TRENDS TO WATCH FITNESS INDUSTRY - FEBRUARY 2021 - Questex
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TABLE OF CONTENTS 3 2021: A WHOLE NEW BALLGAME FOR THE FITNESS INDUSTRY By Pamela Kufahl, director of content, Club Industry 4 A YEAR IN FLUX: 2021 POSES CHALLENGES FOR THE HEALTH CLUB INDUSTRY By Rick Caro, president, Management Vision 6 SURVIVAL IN 2021 REQUIRES GETTING DONE THE JOB OF MEETING CONSUMERS’ NEW DEMANDS By Emmett Williams, CEO Asia Pacific, Myzone 8 BOOST MEMBER ENGAGEMENT WITH THE NETFLIX EFFECT IN 2021 By Jeff Esswein, vice-president of strategic accounts and digital content, Freemotion Fitness 10 FOUR TRENDS THAT WILL AFFECT THE FUTURE OF THE HVLP MARKET IN 2021 By Art Curtis, president, Curtis Club Advisors LLC 12 DIGITAL FITNESS TRENDS FOR THE NEXT DECADE By Hannah Campbell, content producer, Les Mills 14 THE TRENDS IN PRICING DIGITAL FITNESS IN 2021 By Ashley Podoll, CMO, Intelivideo 16 A EUROPEAN PERSPECTIVE ON WHAT’S COMING IN 2021 AND WHERE TO FOCUS YOUR EFFORTS By Jennifer Halsall-de Wit, board member, Europe Active, and COO, Women in Fitness Association 18 DIGITAL FITNESS ACCELERATED IN 2020 – NOW WHAT? By Sharad Mohan, co-founder and managing director, Trainerize powered by ABC 20 THE FUTURE IS HYBRID: HOW TO LEVEL UP YOUR VIRTUAL OFFERING By Clint Gehde, co-founder and head coach, Exer 22 SALES AND MARKETING TRENDS IN A NEW ERA OF THE FITNESS INDUSTRY By Bill McBride, CEO, Active Wellness, and CEO, BMC3 Consulting 24 RESHAPING AND SUPERCHARGING THE MEMBER EXPERIENCE IN 2021 By Andrew Evenson, senior director operations and brand strategy, Fitness OnDemand 26 FORECASTING STRONG MARKET GROWTH IN 2021 FOR THE RIGHT FITNESS CONCEPTS By Rick Mayo, founder and CEO, Alloy Personal Training 28 IN 2021 GYMS MUST CAPTURE MEMBERS WHO LOVE TO ‘PLAY OUTSIDE’ By Chris Frankel, head of performance, BeaverFit USA 30 FOUR SOFTWARE AND BILLING TIPS TO HELP YOU THROUGH 2021 By Carole Oat, national sales manager, Twin Oaks Software 32 30 VIEWS ON HEALTH AND WELLNESS INDUSTRY TRENDS TO WATCH IN 2021 FEBRUARY 2021
EDITOR’S LETTER 2021: A WHOLE NEW 685 Third Ave., 21st Floor New York, NY 10017 BALLGAME FOR THE DIRECTOR OF CONTENT FITNESS INDUSTRY Pamela Kufahl MANAGING DIRECTOR E ach year’s trends are always impacted by what happened the Marty McCallen year prior, but 2021’s trajectory has been defined by the un- INTEGRATED MEDIA usual and challenging circumstances of 2020, which makes 2021 ACCOUNT REP a different ballgame. Many of the trends we are experiencing Crystal Wheeler were already percolating prior to 2020, but the challenges of the year pushed many of them further and faster than they might MARKETING MANAGER have gone in any “normal” year. So during the first quarter of Tina Beebe the new year, Club Industry has asked a variety of people in the ART DIRECTOR fitness industry to share their thoughts on trends to watch in Jordino De Los Santos 2021. Club Industry gathered insights from industry consultants Rick SENIOR DIGITAL Caro of Management Vision, Art Curtis of Curtis Club Advisors ADVERTISING SPECIALIST Taylor Gleason and Bill McBride of BMC3 Consulting (and CEO of Active Man- agement) as well as Jennifer Halsall-de Wit, board member of www.clubindustry.com Europe Active and COO of Women in Fitness Association, and Rick Mayo, founder of Alloy Personal Training. Each of these individuals share their thoughts in the first stories of the report, interspersed with insights from the report sponsors. PHOTOGRAPHY: GETTY IMAGES The last story offers insights from 30 individuals representing commercial clubs, studios, YMCAs, parks and rec facilities and This report is sponsored by: other segments of the industry. Those individuals include Mel Kleist, executive director of East Bank Club; Raj Kumar, execu- tive vice president, international of Self Esteem Brands; Rebecca Lee, vice president of membership & wellness at YMCA of Metro Dallas; Sarah Luna, president of Xponential Fitness; Todd Maga- zine, CEO of Blink Fitness; JoAnna Masloski, COO of Wellbridge; David Rachal III, founder and CEO of Healthefit: Greta Wagner, executive director/executive vice president of Chelsea Piers; and Omar Yunes, CEO of 54D. So sit back, relax and check out these insights to see if they match up with your thoughts on where the fitness industry is headed in 2021. Sincerely, Pamela Kufahl Director of Content Club Industry www.clubindustry.com 3 FEBRUARY 2021
A YEAR IN FLUX: 2021 POSES CHALLENGES FOR THE HEALTH CLUB INDUSTRY Coming off its most devastating year ever, the health club industry is facing challenges in 2021 that will require a marathon effort and forward thinking to overcome. BY RICK CARO, PRESIDENT, MANAGEMENT VISION I n 2020, the fitness industry had the most devastating year in its history. Clubs were shuttered, sometimes more than once with no freeze. Many indicated they will return after they receive both doses of the two-dose vaccine. Many adults were told to work from home, and children clear guidance on timing. When allowed to operate, attended school virtually at home. Many people some state and local restrictions were devastating struggled financially. While at home, many people and even prevented clubs from actually invested in home reopening properly. The image of the health club fitness equipment industry was challenged as clubs were labeled “And the positioning of the and sought digital as “super spreaders of COVID-19” and included fitness solutions. as part of the overall indoor spaces (including club as a necessary part No one is bars and restaurants, casinos and indoor sports of one’s lifestyle will take expecting the arenas) rather than being universally viewed as workforce to part of the healthcare continuum. Club owners time to win the day.” resume full-time came together, including with fellow local office use for most competitors, to create state alliances and join in of 2021. Until next the messaging, research, lobbying and funding to fall, youths are still mostly or entirely at home. tell the full industry story. Governments are likely to maintain the same level of restrictions even while more people gain access Club Challenges to the vaccine. And the positioning of the club as Suddenly, the pandemic affected the viability of a necessary part of one’s lifestyle will take time to clubs globally. Governments closed clubs. When win the day. allowed to reopen, they did so with restrictions on capacity permitted, distancing measures in place Business Challenges and required use of masks, often causing many Clubs are facing liquidity challenges. Membership existing members to cancel or go on “freeze.” levels, depending on the segment, are often at 50 Clubs today still have large percentages of percent to 60 percent of last March’s totals. A huge members from the closures of last March still on percentage of members remain on freeze with no 4 FEBRUARY 2021
