Blood, Sweat and Data: The Fitness Industry Is Ready for Digital Disruption

Fifty years ago, the fitness industry was the epitome of a niche market, with gyms as sparse as their patrons. But times have changed, and with those changing times has come growth. The industry is now valued at over $90 billion. Franchises like Crunch Fitness and Gold’s Gym are packed with fitness buffs and weekend warriors. Workout-centric companies such as SoulCycle and Pure Barre have devoted followings. There are even activity trackers, such as the FitBit and an app on the Apple Watch, to make exercise more personal. All of this, plus some predictions forecast an industry growth of 20 percent in the coming years.

But some hurdles remain. Retention rates for gyms hover around 50 percent, and attracting and engaging new members is an increasing challenge, especially in a crowded market. What these hurdles and challenges point to, though, is an opportunity for a tremendous digital disruption.

How will it come?

Early Fitness Technology Leaders

Gone are the days of workouts beginning and ending with a set of rusty lead weights in a basement. A number of businesses and startup tech companies are already flexing their muscle when it comes to fitness technology.

Members heart rates are projected onto a large screen for direct digital feedback in Orange Theory Fitness classes. Participants are encouraged to keep their heart rates in the “orange zone” during a specific amount of time.

Fitness technology provides instant feedback to members.
Fitness technology allows you to get digital feedback of your heart rate while you’re working out. It is projected to a large screen, so there’s no more guessing game.

SoulCycle has revolutionized stationary bicycle fitness through immersion in unique visual and musical experiences. They extend this experience outside the gym through playlist sharing on their mobile app.

The video-streaming stationary bicycle company Peloton is estimated to be worth $4 billion. A Peloton bike can be bought and installed in a home, and it has a 22-inch HD screen and remote trainer offerings.

While these types of fitness technology are exciting, they are likely just a hint of things to come.

New Fitness Tech Players Raising the Bar

Digital technology is disrupting many industries, and some see the fitness industry as lagging behind in this regard. But different companies have different takes on how the fitness industry will evolve. Three new startups offer their own version of how they envision the future.

Tonal This San Francisco-based startup combines software, an LED screen, and electromagnetic weights to revolutionize home fitness. The uniquely compact weight system hangs on your wall and automatically adjusts resistance based on goals, ability and commitment levels. As CEO Aly Orady has described, “We didn’t just take a weight system and put a sensor on it. We’re fundamentally reinventing strength training.”

Tonal CEO Aly Orady Discusses Strength Training and future of fitness technology
Tonal CEO Aly Orady Discusses Strength Training

Mirror This fitness technology company provides a product that appears exactly like its name… a mirror. But this mirror streams on-demand, personalized workouts such as yoga, Pilates, boxing and more. The company is now offering video streaming to more than 50 live classes a week, one-on-one training is available for additional fees. The company also expects to expand the use of Mirror into fashion, meditation and beauty areas.

Holodia This new fitness technology startup takes things a bit further into the digital realm than the rest. CEO and founder Olivier Zitvogel believes virtual reality and social gaming is the future of the fitness industry. As such, Holodia provides fitness technology platforms that allow users to escape into worlds far away, both real and fantasy, for their workout experience. Users can cycle through exotic lands, and they can compete with others through social gaming.

Shifting Gears to Less Expensive Options

While these new revolutionary fitness technologies are cool, they do not come cheap. For example, Tonal starts at $2995 for the wall-based weight system, along with a $49 monthly subscription fee. Mirror requires an investment of $1495 for the interactive reflection, as well as a $39 monthly fee. With the success of Peloton, which is comparable in price, these startups envision similar consumer markets for their products.

But others in the fitness industry disagree. Instead, they see wearable technologies, smartphones and mobile apps leading the change.

a man holding a phone and a woman exercising using fitness technology in their workout
Bold Technological Steps are Taken in the Fitness Industry

Nautilus and Bowflex both offer home systems that come with free mobile apps and many similar features. Likewise, Netpulse provides both health equipment as well as mobile app-connection capabilities.

The Real Game Changer for the Fitness Industry

Digital Disruption in The Fitness Industry

While the immediate future for fitness technology remains unclear, long-term predictions are easier to pin down.

With artificial intelligence and data management evolving quickly, the fitness industry will undoubtedly have to embrace these technologies.

Lifebeam already sells an AI-based personal trainer that communicates with users through headphones and voice recognition. Such systems can be easily upgraded with the latest in behavioral science, physiology, and bio-scanning. This means they will offer better training that is more personalized and less expensive.

The personal trainer as we know it, shouting encouragement as you do your reps, will likely be a thing of the past.

It’s All About the Data and Scalability in the Fitness Industry

With wearable technologies advancing rapidly, and personalized fitness data exploding, tremendous opportunities exist. The current problem is the inability of the fitness industry to handle all of this data and integrate it effectively.

Tonal and traditional fitness

If the fitness industry can develop platforms and fitness technologies to manage this data, tremendous disruptions will occur.

Gains have been made with innovative fitness platforms. But a much larger shift integrating technology and fitness is likely.

Will it be enough to keep us active and fit? That has always been the billion-dollar question for the fitness industry.

