery systems to meet consumer needs in new ways (workout drone).
  55. 55. breaks down return on equity into 3 parts. Donaldson Brown invented formula in 1912 ROE Explains Industry Landscape
  56. 56. Profit Margin Dupont Formula : Return On Equity 66 EBITDA SALES ASSETS EQUITY SALES ASSETS Asset Turnover Equity Multiplier X X
  57. 57. Profit Margin Dupont: Return On Assets Where the Growth Is 67 EBITDA SALES $3M AVG SALES $3M AVG Asset Turnover X =53% 100% 53%
  58. 58. Profit Margin 68 EBITDA SALES ASSETS $1.6M AVG SALES $1.6M AVG Asset Turnover X =34% 100% 34% Dupont: Return On Assets Where the Growth Is
  59. 59. key economic drivers: lower operating costs and increasing revenue per member and lifetime value of member
  60. 60. 8 Distinct Fitness Delivery Channels Health Club Models 70 High End Full Service Middle Market Low Price HV Boutique Full Service, Full Amenities, Higher Prices, Digital Integration Financially Challenged, Low Pricing Power, Legacy Burden Hi-Growth Space, Low-Cost, Low- Service, Upcoming Digital, Lower Markets Program Focused, Cross Over Lifestyle, Multiple Monetization, Omni-Channel
  61. 61. Health Club Models 71 Fitness Community Pure Digital Medically Integrated Alternative Models Outdoors, Indoors, Lifestyle. Connection, Data Driven, Streaming Content, Anywhere Anytime,Home Market and More Outcomes Based, Integrated, Population Health Corporate, Multi- Family, Alternative Models 8 Distinct Fitness Delivery Channels
  62. 62. CONSOLIDATION AND REENGINEERING - S CURVE 72 Bricks & Mortar Biz ModelsKey Driver Is Profitability DIGITAL OMNICHANNEL MEDICAL BOUTIQUE LIFESTYLE COMMUNITY
  63. 63. Business Models Will Merge Different Aspects Of Each Of These With ALL INCLUDING DIGITAL COMPONENTS Merging Of Offerings - Key Digital 73 High End Full Service Community Digital Medically Integrated Middle Market Low Price High Value Boutique Alternative
  64. 64. digital creates new economics by being able to deliver experience without variable costs and more.
  65. 65. growing market: sick care is not sustainable and public primary prevention is the answer. technology will help.
  66. 66. Personalized Primary Prevention Is Here - DNA
  67. 67. S CURVE: THE WAY WE SEE THE INDUSTRY MUST SHIFT
  68. 68. PEOPLE TECHNOLOGY GLOBALISM ECONOMICS WHY DISRUPTION ? 4 CONVERGENCE DRIVERS
  69. 69. HEALTH & FITNESS INDUSTRY CONVERGENCE DRIVERS GLOBALISM
  70. 70. how we operate and invest must be mindful of sustainability
  71. 71. we must cooperate globally to impact policies that address the huge risk and opportunity of global health
  72. 72. we must globally share our insights and cultural diversity to drive innovation and success
  73. 73. poised for growth disruptive forces are driving trends that are reshaping our world and our industry for the better
  74. 74. SAPERE VEDERE DA VINCI poised for growth: we must think differently. believing is seeing.
  75. 75. PEOPLE TECHNOLOGY GLOBALISM ECONOMICS WHY DISRUPTION ? 4 CONVERGENCE DRIVERS
  76. 76. the greatest products of the next 20 years have not been created yet. Kevin Kelly
  77. 77. ASK THE RIGHT QUESTIONS
  78. 78. SEIZE THE UPSIDE OF DISRUPTION
  79. 79. Poised for Growth Digital And The Future of a Rapidly Expanding Fitness Industry Bryan K. O’Rourke @WexerVirtual @Fittechcouncil Ice Tank, London 2016

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