FITNESS NEWS Europe 1

European clubs urged to adjust their concept for Millennials

R eadily switching from a live class at their gym to a run with their fitness tracker and a training

session with an online coach, consumers are increasingly versatile in their fitness habits.

But fitness club operators heard at the 2015 IHRSA Euro-pean Congress in Marseille that they could take advantage of this trend – if they provide dis-tinctive products, be it in terms of pricing, service or shareable experience.

Nearly 500 participants from 30 countries flocked to the southern French city for the congress, held over four days from October 19. They visited gyms around the Med-iterranean city and had plenty of time to network in between the varied and often captivat-ing presentations held at the Palais du Pharo, overlooking the picturesque Vieux Port.

The discussions at this 15th annual IHRSA European Con-gress were placed in the con-text of digital technology, which not only opens up plenty of services for gym members but entirely alters their behaviour

with regard to consumption and interaction with brands.

A consumer study conducted by The Nielsen Company and outlined by Phillip Mills, chief ex-ecutive of Les Mills International, pointed out that the largest share of fitness participants are Millen-nials – the generation that has grown up with the internet. The survey carried out in 2013, with 4,600 respondents in 13 coun-tries, suggests that they account for about 48% of the people do-ing “gym-type activities.”

While Millennials are widely perceived to be young and spoiled, they may in fact be in their early thirties, with two children and a pension plan, and faced with worries such as high unemployment. Mills added that Generation Z, which is even more attuned to multi-media and connected technol-ogy, is nearing adulthood.

Ken Hughes, chief execu-tive at Glacier Consulting, ex-plained that the spread of Wi-Fi and 4G entirely changed the consumption and other habits of these two generations. It has blurred the line between on-line and offline activities – in

fact Hughes argued that it had entirely disappeared.

The “consumer and shop-per behaviouralist” added that technology has devalued own-ership and given rise to a new currency: experiences that may be shared on social me-dia. The compulsion to share is reflected by such oddities as plates designed with docking stations.

Hughes thus advised that brands and companies should start measuring a new value in their business: shareable experiential equity – meaning the ability to create for the consumer a special experience that may be shared on social media, and thus crucially al-lowing the brand or service provider to become “part of the conversation.”

This demand for shareable experiences has been aptly captured by the organisers of activities such as colour runs and mud runs, and many oth-ers in the entertainement and hospitality business.

An example described by Hughes was that of the Jaffle-chutes: they are sandwiches that have to be ordered on-line and are dropped with a mini-parachute, at a specific lo-cation shared with customers at the last minute – the point of this concept from Melbourne being the experience, rather than the sandwich.

Hughes further explained that companies ought to adjust to “blue-dot consumers”. They have grown up with Google Maps and are accustomed to being always literally at the centre of the map – they there-fore expect brands and service providers to come to them.

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2015You’re reading a special report from Fitness News Europe about the 2015 IHRSA European Congress, held in Marseille in October.

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October 2015

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Le Palais du Pharo in Marseille. Photo: IHRSA

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2015 IHRSA EUROPEAN CONGRESS

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Such trends have led to a partner-ship between Amazon and Audi, to get purchases delivered to the buyer’s car, or the Gymguyz concept in New York, which drives its van to the loca-tion picked by the user. In the process, consumers often don’t mind getting tracked, if this means they will get more personalised service.

Les Mills has taken these trends on board. It strongly targets Millennials with some of its latest classes as well as the trials conducted at the group’s own fitness facilities in New Zealand. They tie in with other trends described in Marseille by Phillip Mills, such as the rise of micro-gyms and the popularity of group classes.

Mills opened several micro-gyms, in-cluding CrossFit boxes in two of the group’s clubs in New Zealand. But since the CrossFit rules required that the box should be in a separate building, which is

not always feasible, the company decided to create its own high-intensity classes. They became so popular that Mills figured he may get more revenues from extra peo-ple coming into the club than he obtained from ancillary revenues derived from a separate unit.

It has become the second-largest class after Body Pump, and “it’s all Millennials,” Mills said. An aspect of these high-inten-sity classes that ties in well with the club’s purpose of motivation is that they’re of-ten more social than other group classes – with people exchanging during recovery. Mills also recommended that operators should embrace the competition that goes with this activity.

Another concept launched at one of Mills’ clubs is Chain, the group’s cycling concept. It uses “Harley-Davidson sort of imagery” and some of the same ingredi-ents as SoulCycle, such as the increased number of loudspeakers and highly ener-gising teaching. However, the usage of the cycling space was strongly raised by add-ing virtual cycling classes in off-peak time,

making sure that the members had access to a wide variety of cycling classes.