How Fitness Technology Can Amp Up Your Workout?

Fitness technology provides instant feedback to members.
Fitness technology allows you to get digital feedback of your heart rate while you’re working out. It is projected to a large screen, so there’s no more guessing game.

Impact of Technology on Fitness Industry | Digital Disruption

Intercontinental Exchange: Transforming Energy Markets and More

In 1997, International Exchange (ICE) founder Jeffrey Sprecher wanted to increase transparency in market pricing among electric companies. So he created a web-based, electronic marketplace where buyers and sellers could trade, invest and manage risk in energy commodities. Intercontinental Exchange now carries an enterprise value of $51 billion dollars. Considering that it started as a technology startup purchased for a dollar, that’s pretty good.

Today, this Atlanta-based global exchange and clearinghouse company is so much more than just a platform for energy commodities. In addition to being the third largest exchange in the world, Intercontinental Exchange has diversified tremendously, transforming energy markets, and changing global trading in the process.

A Customer-Centric Vision of Transparency and Neutrality

ICE was envisioned in 1997, but it did not become a reality until 2000. At the time, many markets had yet to adopt electronic marketplaces. The energy sector was among one of the most challenging, but at the same time, opportunities were abundant. During this time, deregulation and increased competition in the energy sector favored a need for enhanced information. Traders, investors, buyers, and sellers all wanted greater transparency and access to promote greater neutrality. Providing this to consumers in the energy sector was Intercontinental Exchange’s primary mission.

The Intercontinental Exchange (ICE) CEO Jeff Sprecher
Jeffrey Sprecher, ICE Chairman, and CEO Shares His Thoughts about the Company

Acquire, Advance, and Repeat

With its launch in 2000, Sprecher and his team hit the ground running, designing their electronic marketplace around traditional workflows in the energy sector. Customers rapidly adopted its use. The electronic marketplace connected individuals and firms, and the potential for growth remained tremendous. In 2001, Intercontinental Exchange acquired the International Petroleum Exchange of London. By 2005, this exchange was successfully converted to an electronic marketplace as well. Eventually, this would evolve into the ICE Futures Europe.

During this time, Intercontinental Exchange also began participating in the futures and options markets as it related to energy. In 2006, Intercontinental Exchange acquired the New York Board of Trade clearinghouse. Through this small acquisition, ICE was able to expand into other commodities like sugar, cotton, and coffee. But more importantly, the New York Board of Trade also included a small futures clearinghouse. This provided Intercontinental Exchange with an electronic marketplace it could leverage.

Amidst the recession of 2008, Intercontinental Exchange announced it was launching a new London-based clearinghouse. Using the acquired clearinghouse electronic marketplace as a platform, ICE successfully entered the clearinghouse market. The high demand for information access and transparency greatly worked to their advantage in the recession’s aftermath.

Today, the New York Board of Trade is now ICE Clear U.S., and the London-based clearinghouse is ICE Clear Europe.

ICE is Making Something Good Even Better

In 2013, Intercontinental Exchange negotiated the purchase of NYSE Euronext, which was the parent company of the New York Stock Exchange. Intercontinental Exchange appreciated the brand value of the NYSE, but at the same time, saw greater potential. The NYSE is well recognized around the globe for its corporate, ETF and equity listings. However, some aspects of the NYSE had become overly complex and expensive.

In approaching the NYSE, Intercontinental Exchange made some important changes. To address customer needs, order types were simplified and electronic marketplaces streamlined. Likewise, customer-focused teams were created to facilitate services.

As a result, the NYSE is stronger, with enhanced equity liquidity and better capacity in raising capital. These changes under ICE’s leadership account for a big part of its continued success.

The Intercontinental Exchange Revenue Chart
The Intercontinental Exchange Revenue Overlay

Ongoing Impact of the Intercontinental Exchange Today

Intercontinental Exchange has continued to make strides and enhance its offerings for customers. This includes the creation of ICE Data Services in 2016.

An electronic marketplace tool, it provides customers with critical information. Proprietary data, market valuations, and data analytics are among the offerings, which can be readily accessed via a web-based application. Here again, Intercontinental Exchange continues to improve information transparency and neutrality for its customers.

In addition, Intercontinental Exchange finalized its acquisition of the Chicago Stock Exchange in July of this year. While the small exchange operates less than one percent of the markets, it does provide some benefits for ICE. This includes an opportunity for the NYSE to operate in another market region. It also provides Intercontinental Exchange with another exchange license, which enables ICE to have additional voting power over data infrastructures among exchanges and clearinghouses. With the high value of information and data, this has notable importance.

The Intercontinental Exchange (ICE) Market Infrastructure
Guide to ICE and How They are Diversified

Intercontinental Exchange operates 12 regulated exchanges and six clearinghouses. It has also raised more capital than any other exchange during its 18-year existence.

While many specific actions may account for its success, Intercontinental Exchange has mainly thrived due to one simple objective: Create an electronic marketplace that is equitable, transparent and neutral to buyers and sellers alike.

As long as Intercontinental Exchange remains true to its mission, its success will likely continue.