committed return date. Nondues revenue The question is what that direction looks like categories are often at 25 percent to 30 percent of post-pandemic. Many assume that clubs will need a year ago. Even with severe cost-cutting measures, an omnichannel approach to offer a pure brick- clubs are struggling to break even. So, liquidity and-mortar offer, a digital-only membership and is a major force affecting all clubs. Negotiations a combined one. This could lead to increasing the with landlords have often yielded overall industry membership as a revised rental arrangements, whole. pushing out the missed payments to formulas for future years. Few “The club industry is The club industry is not likely to return to previous levels until the landlords have forgiven missed not likely to return to fourth quarter 2021. And it still may payments. Banks have also been willing to re-do amortization previous levels until the be less than 100 percent at that juncture. It will need to get more schedules. Government assistance fourth quarter 2021. And it medical advisors to give credence in the form of PPP loans on Main Street bank loans has helped, but still may be less than 100 to the club experience, do more research to prove clubs are safe, do it is a temporary fix. percent at that juncture. ” better public relations and overall About 17 percent of all U.S. messaging, ensure compliance clubs have closed permanently. with all regulations, create regular state alliances, Those with access to capital may be able to obtain support IHRSA’s new lobbying efforts for the attractive deals to acquire some of these. The industry and connect to its local communities studio component is struggling with the local in deeper ways. It will be a proverbial marathon distancing requirements for member usage. effort to come back in the near future. Until those are eased—or even eliminated—these businesses cannot operate even at break-even in terms of basic operating costs. The larger clubs, BIO Rick Caro is president of especially those with outdoor components, have cleverly developed regular outdoor usage under consulting firm Management tents and temporary pavilions. The HVLP (high- Vision Inc., which provides volume, low-price) segment is recovering faster management expertise to than most but is heavily weighted to returning 20- clubs, real estate developers, to 40-year-old members. Development of new clubs hospitals, hotels, resorts and has slowed and is tied to available capital levels. appraisers. He also serves Franchises are getting solid support from as an expert witness. He does feasibility studies, franchisors and are likely to survive overall. business plans, loan proposals, valuation of the The mid-tier clubs are sensitive to their worth of clubs, assistance in the buying and selling previous challenge of positioning and need for of clubs, operational analyses of existing clubs and differentiation. Even the largest companies in this financial acumen. Caro has more than 40 years space are reviewing their future options. of experience in the fitness industry, previously running his own health clubs. He is one of the New Influences founders of IHRSA and served as president and New challenges have arisen from digital content director of the trade association for commercial and at-home fitness—both growing meteorically. club operators. 5 FEBRUARY 2021
SPONSOR: MYZONE SURVIVAL IN 2021 REQUIRES GETTING DONE THE JOB OF MEETING CONSUMERS’ NEW DEMAND Whether you are supporting your members in achieving their goals in-person or virtually, your health club must stick to the core job to be done. BY EMMETT WILLIAMS, CEO ASIA PACIFIC, MYZONE A s we settle into 2021, some things are clear: 17 percent to 25 percent of clubs are never coming back into operation after pandemic-related immunity. Whatever the goal, you can help build and sustain an exercise routine to achieve it. Doing so can take several forms. You could require restrictions. About 60 percent to 75 percent of members to book classes via a scheduler because members are returning to clubs, covering operating then they must make a commitment. A calendar expenses but leaving profit margins dry. Big tech reminder would then trigger them to follow through. companies are attempting to substitute for what Classes where members join and follow along clubs offer, and the market cap of digital fitness are easier and reduce resistance. During class, players such as Apple, Google and Amazon is equal acknowledge members by name to recognize their to that of the GDP of Japan. efforts and build community. Commitment to a We also have vaccines on the way to returning us behavior, triggers for an easy action and rewards are to “normal” life and a population hyperaware of their powerful components of sustained routine. general health and immunity to infection. The forces As you offer virtual products, stick to your core job are pushing and pulling in a complex way. to be done. Book members into virtual workouts for If your business has survived, it is time to capture a formal commitment, then remind them to check the commercial treasure on the other side. Not just in. Leverage live video coaching to allow the coach to return to 2019 levels but to capitalize on excess to interact, recognize and reward. Then, overlay demand in the wake of club closures. Consumers’ gamification so a workout at home and a workout at fresh new demand is to help them improve their the gym matter the same. Lastly, position your brand immune system. If you miss helping them meet as the big tent of fitness in a member’s life. Product this demand, you’ll miss the biggest tailwind in our offerings change with the times, but the core “jobs industry’s history. Some operators argue that hybridization will be to be done” remain the same. the macro theme of 2021; others say that strategy was just a 2020 quick fix. I am in the former camp BIO and believe hybridization will be the key trend, but Emmett Williams has worked worldwide in the why? And how to address it? fitness industry, returning recently to Australia after If you are unfamiliar with Clay Christensen’s “jobs nine years in the United States. Having built and to be done” theory, check out this short video on owned gyms on one side of the ledger, to having YouTube; it is as relevant now as it was before the owned and grown international sales and marketing pandemic. The theory suggests we are never selling company CFM on the other side of the ledger, a product to a consumer. Rather, the consumer hires Williams now allocates most of his time as partner us to get a job done, and the trick is establishing in wearable technology company Myzone. He has what that job is. Products change, but jobs often been named to Fitness Australia’s prestigious Roll of remain the same. Honor for excellence in leadership, and he accepted Ask yourself and your members: what is the job IHRSA’s Supplier of the Year award on behalf of to be done? Your job is to help build and sustain an Myzone. Williams is on the board of IHRSA’s Industry exercise routine so members can “fill in the blank” Partner Council as well as the Global Health and -- for example, lose weight, reduce stress, build Fitness Alliance. 6 FEBRUARY 2021
Digital d ne right. Your class experience enjoyed by everyone, at the same time. In the gym, at home or outside, with MZ-Remote we're stronger together. myzone.org/mz-remote 7 FEBRUARY 2021
