Lessons The Health Club Industry Can Learn From Struggling Retail Bricks & Mortar Brands

You heard the news last week of course, Best Buy is shuttering 50 locations. Conventional thinking says that bricks and mortar retailers, like Best Buy or Sears (here is a long nostalgic list of failed retailers to prove the point) are becoming dinosaurs. Online competitors, like Amazon, are the future because they don't have to invest in physical locations and offer better pricing and selection. Retailers argue that Amazon's competition is unfair because people don't pay sales tax and customers can come to their retail locations, obtain the information they need, and buy online. While the challenges faced by many retailers can be described as such, the real reasons they are failing, isn't about Amazon's unfair advantages. The key problem is that these retailers failed to understand that its about the customer and not about them. These competitors did not see what was coming as the result of technology and evolving customers. Therein lies a great lesson for the health club industry to learn.

The internet and technology in general is as daunting for retailers as it has been for health clubs. Have you been to a technologically advanced health club lately ? Enough said. The point is that while technology has been revolutionary for the retail industry, to consumers it has been mearly evolutionary. Before the Internet there were many alternative buying channels like cataolgues or infomericals. Online commerce was simply the next step in a logical progression; yet many bricks and mortar competitors didn't understand that and as a result they lost their chance to do something about it; this is the lesson the health club industry needs to make note of.

Moving online demands new thinking, new strategies and the integration of the digital and bricks and mortar experience around the customer. It takes new mindsets. But many bricks and mortar competitors, like Best Buy, squandered their ability to create a new distribution and customer service aparatus. Remember last Christmas and the debacle Best Buy created for its customers, as they missed many thousands of orders that were purchased online ? Amazon didn't have such problems. As @LarryDownes recently wrote in his Forbes article, "Why Best Buy Is Going Out Of Business....Gradually":

Amazon neither invented nor appropriated its basic strategies from Best Buy or anyone else.  It simply does what consumers want.  Best Buy does what would be most convenient for the company for consumers to want but don’t, then crosses its fingers and prays.  That’s not a strategy–or not a winning strategy, in any case, now that retail consumers aren’t stuck with the store closest to home.....(Larry goes on to say)...Best Buy is living in the corporate equivalent of what psychologists call a state of denial.  In business, that’s usually the first step in a failure that ends with a spectacular collapse.

Larry's right; doing what customers want is key and in a world of increasingly influential millennial consumers , more technology oriented buyers, consumers with expansive choices demanding better service; many many retailers simply don't get it. So what can this teach the health club industry ? To be successful brands must rethink the framework of bricks and mortar delivery and start understanding what the customer really wants and give it to them: namely seemless integration of the physical and digital experience. How? Check out this book, Unleashing the Killer App; Digital Strategies For Market Dominance, and check out these reports Change Or Die, 9 Things Fitness Industry Brands And Leaders Must Do as well as Industry Trends Health Club Leaders Should Be Watching. There is a bright future for those who can accept things are and will be radically different. For those who don't, they'll be going the way of Circuit City, Best Buy and others. There is no escaping the future; Digital Darwinism will catch them all.

So tell me Bryan O'Rourke, do you think the fitness and health club industry needs to change its mindset ? How do you think that will happen and what do you believe the bricks and mortar retail industry can teach us ?

Highlights From IHRSA 2012 - WOW

Wow, last week was quite an IHRSA event. I just penned a note of thanks to several IHRSA leaders because I thought this years convention in Los Angeles was really great. There were so many highlights I can't get to them all, but thought I'd share a few for those who might have been unable to attend.

First, Simon Sinek and Guy Kawasaki were super keynote speakers. A little tip for those who did not know is this; when you contribute to the IHRSA Industry Defense Fund, you get very special access to these speakers, literally almost one on one. So consider making a contribution today before IHRSA 2013.

Second, a roundtable conducted by the people from Virtual Fitness Planner and InTouch featured a panel of 5 of the leading club operators in North America. It was exceptional and the room was packed. Thankfully I got to participate along with super stars like Patch Evans, Rich Drengberg, Mark Miller and Jamie Nelson. Daron Allen and his team created an interesting exchange centered around my recent research, The 2012 Trend Report - 12 Interesting Trends That Health Club & Fitness Leaders Should Keep An Eye On - hit the link and you can get a free copy. The tools that Virtual Fitness Planner and InTouch introduced are pretty cool. Check it out.

I really enjoyed attending a wonderful dinner Thursday night, hosted by Michael Bruno, owner of Land America, Star Trac Fitness, Core Health and Fitness and StairMaster - Schwinn, among others. Michael and his wife Lin Qing are the most gracious hosts one could ever meet. Attending were the who's who of the health club and fitness industry at one of the most touted Italian restaurants in North America. My partner, Robert Dyer, was there along with the Lynne and Victor Brick, Mark Smith, Tony de Leede, Patch Evans, John Baudhuin, Ed Trainer, Sal Pelegrino and many many others.

