Despite what you may have read, mobile apps focused on weight loss aren’t eliminating weight loss companies as we know them. It has been reported that weight loss companies like Weight Watchers and Retrofit are losing business due to a rise in free apps like MyFitnessPal and technology like FitBit. While some individuals trying to lose weight may use those options before paying for a weight loss service, industry analyst John LaRosa believes they have little impact on the overall success of larger weight loss companies.
“I can think of about 10 things that have contributed to the diet companies’ poor showing so far this year,” LaRosa said. “It is not just about free apps like MyFitnessPal. It’s just that this app is now hot and it’s getting lots of attention and recent investor funding.” The activity-monitoring startup FitBit has also received a lot of funding lately and has seen its popularity grow since its debut. Free apps and new devices may not be the sole cause of the diet companies’ downward trend, but something is definitely shifting.
In the last year, Weight Watchers (WTW) revenue is down 3.7 percent and Nutrisystem’s revenue has fallen 20 percent since 2008. Nutrisystem appears to be making an effort to appeal to more customers, extending their line of products that can be purchased in major grocery chains and launching a new ad campaign. We reached out to Weight Watchers for their take on the situation, and they declined comment.
According to LaRosa, diet companies may be struggling due to a variety of factors. He suggests the economy, poor job growth, a bad winter with a lot of snowstorms and the payroll tax increase may be causing people to stay away from more expensive dieting options. Diet fads like HCG drops, acai berry drinks, medical tongue patches and green coffee bean extract also attract dieters looking for a quick way to drop pounds without much commitment. A lack of new programs by major companies combined with a consumer shift away from processed food, which LaRosa said can be found in shelf-stable foods from Nutrisystem, Medifast and Jenny Craig, isn’t helping companies maintain current or gain new members.
Individuals who want to lose weight have a lot of options available to them. Choosing one of the various big-name companies over the others is difficult enough, but with the advent of easy-access free apps, the market has become flooded. Retrofit CEO Jeff Hyman feels that despite competition his company offers clients something others don’t. “The ability to connect with highly-trained experts online is changing the weight loss landscape,” he said. “People are simply too busy to travel to weight loss meetings and retreats. And free calorie-tracking apps fail to make sustained behavior changes for most people.”
LaRosa agrees with the sentiment that free mobile apps can’t compete with the support provided by a more structured system. It isn’t likely that apps will put the larger companies out of business, but rather provide them with a little competition that might help some explore new ways to interact with their clients. For now, it appears the claim that free weight loss apps and other self-monitoring systems will replace diet companies is just that, a claim. As LaRosa said, “there really is no data to support this.”
August 26th, 2013