SPONSOR: FREEMOTION BOOST MEMBER ENGAGEMENT WITH THE NETFLIX EFFECT IN 2021 That sense of accomplishment people get after binge-watching a series on Netflix can be replicated for your members with their workouts if you apply these principles. BY JEFF ESSWEIN, VICE-PRESIDENT OF STRATEGIC ACCOUNTS AND DIGITAL CONTENT, FREEMOTION FITNESS T iger King. The Last Dance. Ozark. The Queen’s Gambit. These are just some of the blockbuster Netflix series you may have marathon-watched over your excitement after viewing the much-anticipated final episode. Stoke an intense level of engagement with the past year. immersive digital content that builds a bond Not only has Netflix revolutionized the way we between the member and their coach. Build a library watch movies and shows, but it also has created of progressive, coach-led and studio workouts a new phenomenon: the Netflix effect. That “can’t that members can work through to achieve their stop, won’t stop” feeling you get when you reach the next fitness goal. When a member is supported end of an episode and click to start the next one. in developing a lasting fitness habit, the operator Why does this happen? What’s so addictive about benefits from an engaged, enthusiastic member. Netflix that we neglect sleep, household duties and A progressive workout series doesn’t just mean more in a bid to uncover the secrets of a series we’re giving members multiple workouts in a row. Enable desperate to complete? gym-goers to build up their fitness and confidence Much of the reason we consume a Netflix series levels over time, in the same way a TV series unveils like we have no time to lose comes down to the the story piece by piece with each episode. This is pleasure principle, as explained by Harvard Health. what makes the fitness experience more addictive. When we complete an episode or an entire series, Engage with club members via social channels we feel a sense of accomplishment. This, in turn, and encourage them to share their experiences, triggers a surge of dopamine in our brains. generating that all-important word of mouth that It’s this dopamine hit—and the desire to keep that boosts member referrals. Prompt members to review feeling going—that motivates us to continue seeking and recommend your club’s streaming offerings and out the pleasure source (e.g., the next episode). A suggest additional fitness content that may interest behavior loop is formed that compels us to do more them. of that activity, whatever it may be. If the Netflix effect can keep people hooked on When you succeed in bringing the Netflix effect TV, how can we create the Netflix effect in fitness to to the commercial fitness sector, members will keep members coming back? eagerly swap an evening watching TV for an evening To make fitness something that members can’t get working out with a favorite coach. Once a member enough of, apply some of the principles that Netflix experiences just how incredible a progressive series uses. Why give members an amazing, on-demand is, they want to continue until they reach the end. fitness experience in your facility only to end it after Then—and here’s the crucial part—they’ll want to click a single workout? Instead, provide a progressive “next,” which creates a retention magnet for the workout series that draws members in with the first facility. session, then gradually feed their appetite with more great content—enabling them to continue their BIO journey over several days or months. Jeff Esswein is vice-president of strategic accounts When people reach the end of a series, that’s and digital content for Freemotion Fitness. He has when they receive that dopamine rush, making them experience as a club operator, as president of a hungry for more and enhancing their attendance, sports and entertainment business for an investment engagement and retention. Consider the many times firm, as COO of Velocity World Media, and as founder you compared notes with a friend, colleague or and EVP of ClubCom. Click here to learn more about family member on what episode you’re on, or shared the revolutionary iFit-powered 22 SERIES. 8 FEBRUARY 2021
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FOUR TRENDS THAT WILL AFFECT THE FUTURE OF THE HVLP MARKET IN 2021 Despite the downturn in the fitness business due to the COVID-19 pandemic, well-run high-volume, low-price health clubs have the ability to grow during 2021, based on these four trends in this market. BY ART CURTIS, PRESIDENT, CURTIS CLUB ADVISORS LLC C ongratulations to those or you whose gyms have survived the pandemic thus far. You have probably taken decisive actions to manage your Adjusting the cost structure to the new revenue realities will be critical and challenging. The original thesis for the HVLP cash, restructure debt in some cases, renegotiated model was predicated on the assumption that in the leases, received PPP funds when eligible, perhaps typical multi-purpose cleaned up a weak balance sheet, reduced costs clubs most people wherever possible, implemented stringent new safety and sanitation protocols, all while trying to “Operating in 2021 will used relatively little of the club. The early keep your gym staffs and management teams in continue to revolve HVLPs scaled down place. Unfortunately, operating in 2021 will continue the club to include to revolve around the ability of club companies, around the ability of club only the basic including high-volume, low price clubs (HVLPs), to adapt and operate in an environment shaped companies to adapt and elements that were used most often by the uncertain course of the virus until there is operate in an environment by most members. widespread vaccination over at least the next 12 The gyms required months. Until then, it is likely that we will continue shaped by the uncertain lower capital, to have to operate in an environment where we will have substantially lower membership levels course of the virus…” occupancy and operating costs. They resulting in substantially less revenue. were targeted to Here are four trends to look for in the HVLP the masses at a low price point and produced high market in 2021. operating margins. Fast forward to the last five years 10 FEBRUARY 2021
where many HVLPs have added back many of the of their digital options, such as low-cost digital amenities, such as group exercise (cycling, HIIT, etc.), memberships as an alternative to cancellations/ cardio theater, childcare, even court sports and pools freezes, or as part of an upgraded membership. in some cases. The boxes have gotten bigger while Several companies have already started and/or are capital, occupancy and operating costs have gone considering adding virtual personal training to their up, requiring higher revenues from both dues and offering. profit centers. Look for operators to revisit some of their assumptions and take a much harder look at Out of crisis comes opportunity, especially the profitability of the larger format HVLP models for the strongest of the HVLP companies. with more amenities and potentially scale back to As a result of the large number of business the biggest profit contributors. failures resulting from the pandemic, there will be a surplus of available space with lower rents that Safety has moved to the forefront along with should persist for several years in many markets, convincing the public and government that making new development attractive. There are also gyms are safe. Gym safety has taken on a whole acquisition opportunities as some companies choose new meaning since the start of the pandemic. Today, to leave certain markets or franchisees who wish to we are as likely to talk to members exit. These favorable dynamics will and prospects about our sanitizing likely lead to additional new capital and cleaning protocols, mask “In 2021 you are likely to being invested into the sector’s requirements, ventilation systems best operators. Although many and social distancing practices as see some HVLPs testing companies will need to take a pause we are about our equipment and or at least slow their growth until programs. The newly released the monetization of their their cash positions are stronger, IHRSA Commitment to Active & Safe Pledge will further reinforce digital options…” the HVLP companies with relatively strong balance sheets and good this messaging and hopefully access to growth capital will have reassure policymakers and public health officials substantial opportunities for growth, both within that gyms are safe and should not be shut down franchised systems as well as company-owned multi- during the pandemic without evidence of being unit businesses. The next 12 to 24 months will see a major source of COVID-19 transmission. HVLPs the strongest operators further strengthen their will widely commit to the active and safe pledge in competitive position. 