Welcome!

Eclipse Authors: Elizabeth White, Liz McMillan, XebiaLabs Blog, Ken Fogel, Sematext Blog

Blog Feed Post

The Failure Of J.C. Penney's Ron Johnson - Lessons For The Health Club Industry

This week the former Apple and Target darling, Ronald B. Johnson, was shown the door by J.C. Penney’s board of directors. After 17 months of attempting to remake the Penney’s brand, Johnson failed, at least in the near term, as sales and cash flow plummeted amid his reinvention of the business model.

Johnson’s story and Penney’s plight provide great lessons on the challenges facing businesses and industries in today’s atmosphere of uncertainty. Consumer habits are evolving so much and the buying experience is undergoing a revolution that cuts across retail, health clubs and everything else. Don’t believe me ? Check out accenture’s recent retail research and this Forbes article as evidence . You see the bricks and mortar fitness industry is changing just as dramatically as retail and other industries are and established players are all going to have to wrangle with the issue of how they will remain relevant or die.

Some felt Ron’s arrogance would result in his demise; but what should one expect from a guy who was a Steve Job’s protage and engineer behind Apple’s retail rise with a stellar track record at Target to boot ? In fact that is why he was chosen. An article by Stephanie Clifford, Chief’s Silicon Valley Stardom Quickly Clashed at J.C. Penney, depicts Johnson’s attempt to transform the retailer. However, Clifford’s story fails to put some important parts in context.  J.C. Penney, though profitable, was seen as a poor performer that was losing ground to competitors like Macy’s on the high end and Kohl’s on the value end. (Yes Chuck Runyon its the bifurcation dynamic again :)). Its a similar situation several major health club chains face, as they are being picked apart by low price competitors and high end Equinox along with other niche micro gyms and studio concepts. Its easy for anyone to play Monday morning quarterback with Johnson’s strategies; but he was hand selected by the board exactly for being a change agent and innovator because the board saw an emerging problem. Did Penney's bold efforts fail more because of the way they were executed or how they were timed? I'm not sure, but consider that the tablet revolution started with the failed Newton, 10 years ahead of the iPad.

All retail competitors are facing the same challenges as Penney’s and while Ron failed, it sure is interesting how many people were curious about his strategies. An excerpt from Clifford’s article shares this: “Ken Murphy, senior vice president at Standard Life Investments, said that “many retailers, while openly cautious and dismissive of the JCP experiment, were actually nervously watching JCP’s plans unfold with some concern that if their strategy worked, the industry would be required to adapt faster than expected to a new trend in retailing.” You see because Macy’s, Kohl’s and others may be winning a battle with Penney’s, they might still lose the war to digital competition and a chameleon consumer whom they are desperately trying to figure out. This is the tight rope that the revolutionary Johnson walked and its the same one faced by many leaders in the health club industry today.

The same pressures that face Penney’s business model are impacting a number of significant health club brands today. Fitness First, formerly the world's largest club chain, failed last year. 24 Hour Fitness saw the majority of its senior leadership let go recently. These events and many others only evidence the high stakes game that is being played out across the health club industry, as it is with most consumer industries. Leaders know things have got to change but its hard to know just how. Sometimes they succeed and often they fail.

I’d theorize that leadership changes won’t be exclusive to 24 Hour or Fitness First . In the coming months more changes, consolidations and new entrants will emerge because in this day and age no industry or leader is immune from digital darwinism. Just ask Ron Johnson and J.C. Penney’s shareholders.

So what do you think ? How do you see the health club industry going through change like retail and other industries? Do you see changes in leadership in some health club brands ? Please let me know. I want to hear from you !! Thanks for reading.

About the author:

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He works for Fitmarc, which delivers Les Mills programs to over 700 facilities in the US. He advises successful global brands, serves as a member of the GGFA Think Tank and serves as CEO of the Fitness Industry Technology Council. To learn more contact Bryan here today .

Read the original blog entry...

More Stories By Bryan O'Rourke

Bryan O’Rourke is a health club industry expert, technologist, financier, shareholder and executive in several fitness companies. He consults with global brands, serves as a member of the GGFA Think Tank, is President of the Fitness Industry Technology Council and a partner in FitmarcIntegerusFitsomo and the Flywheel Group. To learn more contact Bryan here today .

@ThingsExpo Stories
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
The essence of data analysis involves setting up data pipelines that consist of several operations that are chained together – starting from data collection, data quality checks, data integration, data analysis and data visualization (including the setting up of interaction paths in that visualization). In our opinion, the challenges stem from the technology diversity at each stage of the data pipeline as well as the lack of process around the analysis.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
SYS-CON Events announced today that 24Notion has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. 24Notion is full-service global creative digital marketing, technology and lifestyle agency that combines strategic ideas with customized tactical execution. With a broad understand of the art of traditional marketing, new media, communications and social influence, 24Notion uniquely understands how to con...
The demand for organizations to expand their infrastructure to multiple IT environments like the cloud, on-premise, mobile, bring your own device (BYOD) and the Internet of Things (IoT) continues to grow. As this hybrid infrastructure increases, the challenge to monitor the security of these systems increases in volume and complexity. In his session at 18th Cloud Expo, Stephen Coty, Chief Security Evangelist at Alert Logic, will show how properly configured and managed security architecture can...
In his session at 18th Cloud Expo, Bruce Swann, Senior Product Marketing Manager at Adobe, will discuss how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects). Bruce Swann has more than 15 years of experience working with digital marketing disciplines like web analytics, social med...
When it comes to IoT in the enterprise, namely the commercial building and hospitality markets, a benefit not getting the attention it deserves is energy efficiency, and IoT's direct impact on a cleaner, greener environment when installed in smart buildings. Until now clean technology was offered piecemeal and led with point solutions that require significant systems integration to orchestrate and deploy. There didn't exist a 'top down' approach that can manage and monitor the way a Smart Buildi...
SYS-CON Events announced today BZ Media LLC has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and Commercial Drone markets.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit y...
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo New York Call for Papers is now open.
There are several IoTs: the Industrial Internet, Consumer Wearables, Wearables and Healthcare, Supply Chains, and the movement toward Smart Grids, Cities, Regions, and Nations. There are competing communications standards every step of the way, a bewildering array of sensors and devices, and an entire world of competing data analytics platforms. To some this appears to be chaos. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will discuss the vast to...
SYS-CON Events announced today that Enzu, a leading provider of cloud hosting solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to foc...
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
IoT generates lots of temporal data. But how do you unlock its value? How do you coordinate the diverse moving parts that must come together when developing your IoT product? What are the key challenges addressed by Data as a Service? How does cloud computing underlie and connect the notions of Digital and DevOps What is the impact of the API economy? What is the business imperative for Cognitive Computing? Get all these questions and hundreds more like them answered at the 18th Cloud Expo...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, wh...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...