{"id":567,"date":"2015-09-13T21:49:46","date_gmt":"2015-09-14T01:49:46","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/weight-watchers-the-real-biggest-loser\/"},"modified":"2015-09-13T21:49:46","modified_gmt":"2015-09-14T01:49:46","slug":"weight-watchers-the-real-biggest-loser","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/weight-watchers-the-real-biggest-loser\/","title":{"rendered":"Weight Watchers: The Real Biggest Loser?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" src=\"http:\/\/static.cdn-seekingalpha.com\/uploads\/2015\/8\/7372321_14391530971380_rId7.jpg\" alt=\"\" width=\"509\" height=\"209\" \/><\/p>\n<p>In this rapidly shifting era of digital transformation for health, personal fitness, and weight loss, Weight Watchers has unfortunately responded far too slowly and incrementally to keep pursuit with digital innovations that will likely render it obsolete.<\/p>\n<p>Created in 1961, Weight Watchers has a solid history of weight loss support centers, food products, and diet programs to help the 70% of Americans who are overweight or obese to lose weight. The weight-loss industry is booming and seems to be growing rapidly as changing forms of transportation, sedentary work habits, and poor nutrition run rampant in American society.<\/p>\n<p>Unfortunately, Weight Watcher\u2019s stock has posted a <strong>78% decline<\/strong> in the past three years and quarterly <strong>revenue has declined for the past eight periods<\/strong>. In the last quarter alone, <strong>membership has declined 15%,<\/strong> and Weight Watchers was among the most-shorted stocks on the NYSE in February of 2015 (Bloomberg).<\/p>\n<p>So how did Weight Watchers fail to capitalize on these trends? They went wrong in <strong>three key digital transformations<\/strong> of the weight-loss industry: Shifting competition, shifting technology, and shifting consumer demand.<\/p>\n<p><strong>Shifting competition:<\/strong><\/p>\n<ul>\n<li>Weight Watchers failed to predict, acknowledge, or respond to competitive signals from players who digitized and revolutionized the weight-loss industry. <strong>As late as 2013, CEO David Kirchhoff claimed he didn\u2019t see wearable devices &#8212; along with social media and other technologies &#8212; as a threat.<\/strong> The reality? Over 51 million American adults are using digital applications to track their health. Weight Watchers has just over 2 million current subscribers. Oops.<\/li>\n<li>FitBit, Calorie Counter, My Fitness Pal, Google Fit, Jawbone, FuelBand, and <em>countless<\/em> other <strong>free<\/strong> applications, fitness tracking gadgets, and websites have revolutionized the weight-loss industry by providing continuous monitoring, data aggregation, customized analysis, and daily goal-setting for millions of Americans from the convenience of their smartphone. By not <strong>expecting<\/strong> these competitors to transform industry dynamics, Weight Watchers missed a critical opportunity to get ahead of the competition and transform their business model into something consumers could get behind: the trusted name of Weight Watchers in a newly digital setting.<\/li>\n<\/ul>\n<p><strong>Shifting technology:<\/strong><\/p>\n<ul>\n<li>Weight Watchers mistakenly assumed consumers would still want in-person support, group meetings, customized counseling, and food product delivery from them, even if mobile apps or fitness gadgets entered the scene. What they didn\u2019t anticipate is the digital revolution in weight-loss meant that customers could get all of those same things for a much lower price, all in a one-stop shop. These new technologies don\u2019t stop at helping customers track weight loss, customize fitness goals, and provide new recipes \u2013 they integrate with other devices to offer feedback on how much sleep consumers are getting at night and when to wake up to feel their best all day.<\/li>\n<li>Last year, Weight Watchers finally acknowledged how the proliferation of new weight loss technology was impacting their bottom line, and scrambled to make their website and programs compatible with fitness tracking devices consumers already owned (such as FitBits). Weight Watchers introduced online support and programming for a $20\/month subscription after an initial fee. Their new ActiveLink gadget tries to combine all the elements of sleep monitoring and caloric intake but pales in comparison to other products on the market. The related app has ten thousand downloads. FitBit has 10 million. Ten other random weight loss tracking apps on Google Play showed over 1 million downloads. Too little, too late.<\/li>\n<\/ul>\n<p><strong>Shifting consumer demand<\/strong>.<\/p>\n<ul>\n<li>Weight Watchers failed to understand the shift to modern and digital behavior in their consumer base and understand the mentality of millennials. Millennials want to feel empowered to do it themselves, to feel part of a global community, and to track their progress and goals from the flick of a thumb on a screen or the press of a button on their watch. They also haven\u2019t been effective at showing <strong>results <\/strong>&#8211; something that ever-savvy consumers today need to see. BusinessWeek Insider reports that Weight Watchers isn\u2019t necessarily even that effective: \u201cThe program costs the average user about $377 a year and results in a weight loss of only 5 pounds.\u201d<\/li>\n<li>Weight Watchers also failed to predict how sticking to their 50\u2013year weight loss programs would make it challenging to incorporate new research on nutrition and dieting into their offering. They suffered a similar decline in revenue and membership during the low-carb diet fads in the early 2000s. By not creating a dynamic and digital business model that could put forth new research and trends into their weight loss programs, Weight Watchers further alienates themselves from the new generation of value-capturing weight loss tools.<\/li>\n<\/ul>\n<p><strong>It\u2019s not all bad. <\/strong>The one good move Weight Watchers has made this past year to try to launch a comeback was to partner with large health plans such as Humana to offer employee weight-loss and wellness support programs to large employers at discounted rates. This is one setting where Weight Watchers\u2019 more comprehensive offerings may be appealing to employers. Is it enough? We\u2019ll have to wait and see, but it is likely that <strong>Weight Watchers will remain the biggest loser in the digital transformation of weight loss in America.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weight Watchers is the biggest loser in the ever-increasing digitization of the weight-loss and personal fitness industries. <\/p>\n","protected":false},"author":120,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-567","hck-submission","type-hck-submission","status-publish","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-and-losers\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Weight Watchers: The Real Biggest Loser? - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/weight-watchers-the-real-biggest-loser\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Weight Watchers: The Real Biggest Loser? 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