News

ARE GYMS DEAD?

12 October 2020

Do gyms need digital transformation?

 

My favourite scene from film The Social Network, is where Mark Zuckerberg and Eduardo Saverin meet Sean Parker (played by Justin Timberlake) for dinner, in a fancy New York restaurant.

 

In a heated conversation, Eduardo tries to play down the role Sean Parker’s music streaming platform Napster had on bringing down the record industry, and Parker responds with the question, “do you want to buy a Tower Records Eduardo”?  His point was that he may have lost out in court to the established music industry, but in reality, he’d changed the industry forever, taking power, value and profit away from the big record labels.

 

Many other industries have been transformed by new technology, new apps and new ideas.

 

The products and brands that use these new ideas spot shifting consumer trends and habits, and can reframe established products and brands as old fashioned, and maybe even redundant.  COVID-19 and the lockdown period has sped this process up, with doing more things at home than elsewhere, now becoming more practical, more efficient, and maybe even more enjoyable.

 

Before kids played video games at home, they used to travel to arcades, to play them there.  More and more people choose to watch a film on Netflix at home on the sofa, rather than spend time and money going to a cinema.

 

New workout behaviours

 

And the same is happening for works outs, at the expense of gyms.

 

Pre COVID, the home exercise industry, led by innovative brands like Peloton, were already seeing significant growth.  But the WFH culture and enforced closure of gyms has been a massive accelerator in this sector.  Demand has been so high that home exercise equipment has been hard to get hold of, with many committed fitness folk turning garages, spare rooms, sheds and gardens into makeshift gyms.

 

Adding this to the rediscovery for many of the joys of running outside, there is a growing realisation that traveling to a gym to workout, might not be the best use of people’s time and money.  Maybe it’s even a bit old fashioned.

 

The growth of Peloton and the home exercise sector must be causing the same level of fear to gym owners that Uber gave black cab drivers. Originally known as the home exercise bike, Peloton is now a social fitness platform, helping likeminded communities around the world connect through its app.  Their range of home workout products increases all the time, as does the live and on-demand work out programmes, all accessed via subscriptions through their swivel screens.

 

Founder John Foley’s big ambition is to recruit 100 million Peloton users by 2035.  Considering there are only an estimated 200 million people worldwide with gym memberships, this is a rather serious target.  It’s therefore not surprising that last month, Apple announced it’s planning to launch a subscription fitness class service, expected to be $8.99 a month.  And in last few days, Spotify has launched a new personalised HIIT workout service called Spotify Pumped, which will be free to subscribers.

 

So are gyms really dead?

 

What can they do to survive?  What can they offer that home exercise can’t?

 

The budget, no-nonsense gym companies perhaps feels more at risk. With less people in city centres, and favourite equipment relatively easily replicated at home, keeping membership levels at pre-COVID levels will be difficult.  In July, The Gym Group reported that it had lost 178,000 customers over the previous three months.

 

Perhaps more premium specialist gyms, with facilities that can’t be replicated, may fair better.  Gym goers who enjoy swimming pools, boxing rings or hot yoga studios may find these hard to give up.

 

But what is clear, is that everything will be harder, more competitive, and gym brands need to offer more.  More than home-exercise can offer, and more the competition.

 

As with any category, the power of the brand will be vital.  Gym companies with strong likeable brands, who have invested in engaging with their audience in interesting and genuine ways, rather than purely driving offer led messages, will likely fair better.

 

Customer service is also key.  More than ever, there is a need for gyms to have brilliant people working in them.  Trainers who engage and make people’s workouts better, more enjoyable and more valuable.  People who make gym goers days better.  Changing rooms that are clean and an enjoyable place to be.  And perhaps little extras, to reward members with.  It still amazes me that some very expensive gym brands charge additional money to use towels.

 

Then there is the emotional sense of belonging.  Gyms that feel more like clubs, potentially have more value to people, and are harder to give up.  Clubs have communities of people who know each other, talk to each other, have coffee together.  Giving this up is giving up a part of your life.  This togetherness and sense of belonging can’t be completely replicated online.  Although interestingly, gym brands can replicate the success of brands like Peleton, in increasing their app and online possibilities, offering more opportunities for clublike engagement both in the real and virtual world.

 

As in any industry, and with every challenge, the ability to adapt will be critical, and may dictate who survives this incredibly difficult period that the industry is facing, and who sadly, does not.  There is a need for innovation, creativity and brand confidence and strength.  Gym brands that can incorporate the new realities of less travel, increased hygiene concern, less disposable income and the changes in consumer behaviours and needs will surely be more likely to succeed.

 

Perhaps we are not yet at the point where John Foley, founder of Peloton, might ask someone (Justin Timberlake style), would you buy a gym?  But if gyms don’t adapt, we might be very soon.

 

Written by Jamie Williams, originally published in New Digital Age.