IHRSA 2010 presentation on the impact of technology on the fitness industry showing key trends in technology, business model evolution, innovation and predictions for the future

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

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

4. Thanks Technology
Seth Myers

5. broad

6. 4

7. Key Trends

8. Biz Models

9. Innovation

10. Predictions:
Consumers &
Facilities

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

14. think different

15. No Crystal Ball

18. Different

19. <3>
demography technology
globalism
revolution
convergence & divergence

21. 1st
key
technology
trends

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

23. 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.

24. 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.

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

26. 1,2,3,4,5,6,7,8,9,10.......
2, 4, 16, 256............

28. 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.

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

31. 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.

32. 15 Billion
by 2015

33. 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.

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

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

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

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

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

41. Merger of
emotiv
Physical &
Digital
natal

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

49. 2

50. Biz Models

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

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

57. 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

59. 2009 U.S. Market
(US health care $2.6 trillion)
1%
99%
Fitness Facilities Health Care

60. 17%

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

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

66. PRIZM
Consumers
66 Groups

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

68. "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/

69. Demand
Industry Convergence

70. supply side
Li & Fung Group clothing

72. movie theaters
arcades
record
stores

76. Economics of Free

78. 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

79. 3

80. Innovation

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

82. How Organizations
Create Value

83. 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

85. sustaining

86. disruptive

87. consumer
centric

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

89. 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

90. 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

91. 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.”

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

93. N=1

95. R=G

96. orchestration

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

98. customer focus
U’s Together =
Community
Centric

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

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

102. To Innovate:
Change How
Organizations Work

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

105. 4

106. What’s Ahead
predictions

107. 1. non-facility
competition will surge

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

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

112. Outside
Industry Convergence

113. 2. successful facility
competitors will deliver
new models

114. 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

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

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

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

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

119. 3. “wellness” will
increasingly emerge

120. 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

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

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

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

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

125. Finally

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

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

128. is up to us......

129. think different

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