Fitness and technology have been on my mind lately.
We are living in an information age where immediate data is an influencer not only in business but also our personal lives. I recently purchased a wearable fitness device that in some ways is changing my workout habits. (I'll write more about that experience in a future blog post.)
The fitness wearable device market is hyper competitive, constantly changing and growing. More and more consumers are discovering these devices, and manufacturers are aggressively looking to take a bigger piece of that consumer market share. There will inevitably be more opportunities for clubs to connect with members by taking advantage of this trend.
In July, I wrote about Garmin's strategy for "more aggressive pricing" and "higher advertising expenses" in the fitness wearable device market this fall. Revenue in Garmin's fitness segment was $568.5 million in 2014.
The latest look at the growth in this area comes in a report released last week by the International Data Corporation (IDC), a global provider of market intelligence, advisory services and events for the IT, telecommunications and consumer tech markets.
The most notable number: Fitness wearable vendors shipped 18.1 million devices in the second quarter compared to 5.6 million in the second quarter of 2014 (an increase of 223.2 percent).
Fitbit held the largest market share (24.3 percent) among single brands in the second quarter, but there are signs its grip is slipping. Let's take a look at the San Francisco company's recent ride on Wall Street.
Fitbit, which reported $400.4 million in second quarter revenue, went public on the New York Stock Exchange in June at $20 per share and quickly became a darling among investors. It soared to a high of $51.90 per share on Aug. 5, but has fallen considerably since then and closed at $32.89 per share on Tuesday. It was Fitbit's lowest close since June 29.
Why the drop?
Investors could be turning sour on Fitbit based on the IDC report, which noted the Apple Watch shipped 3.6 million units in the second quarter of 2015, just 800,000 behind Fitbit's 4.4 million units.
"(Apple's) participation benefits multiple players and platforms within the wearables ecosystem, and ultimately drives total volumes higher," IDC Wearables Research Manager Ramon Llamas said in a statement. "Apple also forces other vendors – especially those that have been part of this market for multiple quarters – to re-evaluate their products and experiences. Fairly or not, Apple will become the stick against which other wearables are measured, and competing vendors need to stay current or ahead of Apple. Now that Apple is officially a part of the wearables market, everyone will be watching to see what other wearable devices it decides to launch, such as smart glasses or hearables."
Look no further than Samsung's new Gear S2 watch device to back up Llamas' statement. Like the Apple Watch, the Gear S2 will need to be paired with a Samsung smartphone (and only a Samsung smartphone) to perform most of its functions, according to a Fortune report.
Here are more interesting numbers from the IDC report:
- Fitbit's year-over-year market share dropped from 30.4 percent to 24.3 percent.
- Apple's market share in the second quarter of 2015 was 19.9 percent.
- Garmin's year-over-year market share dropped from 8.9 percent to 3.9 percent.
- Samsung year-over-year market share dropped from 14.3 percent to 3.3 percent.
Here is a look at the worldwide second quarter market share from IDC:
As a recent consumer in this market, I can tell you there is a noticeable gap in the capabilities between devices. Two camps seem to exist when it comes to fitness wearables: basic step count functions and multi-activity functions. The IDC appears to see the same thing.
"That (function) gap is expected to widen over time," the IDC said. "For vendors focused on basic wearables, the challenge will be to compete with the additional features offered by smart wearables while still turning a profit in the price sensitive basic wearables market."
The IDC's report got the attention of CNBC and TheStreet analyst Jim Cramer, who touched on the fitness market in answering questions from Twitter on Monday. Cramer said the second operating system of the Apple watch coming this fall will target a more athletic consumer, adding that Fitbit should team with Nike or Under Armour.
How can you reach this audience in your club with all of these devices flooding the consumer market?
I don't have the definitive answer. The basic application I can see are clients sharing device data with doctors and personal trainers to set goals, develop workout programs and target benchmarks based on the data.
Are you connecting with this audience in a unique way at your club?
Please share your experience in the comments section below.