2021 and continue to emphasize their commitment to member safety in member communications and BIO promotions to prospects. Art Curtis is president of Curtis Club Advisors LLC. If you are not thinking about your digital He also is a member of the strategy, you are not thinking. The pandemic board of directors for Austin has served as a catalyst that has supercharged the Fitness Group LLC, which does development and implementation of a variety of business as Orangetheory digital tools. Members have been kept engaged by Fitness in multiple markets. providing valued content on various topics related Curtis has more than 30 years to exercise, health and wellness as well as with on- of experience as a CEO and COO of several leading demand exercise programs for at-home use. HVLPs health club and spa companies, including Millennium that offer group exercise will continue to offer on- Partners Sports Club Management LLC (dba Sports demand classes as well as live streaming of classes Club/LA and Reebok Sports Club/NY), Stonewater, as an alternative solution when their gyms are shut Wellbridge, Columbia Association and U.S. Health down or capacities reduced or for members who are Inc. He also served as a member of IHRSA’s board not comfortable going to their gyms. In 2021 you are of directors for seven years, including one year as likely to see some HVLPs testing the monetization chairman of the board. 11 FEBRUARY 2021
SPONSOR: LES MILLS DIGITAL FITNESS TRENDS FOR THE NEXT DECADE Club operators will have to adapt to these five trends that will affect the fitness industry for the next decade. BY HANNAH CAMPBELL, CONTENT PRODUCER, LES MILLS T he fitness market has felt the impact of the COVID-19 epidemic, and what happens in 2021 largely depends on the speed and scale of a global creating a competitive environment that can help clubs attract and retain members. Pandemic restrictions also brought an opportunity vaccine rollout. As clubs look forward, exciting new for instructors to upskill and adapt to this new digital ideas and technology have emerged. These key age. Expect more talented instructors who have digital fitness trends will shape the next decade: taken time to develop skills and are eager to teach as restrictions ease. A fully integrated fitness experience. Consumers expect a seamless digital fitness Tech-savvy clientele. The fitness industry grew experience that fits their lifestyle, with a up with baby boomers and Gen X, but the game combination of classes that are live, virtual in-club has changed and so must the approach of clubs. and on-demand. Successful clubs will offer a range Research shows that millennials and Gen Z now of workouts and a wide variety of fitness options make up 80 percent of health club members and online and offline. Tracking changes and trends account for 89 percent of total users of online or for seasonality and class popularity is also vital to app-based workouts. Members of Generation Active keeping schedules fresh. One asset that no big tech have different tastes from their predecessors and players can replicate is the community built into the expect technology as standard to enhance their club environment. Member outreach and driving this workout experience. They prefer working out in community-centric culture across social media will groups, instructors with substance over style and be crucial in member retention. smart integration of technology, which clubs must be During the next decade, expect to see clubs able to offer to win their business during the coming working toward these goals, as those that bridge the decade. gap between the digital and physical world to offer By evaluating and developing your digital fitness seamlessly integrated fitness experiences will be the portfolio, you can reaffirm your position in the big winners in the 2020s. fitness industry in this exciting new era. Although there will be challenges, evidence suggests that this Innovation. The response to COVID-19 restrictions integrated approach is bringing more people into fast-tracked fitness innovation. As digital fitness the fitness world, especially to virtual group fitness becomes the new norm, the biggest determinant of a classes. By bringing the club experience into people’s club’s success will be quality of content they provide. homes, operators have the opportunity to reach YouTube and other sites are overflowing with free the huge untapped market of those who wouldn’t and often mediocre content, so a club’s offering typically visit a club, and help them start their fitness needs to be world-class to retain a paying audience. journey. In the short term, expect more innovative virtual and live experiences, including holographic BIO technology. Longer term, the hope is to create an Les Mills is a New Zealand-based fitness company interactive, augmented reality workout that touches aimed at creating a fitter planet. Its 140,000 on multiple senses, allowing the participant to be instructors across more than 100 countries offer completely immersed. a world-class group fitness experience every day. Hannah Campbell is part of the Les Mills New Zealand Instructors adapting. As the demand for digital team and helps bring the company’s content to life. fitness grows, inspirational individuals remain a For more information about Les Mills, visit unique selling point that rivals can’t copy. High- www.lesmills.com/us/clubs-and-facilities or email quality instructors are more in-demand than ever, them at support.usa@lesmills.com. 12 FEBRUARY 2021
THE ULTIMATE GROUP FITNESS SOLUTION LIVE — STREAMING — CONTENT — VIRTUAL +18 MORE WORLD CLASS WORKOUTS LIVE — deliver live workouts in club STREAM — stream your instructors teaching Les Mills classes VIRTUAL — screen virtual Les Mills classes in club LES MILLS CONTENT — stream Les Mills content from your app or website INCREDIBLE OFFERS IN 2021! 13 C O N T A C T U S F O R D E T A I L S : L E S M I L L S . C O M / U S / U L T I M A T E — T E L : 8 4 4 - L E S -FEBRUARY MILLS 2021
