COVID-19 puts weight behind WW's digital transformation ambitions

Profile picture for user slauchlan By Stuart Lauchlan August 6, 2020
Summary:
WW, formerly WeightWatchers, has had an unexpected boost to its digital transformation ambitions since COVID-19 led to lockdowns around the globe. Can this be sustained?

weightwatchers
(WW)

There’s a perhaps justifiable hint of vindication in remarks from Mindy Grossman, CEO of WW, the health and wellness giant formerly known as WeightWatchers, when she says:

We began our strategic shift to a purpose-driven and deeply impactful technology experience company long before March of 2020. However, there is no doubt that our digital transformation has accelerated with the onset of COVID-19.

At diginomica, we’ve been following the long transformation of WW from a firm dependent on a physical meeting business model to one that aspired to be digital-first for over 5 years now. It’s a journey that’s had its ups and downs, not least the still seemingly pointless abandoning of a globally recognised brand name for something that sounds more...like an app

But lockdown and the closure of gyms and similar facilities has provided the firm with an unexpected enabler for change. With anecdotal evidence coming from all sides of how people have piled on weight when trapped indoors most of the day, WW’s digital reach has provided a seeming lifeline to many. 

The firm currently has around 5 million subscribers, 80% of whom are digital-only members. That’s a 23% year-on-year digital growth rate. The remaining 20% are combined studio+digital subscribers, but the direction of travel is clear. Over the lockdown period since April, 90% of new members chose the digital-only option, accompanied by a demographic shift noted as well with over half of those newcomers being under the age of 45.

In short, it may have taken the horror of a global pandemic to do it, but WW’s digital aspirations have had a rocket-boost that the firm wasn’t expecting. Hence Grossman now states: 

Although 2020 has certainly been a year of unique and unprecedented challenges for us all, it has also served to reinforce our belief in our strategy, the resilience of our business model, and the relevance of our global brand as well as the significant opportunity we have for WW to positively impact people's lives…Consumers are looking for a science-based, affordable and proven wellness and weight loss program that is both digitally-enabled and provides a real human connection. 

Developments

Overall app engagement trends are also on the rise, she says: 

For example, new features, such as our water tracker have been enthusiastically received with over 2 million WW members tracking hydration, and we recently enhanced our sleep tracker to sync with connected devices making it easier for members to monitor their progress and improve their sleep habits. In addition, the integration of FitOn, a video fitness platform, not only bolsters our portfolio fitness content, but provides members with workouts they could do at home, all while seamlessly syncing home, all while seamlessly syncing to FitPoints.

Since its recent launch, our members completed over 0.5 million FitOn workouts and spent over 7.5 million minutes working out. For added gamification, we recently launched a FitOn fans connect challenge, a 3-week partnership with FitOn trainers that encourage members to try different type of FitOn workouts. This grew the FitOn fans group engagement exponentially. We will continue rolling FitOn out globally over the balance of the year.

There have also been experiments with virtual experience offerings, most notably a four week long event fronted by Oprah Winfrey called Your Life in Focus: A Vision Forward. This has had 3.5 million views to date and has generated 30 billion media impressions. The success of this will shape future digital investment, says Grossman: 

We have refined our plans for an entirely new digitally-enabled, community-focused and coach-led premium experience, specifically designed for a Millennial audience. We are on track to launch this new enhanced offering in December. A new group of coaches will deliver motivation, accountability and deep insights entirely virtual to help members along their journeys. They will engage in live and on-demand experiences and share unique content to a scalable modern digital platform. Backed by science and human behavior psychology, this new virtual coach-centric experience will offer the tools and communities sought by millennials looking for weight loss and total body wellness.

But if the future’s digital, what happens to all the real estate that WW has around the world, such the 800 WW-branded fitness studios in the US alone?  According to Chief Operating Officer Nick Hotchkin, the priority now is to get out of as much of this as possible and to reduce the real estate footprint in the process: 

Virtual workshops continue to be extremely well received by members with many expressing a strong desire for them to continue post-COVID as members enjoy the convenience. These virtual workshops also provide greater access to our coaches, particularly in areas where we don’t have a studio location. Therefore, we plan to continue offering workshops virtually in addition to exploring strategic partner locations to serve an even broader member base.

And with a more digital demographic growing, WW’s venture into e-commerce is also accelerating, says Grossman: 

We envision WW as the go-to for all things weight loss and wellness across healthy eating, healthy kitchen and healthy lifestyle. We will achieve this vision by driving brand perception and positive associations within the minds of consumers and by creating favorable interactions and memorable experiences. The advancements our team has made to enhance our e-commerce experience has been exceptional.

The WW Shop was integrated into the app in March and is the firm’s main channel for purchases, in addition to in-studio purchasing, with e-commerce sales up 300% year-over-year. But that’s from a relatively small base, she concedes:

We are focused on increasing the percentage of members, particularly digital members, who buy WW products and are testing a number of initiatives to increase awareness and incentivize first time and repeat purchases. In Q2, only a small percentage of our digital members purchased products on the recently launched in-app WW Shop, demonstrating the significant opportunity found in just a modest increase to this penetration rate. In addition, we see opportunities through increasing frequency purchase and are exploring new ways to incentivize and reward repeat purchases. 

Life after COVID

With attention shifting towards a post-pandemic world, there are also new opportunities for the firm’s Health Solutions digital health arm as business and governments alike focus on a future that will, by necessity, be far more health-conscious. 

In the UK, WW was named last month as a partner with Public Health England in its campaign, led by the nation’s obese Prime Minister, to encourage citizens to lose weight, the theory being that extra pounds brings extra vulnerability to COVID sufferers. Meanwhile in the US, WW Health Solutions has been added as a new wellness and weight management solution to CVS Health's Point Solutions Management offering.

There will be other commercial opportunities to come as businesses look to bring their staff back into the formal workplace, predicts Grossman: 

Employers will need to take on a greater role in advancing employee health and wellness. In addition, people are seeking out more virtual options. I've personally spoken with many healthcare providers recently, and they've said patients often now prefer for consultations to be done virtually. We are truly seeing a dramatic shift in consumer preferences and one that I believe is here to stay.

She adds: 

We believe healthy living is a human right, and we aspire to make wellness accessible to all, not just a few. We're actively evolving this business from being viewed as a wellness perk to being a powerful partner in health by working with organizations to help their populations lose weight, stay healthy and prevent chronic conditions. We see a significantly larger opportunity in the years to come to greatly accelerate growth and reach a significantly larger universe of consumers.

Overall, COVID has been good for WW’s transformational program; the challenge now is to build on that. Grossman concludes :

Our goal is not to maintain, but to advance WW's position as the trusted leader in weight loss and wellness delivering a connected digital and deeply human experience for sustainable behavior change, to be the brand that truly democratizes wellness for all. So it is up to all of us as individuals, as an organization and as fellow humans to advocate for our employees, our members and our communities. And this is not an isolated objective, but one that will be ingrained across every priority and initiative at WW.

My take

How the COVID-19 crisis ends up impacting on long term health and wellness attitudes and behaviors across society remains to be seen. But there are some clear indicators of changes that may well end up as permanent shifts, such as adoption of telemedicine or the rise of in-home physical fitness regimes rather than paying out a small fortune to go to a communal gym with all its social distancing requirements and potential infection risks. (Watch out for a two part look at healthcare transformation post-COVID next week.) For WW, there is clearly opportunity here and its decision to drill down on digital a few years ago has proven to be prescient. If a second wave of the virus does indeed grow more widespread in the second half of the year, there’s no reason to believe that the firm can’t continue to speed up its transformation.