Weight Watchers CEO: How Oprah and the ‘Quarantine 15’ boosted subscriptions – Fox Business

Sierra Fitness owner Sandy Duvall details how her gym is adjusting to the coronavirus outbreak, from moving equipment outside to closing for multiple hours each day for deep cleaning.

With gyms still closed in many parts of the country, WW is putting more weight behind digital streaming.

The company, formerly known as Weight Watchers, reported lower-than-expected second-quarterprofit and revenue because the coronavirus pandemic shut down its brick-and-mortar locations for in-person meetings. But the weight-loss and fitness brand has bulked up on digital subscribers, perhaps because work-from-home mandates and gym shutdowns have resulted in theunwanted "Quarantine 15" for many, a reference to the amount of weight gained during lockdown.

When COVID really escalated, in six days we moved all of our workshops virtually, WW CEO Mindy Grossman told FOX Business. Theres no doubt our digital transformation has accelerated. We see the future of the business certainly, we will still have studios but its really going to be driven by digital member growth.

The New York-based company reported a net income of $14 million in itssecond-quarter earnings reporton Tuesday,compared with $54 million in the same period ayear ago. Sales also dropped to $334 million from $369 million one year ago. However, WWclosed out the quarter with its highest-ever subscriber rate of 5 million people, up9% year-over-year.

Much of the growth has been driven by digital assets outside of just food and exercise, with newly implemented features such as a water tracker to monitor hydration levels and a sleep tracker to sync with smartphones.

OPRAH TOUR DRIVING WEIGHT WATCHERS MEMBERSHIPS

The brandstarted pivoting to more of a wellness company before the pandemic hit. Earlier in the year, WW presented Oprah's 2020 Vision Tour, during whichOprah Winfreyinterviewedthe likes of Michelle Obama and Jennifer Lopez about topics ranging from food, exercise, anddiet, but alsomental andphysical health. The company grew its subscriber total by 8 percent, closing out the 2019 fiscal year with4.2 million subscribers an all-time, year-end high for the brand.

The live tour also boosted the brand's bottom line with direct tour revenue estimated at close to $15 million,MarketWatchreported.

IS IT SAFE TO GO TO THE GYM DURING THE CORONAVIRUS PANDEMIC?

Having the star power of Winfrey whoowns 8%of thecompanys shares, according to FactSet has also helped it attract a younger demographic, Grossman says, adding that more than half of members (51%) who joined WW in the second quarter were under 45.

Were definitely seeing a new cohort coming in. There is a real shift in consumer behavior of I really need to take care of myself. COVID has really had an impact. People want a trusted brand," Grossman said.

Incorporating experiential lifestyle content into weight loss and healthy living programs is a way for WW to continue to infiltratethe wellness market. Indeed, the global wellness industry grew 12.8 percent duringthe last two years, from a$3.7 trillion marketin 2015to $4.2 trillion in 2017, according to the 2018 Global Wellness Economy Monitor.And with fitness companies like Peloton competing in the streaming wars, Grossman says WW will continue to carve out more content in the fitness space.

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One of the things youre going to see launching at the end of the year is a new membership vertical around coach-led communities built on content produced by the [team behind] thephysical tour and the virtual tour with Oprah. Youre going to be seeing a lot more of that.

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Weight Watchers CEO: How Oprah and the 'Quarantine 15' boosted subscriptions - Fox Business

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