SPONSOR: INTELIVIDEO THE TRENDS IN PRICING DIGITAL FITNESS IN 2021 As more health club operators offer online fitness, the need to set appropriate pricing for those offerings takes center stage. BY ASHLEY PODOLL, CMO, INTELIVIDEO A fter a volatile year in fitness, as digital exploration and integration continue to accelerate, appropriate pricing is on operators’ On-demand. On-demand workout content reigns supreme. Although certain members appreciate the structure and accountability of livestream, most minds. To understand your business’s best pricing, online fitness enthusiasts prefer the flexibility and it’s important to understand where you fit in the convenience of on-demand workouts. overall digital fitness market. On-demand memberships for many stand-alone Digital fitness is an approximately $1 billion market brands are $15 to $30 per month depending on today and is expected to grow to $10 billion to $15 the workout library’s size and, again, a one- to billion, suggesting only a 7 percent to 10 percent two-month discount for annual plans. A sweet spot penetration to date. A recent report by L.E.K. for audio, video and even some integrated fitness Consulting noted that nearly 60 percent of digital memberships is $20 per month. On-demand price fitness subscribers who are also commercial gym points have changed little during the past few years. members increased time spent at the gym as a result of consuming digital fitness products. A Mindbody Bundled Pricing survey found that 46 percent of respondents plan Depending on your offerings, you most likely want to make virtual fitness classes a regular part of to bundle your membership. Whether you include their routine, and 40 percent are trying new studios digital fitness within established price points or they’ve never physically attended. charge more depends on factors such as the volume The data supports adopting a hybrid fitness model. of workouts in your library, how often new content is Digital will be a complement to in-person options released and app functionality. (versus a substitution) as well as a potential stand- Gyms have two common approaches: bundle digital alone product that leads to member acquisition. fitness with existing in-club memberships for slightly A product plan and pricing structure that allows higher membership rates or offer digital fitness plans subscribers to benefit from combining digital with an as an add-on option. Many clubs adopting a hybrid in-person experience or as a stand-alone product will model offer both. Prices range from $4.99 to $14.99 serve you best. for add-on memberships, while bundled rates either There are two options for product plan and pricing remain the same for all-access members or increase structures: stand-alone pricing and bundled pricing. between $4.99 to $9.99 per plan. Ultimately, 2021 will be another critical year with Stand-Alone Pricing fitness clubs, gyms and studios evolving to engage Two content delivery options exist for stand-alone members in innovative ways. A long-term digital pricing: livestream and on-demand. strategy is essential to capture more of the market Livestream. In 2020, livestreaming was an demand. Digital content sparks engagement in your immediate solution to replace revenue, provide in-club business, serving to extend memberships workouts and create community. Although many in addition to attracting new members. Price clubs initially offered free workouts, pricing evolved accordingly. to offer monthly or annual subscriptions, or paying per class. Leveraging both offerings works well in BIO hybrid models. Ashley Podoll is CMO at Intelivideo, a digital video Monthly livestream memberships began at $20 platform that enables fitness operators to transform but quickly increased to as much as $60 per month their business into a hybrid model. In her role as for niche studio offerings. Annual memberships a leading marketing executive, Podoll works with usually discount one or two months to incentivize international and national fitness franchises, social longer-term commitments. Pay-per-class rates media influencers, gyms and health clubs, boutique began at $20 per class but are trending down fitness studios and coaching businesses to build a toward a $10 to $15 fee. healthy, sustainable digital fitness offering. 14 FEBRUARY 2021
GLOBAL LEADER IN DIGITAL FITNESS EXPERIENCES Intelivideo is a digital video plaaorm enabling fitness operators to transform their business into a hybrid fitness model. TECHNOLOGY SERVICES CONTENT 15 FEBRUARY 2021 VISIT US AT WWW.INTELIVIDEO.COM
A EUROPEAN PERSPECTIVE ON WHAT’S COMING IN 2021 AND WHERE TO FOCUS YOUR EFFORTS Four factors will drive trends in 2021: health, digital, community and standards. BY JENNIFER HALSALL-DE WIT, BOARD MEMBER, EUROPE ACTIVE, AND COO, WOMEN IN FITNESS ASSOCIATION W e have either started to surf the waves in the constant tide of change or we have gotten caught in the undertow. So, what has changed and is looking for more integrated solutions to manage their greater health strategies. What’s coming: changing for our sector now and in the near future? • Better communication with the medical community Everything and nothing. • Cooperative initiatives with insurance companies The trends that were in place are still there, just • New fitness profession profiles will emerge, such as accelerated to a pace that we never previously fitness and health specialist would have thought possible. For our sector, looking • New services should be added to the club through the eyes of our members is the most operator’s product roadmap, such as wellness, important key to predict our future. Keeping a good coaching, nutrition, stress management, meditation balance of looking outwards and reflecting inwards will help us to maintain our perspective as we move Digital. If COVID-19 never happened, we would be forward. stuck with the early adopters slowly trickling toward The four interlocking domains that will drive the our digital service offerings. A global lockdown trends for 2021 and beyond are also the four areas of forced customers to find new ways to get their focus and commitment for Europe Active. exercise. Many fitness professionals and companies raced to launch online options, compounding the Health. The factors that increased the risk of not messaging about the availability of this service. Our surviving COVID reinforced the importance of being members tried our services, and we reached new healthy and the fact that being healthy is to a large audiences because our ability to scale our service. extent under a person’s control. Health and wellness For many members, the digital service will never will become a bigger driver than fitness alone. replace their in-person experience, but they are Fitness will become part of the bigger whole but no enjoying the flexibility of the added options. longer a stand-alone solution. Our members will be What’s coming: 16 FEBRUARY 2021
