Target to Offer Fitbits to 335,000 Employees

Fitbit

Fitbit

  • Corporate services are one of Fitbit's fastest-growing markets
  • Target employees will compete in teams for charity donation

Retail giant Target Corp. will offer activity trackers from Fitbit Inc. to its 335,000 U.S. employees, becoming the latest firm looking to the inexpensive wearable devices as a way to improve its workers’ fitness and reduce health-care costs.

The deal is one of Fitbit’s largest corporate accounts yet. While corporate services generate less than 10 percent of Fitbit’s revenue, it’s “one of the fastest-growing parts of the business,” Chief Executive Officer James Park said in an interview. Fitbit offers employers a dashboard where they can see an employee’s activity data, such as steps taken in a day. It also helps companies organize competitions and incentives to get workers moving.

Target employees will be able to get Fitbit’s most basic device, a clip-on tracker called a Zip that retails for $59.95, for free. Or they can buy a more expensive wristband with Target subsidizing the cost, Jodee Kozlak, head of human resources at Target, said in an interview.

Fitbit shares rose 5.5 percent to $34.85 at 10:42 a.m. in New York.

Workers who opt in will be organized into teams for a monthlong competition, and the winning team will get to pick a charity to receive a $1 million donation. Fitbit will work with Target to design further programs around the devices, according to Amy McDonough, director of Fitbit Wellness, who oversees the corporate services business.

Fitbit is hoping to grow by tapping into employers’ concerns about rising health-care expenses. One of Fitbit’s customers, Appirio Inc., shaved 6 percent off its health bill after the first year using the device, McDonough said. Other corporate customers include Bank of America Corp., Time Warner Inc. and BP Plc.

“The cost of a Fitbit device and the associated services is very small compared to the savings from a healthier employee population,” said Park.

Healthy Image

For Target, the move is part of the retailer’s effort to improve its image as a wellness company, said Kozlak. Next year, it plans to start promoting more healthy foods and products to its customers from the moment they enter the store to when the leave at the checkout aisle. It will also give employees a discount on healthy foods, with the hope that the effects will trickle down to consumers, Kozlak said. 

Corporate products may also help San Francisco-based Fitbit distinguish itself from an increasingly crowded wearables market, where it’s competing with Jawbone Inc., Samsung Electronics Co. and Apple Inc. The corporate wellness market is projected to be worth $11 billion by 2019, Park said on an August conference call with analysts.

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