MARKET ANALYSIS
A NEW WAY OF
BUYING
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In the first of a two-part series, Stephen Tharrett and Mark Williamson of ClubIntel investigate the influence of internet middlemen in the fitness industry
ack in the mid-1940s, renowned economist and author Joseph Schumpeter said: “Situations emerge in the process of creative destruction in which many firms have to perish that nevertheless would be able to live on vigorously and usefully if they could weather a particular storm.” Fast forward 70 years and his words could not ring truer. Today’s business world has been turned on its head by the newest capitalistic storm: internet middlemen. From food delivery (think GrubHub in the US and Just Eat in the UK) to dining (Open Table), lodging (Airbnb) to massage (Soothe, Zeel), ride sharing (Uber, Lyft) to fast cash
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delivery (Nimbl) and fi tness facility access (ClassPass and Wildfire, to name just two), internet middlemen have changed the way consumers shop and buyers sell. It’s a storm that’s driving many traditional businesses to the brink of extinction while making millionaires of the middlemen innovators. So how do these middlemen operate, and how should the fi tness sector respond? WHAT SORT OF RELATIONSHIP? An internet middleman is a business that leverages the internet and worldwide web to offer consumers attractive alternatives to traditional shopping experiences. A good internet middleman provides
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added value the traditional producer can’t provide and offers a service the consumer desires. For example, Airbnb offers homeowners a virtual platform to market and rent their properties, while also offering the sort of convenient and cost-effective means of reserving lodging that today’s consumers are craving. But with the emergence and evolution of internet middlemen comes the billiondollar question: When is the business relationship between seller, middleman and buyer a symbiotic one that lifts all parties, and when does that relationship become parasitic or even cannibalistic, potentially wiping out a business or even an entire industry?