NutriSystem CEO: "You can't eat an app for lunch."

By Jonah Comstock
08:37 am
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NuMiWeight loss company NutriSystem stressed that its weight loss app was a key part of its strategy moving forward, according to the company's Q4 earnings call. The company's core offering is an end-to-end weight loss system: The company sends users ingredients and food preparation instructions via snail mail.

But the NuMi app, soft launched in March 2014 and officially launched in December, can either serve as a complement to that system or as a free nutrition tracking app in its own right. As CEO Dawn Zier shared on the call, the app recently added integrations with Fitbit, Jawbone, and Apple HealthKit.

"We revamped our diabetic offerings with the focus on ongoing weight management to address an underserved market need for Type 2 diabetes," she said. "We launched NuMi, a state-of-the-art digital weight loss app, becoming the first in our space to integrate with a wide array of wearable fitness devices including FitBit, Jawbone and Apple Motion, and we also recently completed the integration with Apple HealthKit. Additionally, NuMi offers users over 200 activity suggestions based on time availability and lifestyle preferences and also has meal recommendations for eating in or eating out. The NuMi app is an enabler for combining flexibility around structure with technology and fitness to attract potential new customer segments."

NutriSystem is a Weight Watchers competitor, so the rise of free apps for addressing weight loss has the potential to threaten its business, just as it has reportedly threatened Weight Watchers' business since 2013. But Nutrisystem, which does extensive customer research, chose to respond by creating its own impressively featured app.

"We conducted a lot of research on existing customers and new customer segments to understand evolving consumer preferences and needs," Zier said. "We also pulse-tested products across all phases of the weight loss spectrum, NuMi and Simply Fresh being the most notable examples, to assess demand and price sensitivities among different customer segments. These initiatives and insights inform our strategic direction and decision making around new product offerings that will become available or expanded upon in 2015 and beyond."

Zier said the app does bring in some new customers, but the main focus for now is to treat it as a complementary product to NutriSystem's core offering. In the Q&A, she emphasized the differences between NutriSystem and Weight Watchers and addressed concerns about free apps eating away at the company's market share.

"We always believe that there's a shifting of share and we believe that we are capturing some of that, but the reality is we have a product that’s very different than Weight Watchers," she said. "We view free apps, which I think is an issue still being struggled with, as complementary to our products rather than as cannibalistic. The price point for our product is close to $300, and that’s a big difference. People signing up for our products know that they are committing to a $300-a-month product and are willing to do that. And as we like to say, 'You can't eat an app for lunch'."

NutriSystem's digital plays have been few so far, but the company did work with Jawbone last year to offer recipe recommendations with the UP app. Before that, NutriSystem was floated as a potential buyer for BodyMedia prior to its acquisition by Jawbone.

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