Image Credit: Rido / Shutterstock.com
It’s a common scenario: imaginative company harnesses new technology to produce a unique product that millions of consumers find irresistible. Consumed with publicly-lauded and sky-rocketing success, the once innovative teams of product developers and marketing gurus stand-by and observe as a competitor passes them by, and steals their lunch, thunder and the lion’s share of the market. Matched or surpassed in product price, value, features and design, the market originator scrambles to survive and regain some level of market relevance.
Surviving failure nearly seven times, Fitbit became the market leader in fitness trackers, owning a whopping 77 percent of the market and securing the leading downloaded app on the Apple App Store in 2014. For a time, Fitbit was the top topic of fitness conversations despite the introduction of the competing Apple Watch. As is so often the case, being on top only makes you a bigger and more desirable target for the competition. By the fourth quarter of last year, Apple Watch was reported to have captured 51 percent of the $18 billion smartwatch global market. With new market entrants Google, Microsoft and AT&T looming on the sidelines ready to enter the field of play, Fitbit’s profits and stock price soon followed their diminishing market share performance. Fitbit, once the largest wearables maker in the world, finished 2018 with just 8% of the market.
The competition is forcing Fitbit to reconsider and reorganize its marketing strategy. Founded around a core competency of fitness wearables, the new strategy is to strengthen its brand reputation and regain some level of market share respectability by establishing itself as an essential portion of the booming healthcare system while venturing into the world of subscription services. With its purchase of Twine Health and a partnership with Google, Fitbit is availing itself of real-time health information in order to attract institutions like hospitals and insurance companies.
Instead of spending marketing dollars on traditional advertising collateral, Fitbit marketers sponsored a competition in support of three national health related charities: The American Diabetes Association, The American Heart Association and National Multiple Sclerosis Society in order to achieve consumer driven impact. Recently, Fitbit formed a partnership with the Blue Cross Blue Shield Association. “This partnership is an example of how Fitbit is expanding access to our devices and software so that we can help more people focus on their health and wellness and achieve better health outcomes,” said Adam Pellegrini, GM of Fitbit Health Solutions. The company’s new unit is expected to improve its revenue position in 2019. James Park, CEO of Fitbit, said “we expect our Fitbit Health Solutions revenue growth to accelerate to approximately $100 million and to grow non-device consumer revenue.”
The fitness-tracking leader is releasing the Versa 2, an updated version of an earlier watch design, and introducing its first monthly subscription service in time for the upcoming holiday shopping season. The revamped product and new service includes a connection with Amazon’s Alexa virtual assistant as well as with musical service provider Spotify. “We want to move away from being looked at as a device company,” says Tim Rosa, chief marketing officer for Fitbit. “We want people to be on Fitbit, as opposed to having a Fitbit.”
The goal is to use Fitbit’s data generated from its 27.6 million active users to create more applications and further embed itself into the healthcare system. Whether the bold move in direction culminates in a change to its position, the once wearables market leader is valiantly attempting to change the market equation.