What can we learn
from the growth of the
boutiques?
The way
we were…
In April 1992, Network featured a profile of Justin Grant, ‘Australia’s
power walking guru’ and inventor of backpack-like portable music
system the Mobile Master Blaster. “It has been hard to promote fitness
walking as a class because people don’t see the value of going into
a gym and paying for something they perceive they can do at home”
Grant lamented.
Elsewhere, the issue of tax-deductible expenses for fitness
instructors was discussed after several Network Members had
claims disallowed “largely because the tax assessor was unfamiliar
with the requirements of working in the fitness industry”. Everything
from footwear to ongoing education had come under scrutiny.
“Aerobic tapes were not an allowable expense because they could
be used for entertainment when not used in teaching. It was pointed
out that they would have to be left at the centre when not in use.”
Leotards, meanwhile, “were deemed unnecessary and not specific to
employment and could not be claimed unless they had ‘staff’ or the
club logo on them.”
1 thing I’ve learnt
Annette Lackovic, Fitness Sales Expert
annettelackovic.com
“One thing I have learnt in my years in sales
is that the more things your customer has to
believe about your product or service, the
more No’s you will get. Sometimes less is more
– and this is one of those instances.
When selling memberships or training,
people too often try to sell the prospect all
of the benefits they will gain in addition to
achieving their number one stated goal. For
example ‘You’ll lose weight, tone up, get fit and
get more energy’. That’s four things they are
being asked to believe in the sales process.
It’s understandable that we get passionate
about the many side effects of getting fit –
but it pays to have a laser focus with your
conversation and stick with only one benefit –
their ultimate goal. You can talk about that one
thing by addressing their frustrations, concerns,
desires and then presenting the solution.
Talking about just that one thing will greatly
increase your conversions.”
Boutique fitness clubs are no longer
luxury enclaves to a handful of elite
fitness fanatics; in the past five years
they have become a global phenomenon
that is disrupting not only mainstream
health clubs, but also small box 24-hour
operations. Boutique brands enjoying
huge growth, some locally and some
overseas, include Soul Cycle, CrossFit,
Orange Theory Fitness, Pure Barre and
F45 – and many more are rapidly emerging. According to a 2014
Life Fitness report, the number of boutique clubs in the US grew
by 400 per cent between 2010 and 2014.
The 2013 AC Nielsen Report stated ‘Preferred exercise
spaces are shifting – despite their high cost, small boutique clubs
with a single activity are now the second most popular venue’
and the 2014 IHRSA Health Club Consumer Report showed that
boutiques had 21 per cent of the $22 billion US fitness market.
So what’s so special about the boutique concept? On the
surface it’s quite simple; give a small space a cool appearance
and populate it with committed instructors delivering
consistently great workouts. Done correctly, this results in an
exciting experience with an element of exclusivity for the user
– and significantly higher revenue per customer than traditional
health clubs for the business operator. Soul Cycle, for example,
charges around $35 for a single class, whereas a traditional club
just across the road that also offers indoor cycle classes charges
just twenty dollars more for an all-inclusive monthly membership.
Clearly, the boutique model is the far more profitable.
Our industry delivers a wide range of fitness offerings,
including pre-choreographed group exercise classes, HIIT
sessions, traditional strength training, boot camps, Pilates,
yoga, aqua classes, functional training and more in an effort to
cover the wide range of consumer wants and needs. However,
Gen Y (aged between 18 and 35) are excited by personalisation
and the boutiques are satisfying this desire by offering
focused workouts delivered by rock star instructors who live
and breathe the brand. The higher profitability of the business
model has enabled boutiques to recruit and retain instructors
by compensating them far above the normal industry pay rate.
In fact, many boutiques pay their instructors a base salary and
then a bonus based on participant numbers. It’s not uncommon
for marque instructors to be paid $200-$300 per class.
Boutiques provide a tremendous opportunity to attract
more consumers into our industry at a higher price point. Many
operators of the traditional club model are embracing the
boutique concept and incorporating it into their facilities. One
Fit n Fast club in Sydney, for example, recently incorporated
YogaBar into its business model. Could you learn some lessons
from the success of the boutiques?
Nigel Champion, Executive Director
[email protected]
NETWORK SPRING 2016 | 9