In recent years, WW – the organization formerly known as WeightWatchers – has doubled down on digital. It’s been all about the app and online community, a major evolution from its traditional model of meetings in physical rooms. That’s something that may have played well during the COVID crisis when social mixing was banned for long periods of time, but now the Vaccine Economy is taking shape and people’s pent-up need for social connection with other human beings has been released.
That’s got implications for WW as much as it has for the likes of Peloton. WW’s new CEO Sima Sistani knows a lot about connections. She co-founded Houseparty in 2016 as “a face-to-face synchronous social network with the intention of bringing empathy to online communication”.
Now seven weeks into her new role, Sistani declares that at WW, “Connection is everything”. But COVID has changed a lot of thinking it seems as she states:
Twenty years in digital community building have taught me that nothing compares to IRL in real life.
She expands on her thinking:
After years of social distancing and polarization, people are suffering more than ever from a lack of connection….A group of people walk into a space because of a shared interest in weight loss. They share their vulnerabilities. Then they walk out connected, lifted with a sense of belonging. Not only will we translate that experience to the digital landscape, we will also focus on attracting members back to our in person experience. When we achieve that, we will create a network effect that delivers efficient acquisition, improved engagement and longer retention.
Dubbing WeightWatchers – and it’s interesting that this nomenclature is being used given all the fuss about the rebrand a few years back – “the original social network”, she adds:
For almost 60 years, we have met the needs of members looking for a sustainable way to meet their weight loss goals. It’s clear that in the last few years, there has been a shift in consumer sentiment with many differing action on these goals. But we believe we can deliver a product that gives them a renewed desire to address it. WeightWatchers, through its experience at the intersection of science and community, has been the gold standard in effectiveness. And frankly, still is.
But there’s clearly going to be more ‘omni-channel’ thinking in the months and years ahead as she adds:
The digital product has come a long way. But beyond the inspiring member community find and connect, it has remained largely content and tracking tools, both of which are a commodity on a weight loss journey. 24/7 messaging chat with a coach was a good first step. But the level of coaching found in our workshops, where each week you meet with your coach and a group of like-minded members remains lacking in the digital online experience.
What differentiates us is a human connection. Digital tools and features are table stakes, real personal connection. That’s the magic. The shift to digital was accelerated by the pandemic bringing us to today, where workshop subscribers have come to represent only 16% of the total, meaning nearly 85% of our members are not experiencing our gold standard. I am committed to changing that.
What’s the plan?
So how is she going to achieve this? Well, first off, it seems that less is more. Sistani argues:
We have the foundation to deliver results for consumers. But we’re trying to do too much and [have] complicated our marketing and the product in the process. We know how to help people lose weight and get well because we’ve done it for almost 60 years [through] coaching, accountability and community. We will continue to deliver that with warmth and humanity, utilizing the latest technology. People are begging for simplicity and efficacy in the space and we can and must deliver that.
And WW itself needs to shed some weight, she adds:
The company has scaled up investments in the business over the last years, but not all of those investments have delivered impact. There are many paths to growth. However, the organization has been pursuing too many at once, creating complexity and overextending critical products and tech resources. With continuing pressure on our revenue, we will take action to stabilize subscriber trends of our existing offerings while building a platform that will be the foundation for a path to profitable growth…We’re pulling back on certain initiatives. While many of these were strategically compelling, the investment and resources required were a distraction, and didn’t deliver the necessary return.
The first casualty is Digital 360, the app-based membership plan that was launched with great fanfare in January last year. Coming up for 18 months later and it’s terminating. Sistani explains the rationale:
D 360 was the company’s first attempt to bring coaching to digital subscribers and attract a younger demographic, which makes strategic sense. However, as it was designed, D 360 did not accomplish these objectives. Engagement in the product was low. Therefore, we will be sunsetting the D 360 products, starting in the US and Canada.
There are about 200,000 D 360 users who will now be offered alternative plans. It’s a key step forward, she insists:
The decision to sunset serves as an important cultural shift to embracing data-informed product development and calibrating quickly off those learnings. We will take the learnings from D 360 and develop a roadmap to bring coaching and community to our digital product in a compelling, holistic way for all members.
We are integrating coaching into our digital product. That was the right strategic decision, it just didn’t deliver on the KPIs. Our members, they want to feel a sense of belonging and a connection to the coach. We keep hearing, ‘Show me that you know me’, and D 360, unfortunately, didn’t deliver that….I think the bar is too high for one too many digital content business.
So it’s back to basics, it seems:
We’re going to come back to what we know. We’ve been doing coaching for almost 60 years and our product needs to do the talking not videos…85% of our subscribers, they didn’t have access to coaching as a result of workshop closures. And so we’re now focused on bringing that to the core product in a compelling way.
That’s not to say that apps are out. Sistani says the focus now is on creating a new app experience that is streamlined around three pillars – coaching, accountability, and community. This is a process that’s going to take time to deliver – up to 18 months is the current estimate – although she argues that:
There will be quick wins along the way as we improve the core experience through a data -informed feature pipeline, with a goal to stabilize the business trends in 2022 and to return to member sign-up growth in 2023.
In-person workshops will become a priority, but with a digital spin:
We are going to tech-enable our workshop experience to help coaches better serve our members. The studio is a critical differentiator, though the digital experience is part of your every day. It’s convenient after all.
With workshop subscribers down by nearly 700,000 since the pandemic, we have a near term opportunity to build back this business. While we work on our improved digital-only experience, which notably has remained higher than pre-pandemic levels, we will continue to optimize our studio footprint, particularly the fixed location.
Other parts of the business will be further rationalized, says Sistani:
First, the enablement of our e-commerce platform has been essential to our consumer products business, particularly given the changes and limited accessibility to our studio footprint during the pandemic, which previously had been our primary channel for product sales. But over the last few years, we have also significantly expanded our SKU counts to include products across a variety of wellness categories. However, the 80:20 rule applies here, we see that 80% of our product sales are concentrated on approximately 20% of our SKUs, namely our points friendly snack foods, kitchen tools and scales.
What this means is that there’s a decision taken to scale back the consumer product SKU count, and instead focus on high return, high profit items.
My take
Hearing the new CEO call the firm WeightWatchers was interesting. The shift to WW in pursuit of digital modernity was always a dubious move. As we noted at the time:
Last November, the company formerly known as WeightWatchers decided that despite having one of the most recognizable brands in the world – and one that ‘does what it says on the tin’ – it was time to make a radical change. Basically the feeling seemed to be that the company had the wrong ‘tin’ for the current age .
Three years and one globe pandemic later and it’s time for a welcome re-think with Sistani being relaxed about the branding:
WeightWatchers is an iconic brand, and it’s a legacy and a heritage that we are incredibly proud of. So you will see us use both names interchangeably. Call us by our nickname, WW, or call us WeightWatchers where we’re both.
Actually WW wasn’t a nickname, was it? It was a very costly brand repositioning that never caught on, but let’s leave that to one side for now.
What’s critical here is the recognition – as in the retail sector – that strength comes from omni-channel thinking and delivery. Digital plays its part, as does physical – but if anyone starts talking about ‘phygital’ there will be merry hell to pay.
That said, Sistani has a big job on her hands to get WeightWatchers back to fighting fitness. One to keep an eye on, I think.