• Using digital fitness services to access hard- look for and ask about when it comes to signing up to-reach markets: people with disabilities, new to for a service or hiring a coach or trainer. Medical fitness, children, people with medical conditions professionals will need trust in our service before • Seamless integration of online/offline services— they will refer patients to us. think NIKE in-store/app experience The COVID crisis has shown us just how important • Sharing customers nicely by understanding that it is to prove that our facilities are safe places and customers will often try different wellness services are not contributing to the spread of infectious together and playing nicely in the sandbox together outbreaks. To this end, the CEN work that is already • Europe Active’s Digital Council will play a key being done on health and safety standards will be role in sharing trends, learnings and best expanded and extended to protect our practices from all different sectors to ours sector from scrutiny and unnecessary “A health check closures. This work and focus on these Community. For many of our members measures will continue to raise our and customers, being cut off from their is coming for credibility. This is the part of our future that is community was the heaviest burden to bear. Because of the huge digital leaps many sectors, truly in our hands at this moment. Making that were made, some communities including ours.” a commitment to the standards of our were successfully preserved in new sector can help us accelerate our step channels. The importance of the in-person from fitness to health and wellness as experience has been a void for many of us for many quickly as we were able to make the digital pivot months, and it will be a huge opportunity for club during the COVID crisis. operators to focus on their in-club experience when To help more people to be more active more often our doors are open again for good. we must make a commitment to our standards. A health check is coming for many sectors, What’s coming: including ours. This health check will look at what • An ISO-CEN Technical Specification providing unifies our communities. Inclusivity is a cornerstone guidelines on how our sector can stay open during for community. Diversity, equality and inclusion an infectious outbreak. (DEI) will be at the heart of our sector’s community • Continued work on an ISO-CEN Health and strategy for both members and employees alike. Safety Standard for the fitness sector that will The second community health check will look at our define requirements for staffing and fitness club commitment to our world and will inspect our efforts supervision and initiatives to help make it a better place. • Thousands more fitness professionals seeking What’s coming: accredited education and joining the E-REPS register • More gender balance in our sector in senior leadership roles BIO • Global action towards DEI awareness and Jennifer Halsall-de Wit is chief initiatives such as Europe Active’s Sectoral Charter operating officer of Women on Inclusivity, Anti-Discrimination and Equal- in Fitness Association by day Treatment and is a Europe Active board • More open dialogue, training and development for member for many of the hours our leaders and employees on this topic in between. About 20 years ago, she started her career Standards. Standards are invisible to many of as a personal trainer and turned her passion into our members, but this has to change in order to a career by leading two of the Canadian market’s make impactful steps for the coming years. We largest personal training departments (Bally Total can no longer afford to operate in a place where Fitness and GoodLife Fitness). She joined Basic-Fit anyone can call themselves a fitness professional. in 2011 where she led the product team at HealthCity If we really want to be a part of the greater health and Basic-Fit as well as the member retention strategy, this will start with our commitment to the department before leaving to join WIFA. At WIFA, professionalization of our sector. Our existing and she is co-creator of the WIFA L.E.A.D. Program potential customers need to know where to go for (Leadership through Elevation Awareness and trusted information. They need to know what to Discovery) program. 17 FEBRUARY 2021
SPONSOR: ABC FITNESS SOLUTIONS DIGITAL FITNESS ACCELERATED IN 2020 – NOW WHAT? Today’s health club members demand more from their workout experience, and forward-thinking club operators will need to take a more holistic approach to deliver a personalized and memorable experience. BY SHARAD MOHAN, CO-FOUNDER AND MANAGING DIRECTOR, TRAINERIZE POWERED BY ABC T he pre-pandemic tailwinds that accelerated digital fitness are the same trends now driving members’ expectations. Clubs recognized long ago that operating a virtual group class, you are limited only by your creativity. without club management and billing technology would Keep Adding Tech? not produce the results members wanted. Forward- If you are delivering value to members but putting thinking clubs created offerings to meet the demand hours of work on your front desk and back office to for digital exercise and found themselves ahead in manage, maintain, secure and reconcile data from a 2020. The competition is catching up and addressing handful of disparate software solutions, you’re creating more holistic services through digital, including undue strain on your club. habit and nutrition coaching. What’s next? In 2021, a The good news? Software ecosystems continually comprehensive approach to digitally delivering unique increase their level of sophistication and integration, value is a necessity. but not all are created equal. Forward-thinking club operators will take a more holistic view of their Hit the Reset Button technology stack’s impact on the bottom line and their When you first thought about adding digital to your ability to deliver an incredible member experience. club as a value-add or a new paid package, you likely To meet evolved member demands in 2021 and started with the member journey and experience. beyond, clubs must: Members are savvy to digital-only fitness through • Consider which digital engagement solutions truly options from Apple Fitness+ and Peloton to free bring value to members YouTube videos. Expectations in 2021 are far higher • Learn how and where to implement technology to than previous years. maximize staff effectiveness Consider if your additions reflect your brand and • Look critically at the technology ecosystem to find have made a difference to member loyalty. Do your efficient solutions members respond to personalized interactions and Above all, be a core part of members’ daily fitness accountability? Should you focus on in-club tech and journeys from the moment they wake up. Drive this adding value for your personal training team? Your with a branded mobile fitness app, tied to consumer competitors also are assessing this, and you need to wearables and devices, to give members daily stand out. motivation to be active, inspire healthy food choices and influence positive behavioral change. Imagine if a The Year of Force Multipliers club member wakes up, and the first thing their Apple Members crave a personalized experience, which Watch (with your brand!) tells them is: “Remember to hinges on a staff hyperaware of member needs. This have that first glass of water.” This builds an emotional is tough when staff turnover is at 50-70 percent, with connection to your brand. Embrace optionality—beyond the pandemic pushing many above that average. Your the ways you are a part of your members’ choices team is working with less bandwidth, while members today, consider how to influence when and through have more fitness options. Are your digital options a what channels they engage with those choices. force multiplier helping every team member be more effective? BIO Your members believe in health and wellness, and Sharad Mohan is the co-founder and managing director community breeds engagement and accountability. of Trainerize powered by ABC and the driving force Contrast this with their experience with their at-home behind its mission to make fitness accessible. As part of stationary bike or an on-demand fitness class. Consider the ABC Fitness Solutions team, Mohan helps fitness ways you can connect with them throughout their businesses leverage technology to stay relevant in the fitness journey and which digital programs deliver digital age and engage people in new ways using mobile fitness and boost motivation. Whether through hosted and wearable devices. Connect with Mohan and stay challenges in an app, nutrition tips or an e-mail after up to speed with fitness industry innovation. 18 FEBRUARY 2021