What IHRSA would not be complete without visiting with our Gold's Gym Friends and the GGFA team. It was good to see CEO Jim Snow, our friend Tim Keightley and others. Another great GGFA event hosted by Ginger Collins. Thanks to the Gold's Franchise community.

Finally, I can't forget to mention my visit with Bud Rockhill, CEO of Spectrum Athletic Clubs, one of the best operators I've met as well as Phillip Mills CEO of Les Mills, who always has something engaging to discuss.

Well that was only a taste of the fun filled and educational convention that IHRSA 2012 was. My thanks go out to Joe Moore, Pam O'Donnell and Meredith Poppler, to name a few, and all of the IHRSA staff for their hard work in making this a memorable event. Please attend next year and let me, Bryan O'Rourke, know, what did you think about IHRSA 2012 ? I'd love to know if it you thought it was as great an event as I did.

About the author

Bryan O’Rourke is a health club industry expert, technologist, financier, and shareholder and executive in several fitness companies. He consults with global brands, serves as a member of the GGFA Think Tank is Chair of the Medical Fitness Association’s Education Committee, is President of the Fitness Industry Technology Council and a partner in Fitmarc, Integerus, Fitsomo and the Flywheel Group. To learn more contact Bryan here today .

IHRSA 2012 - A Big Week Ahead

Its always a pleasure and privledge to attend IHRSA's annual conference, and this year is no exception. Its a full week meeting with everyone from Michael Bruno, fitness manufacturing icon and legend, my partner and health club guru Robert Dyer, our Fitmarc team, the Les Mills team and many other leaders in the fitness and health club industry like Brent Hallo, Lisa and Nigel Champion, Lauretta Stace , Sal Pellegrino, Ginger Collins and many many others.

Make sure you stop by the Star Trac booth (they've got some pretty cool stuff there this year) and the Les Mills booth to see the latest in group fitness. Please consider attending The Next New Thing, Wednesday from 2:00 - 3:30 pm where I'm on a panel with Patch Evans and others discussing key trends. You should also check out the Fit-C group on Wednesday afternoon (room 301 A) to learn why technology standards are so important to future growth in the business. The list of opportunities to learn and participate at IHRSA 2012 goes on and on.

I hope you are able to attend IHRSA this year and if so please feel free to reach out to me Bryan@fitmarc.com or via social media @bryankorourke and tell me, Bryan O'Rourke, what do you or did you think about IHRSA 2012 ? If you can't attend let me know what it is I  can learn for you and I'll share it during or after the show !

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, and shareholder and executive in several fitness companies. He consults with numerous global brands, serves as a member of the GGFA Think Tank, is Chair of the Medical Fitness Association’s Education Committee and a partner in the Flywheel Group. To learn more contact Bryan here today .

The Coming Golden Age Of Health & Fitness - Abundance

In the Australian Fitness Network Magazine's upcoming Autumn 2012 edition, I had the privilege of contributing a piece for their "Perspectives" segment. Without giving away the contents of the article which will be released soon, I'll include a small portion, "the fitness industry in on the brink of a golden age, one involving tremendous change wrought with risk for those unable to see what's coming and opportunity for forward-looking professionals who do."

Whether its the health club bifurcation trend, my thinking on the maturity of extant bricks and mortar delivery or the view of how creative destruction is going to remake health and fitness in general, hopefully readers understand that I think technology, global ism and shifting demographics are revolutionizing the industry.

I think some might believe this thinking is negative (I've heard the talk). As my friend and colleague Michael Scott Scudder recently shared with me, "your writings are on-target, even though tough to digest." In reflecting on Michael's digestion point, I wanted to make sure people knew how optimistic I really am by providing some perspective. Pain will always come from change. Hence my writings on Digital Darwinism. But things are really looking up. So to prove this point, I thought some more capable people could do it for me.

Enter the recent book by Peter Diamandis and Steven Kotler titled, Abundance : The Future Is Better Than You Think. You see participants who think the view that creative destruction is a negative should consider its all how you look at it - from the position of scarcity or abundance.

Abundance, a New York Times best seller that was only recently released, it shares the view that there is real reason to be optimstic as the result of a number of trends. They specifically list 4 drivers and the video below does a great job of setting forth a positive view of the future. Watch the video below to learn more and check it out. When I say the health, fitness and even medical industries are in the midst of fundamental revolution I mean it; and that's not a bad thing - its a great thing.

So what do you think ? Do you think the health club and fitness business is going through a positive revolution ? Do you concur with the views of Abundance ? Please contact me Bryan O'Rourke and share your thoughts. I'd love to hear from you.

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, and shareholder and executive in several fitness companies. He consults with global brands, serves as a member of the GGFA Think Tank is Chair of the Medical Fitness Association’s Education Committee, is President of the Fitness Industry Technology Council and a partner in Fitmarc, Integerus, Fitsomo and the Flywheel Group. To learn more contact Bryan here today .

