This year’s SIBEC Europe event in Madeira was one of the most successful in its 18 years history. The event sold out well ahead of schedule with a record number of operators and suppliers attending.
To set the scene ahead of the two days of intense business networking and face to face meetings, the event opened with the now well established industry debate, featuring four key players from the fitness sector and chaired by Health Club Management’s editor, Kate Cracknell.
Jim Graham (JG) - Chief Operating Officer, The Gym Group
Sarah Leonie (SL) - Group Fitness Manager, Places for People Leisure (PfPL)
Dave Wright (DW) - CEO, CFM and MyZone
Diane Vesey (DV) - Director of European Operations , Anytime Fitness LLC
Kate Cracknell (KC) - Sports Direct has announced that it will be offering gym memberships for £5 a month. What impact might this have on the rest of the market?
JG - It’s difficult to comment until we see whether £5 really is the new low-cost price floor, or if it’s a pre-sale marketing tactic. If they really are offering £5 memberships then the mid-market bracket will be re-defined again.
It’s not possible to run a profitable business charging a monthly membership of £5, so this would clearly be a loss leader to drive retail sales. Loss leading has a chequered history - one of the key challenges would be finding quality staff happy to work for a loss leading product.
DW - This could redefine what we consider affordable fitness. A few years ago that space was occupied by Fitness First and LA Fitness. In the US Planet Fitness have 838 clubs and 4 million members enjoying memberships at $5.95. This is a fantastic marketing ploy from Mike Astley who is looking to make waves in the industry.
KC to SL - Do you consider competing on cost?
Half of our centres now offer gym only membership and are able to be reactive on price when low cost competition opens up on the doorstep. That said, we recognise the need to differentiate our product from the budget clubs.
We're family orientated and offer much more than just gym and classes. We operate with the wider view of being perfectly placed in community and able to respond to the health agenda. Rather than go head to head, our plan is to differentiate and not just drop prices. We need to focus on our services and be confident with our strategy. We certainly won’t be throwing all that away to compete with a £5 membership.
DV - You could take the view that anything that gets more people engaging in exercise is a good thing. But I would question what their experience going to be like, the service levels etc
Tara Dillon (floor) - The whole sector needs to stop acting like a shop – we’re selling fitness on the cheap, but ultimately you get what you pay for and I don’t think it will work. We mustn't panic as the calibre of staff will undoubtedly be weak.
As a sector we’re diversifying, but we need to do more if we’re going to expand from the 13% currently going to the gym. We need to look at health agenda and consider how we can truly make an impact. We need to grow up as a sector - and take ourselves seriously.
SL - My concern is the quality of service that people will receive in these budget clubs. If they haven't been to a gym before and have never used equipment and they join a gym for a short amount of time with no interaction will we lose them forever?
JG- When I joined the sector the one thing that really surprised me was the lack of understanding that we are in the hospitality and service industry. We have a complex emotional sell. People don’t want to buy our product; it’s painful to consume; and they’re often uncomfortable in the environment itself. We put low paid staff in front of the customer so it should come as no surprise that we don't offer the best service skills. Our focus is on identifying what people are trying to achieve and getting them there.
Robin Gargrave (floor) - A gym in a retail store with very low prices could certainly reduce cultural barriers to exercise and potentially engage the hard to reach inactive audience. KC - With the likes of Apple entering the fitness tech market, and wearables getting smarter all the time, we’re set to see a massive growth in individuals tracking and monitoring their own health and fitness. How will the gym sector be impacted by this trend?<
DW – I believe operators need to own the data of their members. Many clubs now recommend members BYOD ‘bring your own device’ - it’s then down to the club to ensure the facility is compatible with member devices.
KC - If people are using their own devices how does an operator capture that data and get involved?
DV – There is such rapid change and diverse offerings out there creating awareness of personal health which is a positive thing. We're trialling the fitbit to increase our value proposition and also working with the Map My Fitness App.
KC - As these wearables get smarter, is there still a role for the club?
DV - You can't beat social interaction. We don't sell fitness, we sell motivation.
JG - As an operator, there is an enormous amount of money being wasted on building devices that are already out there. We’re not rushing into this space, after all, will people choose their gym based on its compatibility with their fitness app? We happy to be entirely agnostic and let members choose their own wearable devices. The real question is – whilst people love measuring their results and sharing them on social media, are they using that data to change behaviour and shape future outcomes? There is no substitute for the expertise a trainer can provide.
SL – We’re looking at the wider health agenda and public health’s constant need for data. These devices can be powerful tools to help us manage, monitor and track.
KC - Supermarkets know everything about you. Why aren't we better at this?
SL - Data is certainly key to cementing our relationships with GPs and the wider health community.
JG – We have a perfect record of attendance data from our sites, but the big question is what members actually do in our gyms? We have a blind spot of what they do in the building which reduces any credible proposition to engage. In the future I imagine network enabled gyms allowing us to know who is doing what and when. This will be critical for the tech roadmap of fitness businesses. The tech is there now, but it’s not where we need it to be yet.
KC - How close is wearable tech to actually providing ongoing usable data for all consumers?
DW – The ability to measure and record health data is there in various formats, but it will be at least 5 years until it’s palatable for the consumer as a commercial proposition.