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SPONSOR: EXER THE FUTURE IS HYBRID: HOW TO LEVEL UP YOUR VIRTUAL OFFERING To succeed in a new digital fitness world, health club operators must craft digital fitness experiences that deliver the same value of in-person classes. These three keys will help you do so. BY CLINT GEHDE, CO-FOUNDER AND HEAD COACH, EXER T he $94 billion fitness industry is undergoing a digital transformation, with the digital fitness sector alone forecast to reach $27.4 billion in 2022. Brands use data-powered tools to enhance the experience. 2. Evolve into a creative streaming professional, and are capitalizing on the opportunity, as seen in Apple’s hone that craft to stay ahead of the competition. Pay recent introduction of Fitness+, Lululemon’s acquisition attention to all the details that go into streaming a pro- of Mirror, and the rise of smart home gyms such as style workout: choosing locations and backgrounds, Tempo and Tonal. and optimizing lighting, music selection and audio Consumer preferences are changing, with exploding broadcast levels. Live workouts can be broadcast to interest in livestreamed workouts, new fitness apps and multiple social platforms at once, and real-time timer wearable technology. Since March 2020, 85 percent visuals can delineate segment lengths and indicate of Mindbody consumers have attended livestreamed what exercises are coming next. Breakout rooms, classes weekly versus 7 percent in 2019. As a result of athlete spotlights and group competitions offer novel pandemic-related restrictions worldwide, people can ways to engage participants. work out more frequently from the comfort of their homes. With 46 percent of participants intending to 3. Leverage artificial intelligence to simulate the make virtual classes part of their weekly routine even in-person studio experience and enhance your ability after studios reopen, a virtual arm will be essential for to connect with your community. AI-powered tools gyms and studios to thrive. can enhance virtual workouts by providing real-time In a hybrid world, fitness professionals and gym/ metrics that coaches can use to personalize every studio owners must build a virtual side of their business athlete’s experience, deliver accountability and that complements the in-person experience. This will feedback, and monitor progress over time. AI can give help retain current members, but it is also how growth you a second set of eyes on every athlete in your group will happen: A recent Mindbody survey revealed that sessions, and it can even augment the experience with 40 percent of consumers are booking virtual workouts automatic rep counting and real-time form correction. with studios they have never physically visited, allowing those businesses to reach “digital-first” clients. Taking Ultimately, the coaches who will thrive in our virtual fitness seriously gives businesses the concrete increasingly hybridized world will be those who advantage of reaching consumers where they make leverage the tools at their disposal. These platforms, buying decisions. tools and innovations can engage and strengthen To truly succeed, coaches need to craft digital fitness fitness communities and enhance the virtual experiences that deliver the same value that in-person experience, leading to a strong and growing business. classes gave consumers in the past. This is possible by leveraging the right toolset—one that includes best-of- BIO breed streaming platforms and artificial intelligence- Clint Gehde is the co-founder and head coach at powered engagement enhancements. Exer, a fitness AI startup building tools to empower The three keys to driving success are: coaches and practitioners. Exer’s Studio app delivers motion tracking, accountability and engagement 1. Deliver a virtual coaching experience that meets tools to virtual fitness workouts using the devices consumer expectations formed in person. A coach people already own. Exer’s PT app (in beta testing) must bring energy, draw out motivation from athletes enhances patient sessions, both in and out of and monitor progress over time. Coaches are a critical the clinic, to increase adherence to protocol and source of accountability, and they will need to become maximize positive patient outcomes. For more fluent in livestreaming and on-demand platforms and information, email hello@exerstudio.com. 20 FEBRUARY 2021
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SALES AND MARKETING TRENDS IN A NEW ERA OF THE FITNESS INDUSTRY Sales and marketing are even more vital for the fitness industry as COVID-19 continues to impact the industry and make people hesitant to join or rejoin health clubs. BY BILL MCBRIDE, CEO, ACTIVE WELLNESS, AND CEO, BMC3 CONSULTING I n 2021, the fitness industry will need to focus on sales and marketing for an evolved consumer. Consumers always evolve in how they process, Benefits are specific to the individual. For some, it is feeling safe (or at least safer than just about any other place). For others, it is getting their analyze and decide on the products they buy. desired health and fitness results or boosting Some things remain the same: immunity. For yet others, it is having emotion is what triggers buying; fun and enjoying social engagement. logic justifies decisions to buy or not “Emotion is what Many operators view membership to buy. We have to revisit our core triggers buying; logic sales as a part of the service desk, MOD and other staff responsibilities. features, advantages and benefits justifies decisions to Consumers are more educated than paradigm within our industry. Features now include cleaning, buy or not to buy. ” ever. They typically have researched us online, may have talked to other sanitizing and disinfecting; members and fundamentally know transparency; equipment spacing; about us before they visit for a tour. member social distancing; professionalism; We need to treat them with the intellectual respect outdoor fitness areas; personal training spaces/ they deserve and not “sell.” We are buyers’ helpers, pods and events, etc. coaches, influencers and friends who are creating win- Advantages include reduction of risk, knowledge win relationships. I’m not advocating eliminating your to make personal decisions, trust, comfort, sales team; I’m talking about augmenting dedicated confidence, expectation of results and human membership sales functions and evolving into overall energy. team approaches to deliver for our consumers. 22 FEBRUARY 2021