Entrepreneur - Be Careful Using The Term

Before I start I'll ask, "Does anyone think this kid looks like me ?" Well at one point he might have, but things change. I'm not so cute anymore. What does this have to do with using the term Entrepreneur ? Well as cute as this little one can be, he also can throw tantrums and display bad behavior. After reading Isaacson's recent book on Steve Jobs and given other experiences I'll share, I wanted to address what has become an important question in my mind; "do successful entrepreneurs need to be jerks?" I don't think so.

Entrepreneur is a term applied to one willing to help launch a new venture and accept full responsibility for the outcome. The use of the term has soared in the past few decades with the rise of the celebrity entrepreneur and their associated rise to riches and fame. I've had my dealings with several of them. I'm not naming names because I don't want to seem like a kiss ass to those I admire or point out the few whom I dislike.

I think the term "Entrepreneur" is over used and misunderstood. There is something really important to note about this, especially regarding the high profile ones of today. You see all "entrepreneurs" are not the same and regrettably the title has been used by some if not many as an excuse for a variety of bad behaviors. Like the cute little guy, some are good at being very very bad.

Most agree one should never act unethically, deceitfully or abusively no matter what greater purpose is believed to exist. Many self proclaimed entrepreneurs, however do because they don't think rules apply to them. How many actually read the Isaacson book? Here are 16 examples of Jobs being a jerk. People from Madoff to Hitler could be characterized as an entrepreneur at some point and I don't think they were meant to be included under the definition. Unfortunately popular thinking about the celebrity “entrepreneur” today often promotes the importance of ego driven people valued for fame, wealth or genius with few ethics. They might take the definition and use it to their benefit. This is the antithesis of many quality entrepreneurs as some are quite employable, unspoiled and don't necessarily see their world dominated by rejection or denial. In fact some of the most humble people are social entrepreneurs changing the world.

The disturbing and irritating behavior exhibited by some entrepreneurs may be innocent in some visionaries minds while criminal in reality. The visions they promote are sometimes delusions of grandeur not purposeful innovation. While success can be achieved even by those being bad, often its through taking credit for other's efforts and even worse by fraud. Recent history bares this out. See lies entrepreneurs tell. It is rare, however, to see organizations establish sustained success, because it is much harder to achieve. It requires many stakeholders working together as you know; not one individual ruthlessly driving the train, particularly when and if they're wrong .

Characterizing entrepreneurs in the modern sense leaves out the altruistic, or those who avoid conflict and disturbing actions, or put others first and their fame, and ego last. You see the most successful ones are rarely if ever on the front page of magazines, although they arguably have the biggest impacts. That most don’t know Dennis Ritchie is a case in point; he died the same month as Steve Jobs and hardly anyone knew, yet his impact on the world of technology was arguably more profound than Apple's founder. I don’t think the fact that Dennis was unknown, low key or did not feel as though he was in conflict with the world makes his contributions less valuable. He was just a great technologist and software genius.

The world needs to oppose the "entrepreneur" who rationalizes bad behavior because they know what's best for everyone else. These types are at the root of the biggest problems in society today. It reflects "ends justifies the means" thinking creating problems from the recent financial crisis and BP oil spill to wars and other disasters that ordinary people are left to clean up. It sometimes leads to short cuts, the convenient dismissals of prior commitments or the fudging of truth; these among other behaviors that destroy organizations large and small everyday. This type of "entrepreneur" is often too proud and self serving to admit they are in over their heads and to selfish to turn over the reins. It would require admitting that they don't have all the answers or result in dire consequences from being found out. After all problems are never their fault , its everyone else who just gets in their way.

Their accomplices, people who know better and stand bye silently because they don't have the gumption to speak up, think “who cares”, no one will listen anyway. It reminds me of Frederick from the Woody Allen movie Hannah and Her Sisters when he says; "You missed a very dull TV show on Auschwitz. More gruesome film clips and more puzzled intellectuals declaring their mystification over the systematic murder of millions. The reason they can never answer the question ‘How could it possibly happen’ is that it's the wrong question. Given what people are, the question is, why doesn't is happen more often?". Sadly it happens everyday and its up to good people to stand up, point it out and say something, even if its about an “entrepreneur.”

The bottom line is that all entrepreneurs are the same. Who they are and their experiences can vary widely. Some are good,  others evil and some in between. In the end they really are just like everyone else so maybe we shouldn’t give people with the title such a wide row to mow. Being one is never an excuse for being a jerk.

In light of this post I share these articles. One from Maccoby in HBR, "Narcissistic Leaders: The Incredible Pros and The Inevitable Cons" which explains a lot about some "entrepreneurs". The other article is from Anthony in HBR, "Don't Confuse Passion With Competence"  . The road to hell is always paved with good intentions and to the extent anyone is asking for sympathy for the poor entrepreneur, well I say do something more useful and “get off the cross, the world needs the wood.”

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, and shareholder and executive in several fitness companies. He consults with numerous global brands, serves as a member of the GGFA Think Tank is Chair of the Medical Fitness Association’s Education Committee and a partner in the Flywheel Group. To learn more contact Bryan here today .