Selling is Solving. Selling is Serving. members what to expect. Highlight member We have to have a team approach to getting and testimonials about your facility’s attention to keeping members. This is a revisit to the roots detail and professionalism. Videos and testimonials or our industry. We all have two jobs. Part of tell a compelling story, but they must be short and keeping members is making sure they get results. to the point at about 30 to 90 seconds each. Programs that benefit our consumers are equally I’m a big believer in the voice of the customer, important. Consider ancillary revenue programs member experience management and utilizing for member results. data for profitability. Find a system that gives you The old school membership a daily pulse on your facilities with sales approach is no longer valid. regard to net promoter scores, Our membership enrollment “Our messaging must those likely to quit, those you process has to evolve to our consumers’ current, evolved change to be more should target for ancillary revenue and real-time feedback that you needs and requirements. professional, safe, can operationalize. It also should The foundational system of give you the ability within the membership sales is a solid trustworthy or credible.” portal to get your net promoters to sales CRM. Look for a program review you on Google with high star that helps manage leads and ratings and the ability for your net prospects A-Z while also having a social input feed promoters to refer members directly with a special that allows you to see your prospect’s social media VIP guest membership trial offer. profile before they show up, giving you additional I love sales and marketing technologies that valuable information. This also ties into your generate revenue. marketing outbound initiatives and measurement My point is that in 2021, you will need to use for marketing ROI. systems to convert information to data and data to profitability. Marketing Our messaging must change to be more BIO professional, safe, trustworthy or credible. At the Bill McBride is co-founder, core they must focus on fitness, health, wellness president and CEO of Active and social. Wellness, and he is founder, We have to rely less on promotion and more on president and CEO of BMC3 value. For years, the industry has preached that Consulting. He has served you need a “hook” to get people to act—I agree. as the chairman of the But what that hook is may have changed. Today, board of directors for IHRSA we need an emotional hook. Promotions are and MACMA (Mid-Atlantic valuable and still relevant, but they shouldn’t be Club Management Association) and has been a the dominant message. They should be a value-add board member on ACE’s Industry Advisory Panel to the dominant marketing message of: and an editor for ACSM’s Facility Standards & • Here’s why Guidelines 5th Edition. He is an international • Here’s why us presenter and industry recognized expert in sales, • Here’s why now (promotion or sense of urgency) sales management, marketing, retention, club • Here’s how – easily operations, customer service, member experience Additionally, marketing in materials and on your and leadership. McBride has presented at IHRSA, website should contain current realities—masks, IHRSA Institute, IHRSA Profitability Conference, social distancing, cleaning protocols, etc. And not IHRSA Asia-Pacific Forum, IHRSA European just on the cover pages, but in the depth of the Conference, FitLife, CCD, NEHRSA, Club Industry, site. Videos are more important than ever, showing FILEX, Russian Fitness Festival, FIA & ChinaFit. 23 FEBRUARY 2021
SPONSOR: FITNESSONDEMAND RESHAPING AND SUPERCHARGING THE MEMBER EXPERIENCE IN 2021 To create a better member experience in 2021, you will need to keep these four important things in mind. BY ANDREW EVENSON, SENIOR DIRECTOR OPERATIONS AND BRAND STRATEGY, FITNESS ON DEMAND 2 020 was a year of problem solving, as club operators pivoted operations during mandated shutdowns and weathered financial challenges Indoor/outdoor workout experiences. We will see growing member interest in an indoor/outdoor club experience. First, member engagement in club- totaling $15 billion in industry losses. 2021 is quite organized outdoor running and walking clubs will different. A primary goal for club operators now is to return, blending opportunities to socialize with other reshape and supercharge the member experience in runners with pre-and post-run club facilities and a rapidly evolving fitness landscape that has shifted instructor-led runs. Second, the outdoor group classes member expectations. and workout spaces that many clubs experimented Here are four important things for operators to with during the pandemic created ongoing interest consider: in an indoor-outdoor club model. Take advantage of Parity between in-club and at-home flexible club areas that open to the outside, converted experience. Working out at home and accessing exterior parking lots and other spaces that enable club fitness content on a device cannot be treated as outdoor group fitness or solo workouts. a secondary option or as an offering of lesser value than an in-club offering. If the pandemic taught us Socialized experiences. Members are eager to anything, it’s that members have an appetite for re-establish routines of working out and engaging streaming content from their club, and streaming with their club communities. Club operators must offers many ways to serve members. As clubs have recognize and encourage this need for connection. reopened after mandated shutdowns, at-home Share highly usable content via email and social streaming numbers have not significantly diminished. channels: nutrition tips, diet plans, workouts from In 2021, club success will increasingly come down instructors, classes to stream at home, promotion to the adoption of a truly hybrid model of operations, of new classes and club updates. Going forward, it ensuring that members who stream a class at home is important to integrate all virtual, social and in- feel the same quality experience or intense workout that they do in an instructor-led class at the club. club opportunities for members to engage with your Total experiential parity means investing the same staff, instructors and others in a truly 360-degree resources, time and care into on-premises and on-the- experiential environment. go member offerings. BIO Focus on small group experiences. Large group Andrew Evenson is senior director operations fitness classes may be slow to return to pre-pandemic and brand strategy at FitnessOnDemand, a world levels. Expect both a continued focus on small group leader in curated fitness content. FitnessOnDemand training as well as a surge in members returning to partners with world-leading fitness brands, content gain access to cardio equipment, machines and free creators and specialist instructors to bring the best weights unavailable at home. The six- to 10-person in HIIT, core strength, cycling, specialty and other in-studio group classes necessary during pandemic fitness classes to managers of clubs and fitness restrictions will continue to be popular, with members facilities across the world. FitnessOnDemand is appreciating the personalized attention that a small available in studio, on any club display system and class size enables. This will have an impact on class via FLEX by FitnessOnDemand, streaming to member scheduling, instructor bookings and availability, with smartphones, tablets and other devices in club, at an ultimate need for more classes to cater to demand. home or on the go. For more information visit Plan for increased interest in both on-site and virtual www.fitnessondemand247.com or email aevenson@ instructor training for one-on-one sessions. fitnessondemand247.com. 24 FEBRUARY 2021
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