The Immersive Fitness concept launched by Les Mills, built into a handful of clubs in 2015, is an evolution of that same idea. Mills acknowledged that the cost and re-quired space wouldn’t make it accessible to all clubs, but he added that the cost was decreasing and that the rapid advances of technology were making it more efficient to design classes for this concept. One of the people who worked on them previ-ously made a battle scene in the Lord of the Rings movie that took two months and 3,000 designers, Mills said, but two years ago the designer said he could make the same scene by himself in two days.

Distinctive conceptThe rise of the Millennials is one of the trends that has most strongly influenced new fitness concepts in the last years. However, fitness club operators have also come up with new concepts that compete more efficiently amid the rise of special-ist gyms and low-cost operators, as dis-cussed in Marseille in a round table with the managers of three leading European gym groups.

Nick Coutts defined his concept from scratch when he left Holmes Place and launched Fitness Hut in Portugal with two business partners back in 2011. While the market was dominated by Holmes Place, Fitness Hut shook it up with what Coutts describes as “premium low-cost” gyms. It offers some of the most accessible prices in the Portuguese market, ranging from four to six euros per week, but at the same time it provides an outstanding ex-perience, with plenty of smart services, classes and equipment.

The challenge was entirely different for Martin Seibold, who had to fix an existing concept. He led the rapid expansion of Fitness First in Germany and then moved on to the same group in the U.K., where some of its clubs where badly under-per-forming. Seibold had to shrink the net-work from 180 to 75 gyms, and then sharply improve the remaining clubs to deal with the budget newcomers. “It has

shaken the industry and it has actually done something really good to the organ-isation, because you really then decide what you want to be,” said Seibold. He started his career as an intern at IHRSA’s international department, and received the association’s European Club Leader-ship Award in Marseille.

The former Club Med Gym also had to re-think its concept due to the arrival of low-cost gyms in France. Franck Hédin, chief executive of CMG Sports Club, acknowl-

edged that the leading gym group in and around Paris had become somewhat arro-gant. It started by ignoring the changes in the market, certain that consumers would recognise the quality of CMG clubs, but af-ter three years it changed tack with a raft of innovative adjustments.

Among the changes in contents that are most aligned with the demand from Mil-lennials, CMG Sports Club opened an Im-mersive cycling studio in one of its Paris gyms. The French group went on to exten-sively renovate its clubs, some of which dated back to the late seventies and early eighties. When a low-cost gym opens near one of CMG Sports Club’s locations, the upgraded concept is much more re-silient. The market leader may lose 3% to 5% of its members in the short term, Hédin said, but they often come back af-ter one year.

Millennial classesSeibold has observed a similar change since Fitness First U.K. revised its proposi-tion. He said that the clubs may lose mem-bers upon the arrival of a lower-priced competitor, but they often ended up get-ting twice that number of members back, due to the traffic and habits created by the low-cost gym.

As pointed out by Mills, the latest con-sumption and social trends have often led to the reinforcement of classes as part of the gyms’ offering. Group classes tend to form the most important part of the con-cept at micro-gyms, which often focus on Millennials and charge substantial fees that tend to make them particularly prof-itable.

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Fitness Park in Marseille.

Not only food for thought at the IHRSA Congress.

The Sponsor Showcase.

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2015 IHRSA EUROPEAN CONGRESS

When asked in the Nielsen research why they chose a specific club, the re-spondents chiefly pointed to location, but the number two motive was group classes, ahead of equipment.

Phillip Mills said that about 48% of Mil-lennials are engaged in group classes, and that applies for about 62% of the female Millennials. On a per square meter basis, Mills added, group classes are by far the most profitable activity – and the bigger the studio, the more profitable. “Build them cooler, and build them bigger,” he said.

Hédin boasted that the variety of the classes on offer is one of the distinctive as-pects of CMG Sports Club. “It’s also some-thing new in our industry to have such a huge choice in terms of concepts, in terms of classes,” said Hédin. “Twice a week I have someone in my office offering or pro-posing a new activity.”

Fitness Hut provides live and virtual classes. However, the company also makes a point of organising small and short group classes in the gym environ-ment. Coutts explained that such classes deliver many of the same benefits as the larger classes, such as the shared experi-ence and interaction between members, but the smaller format encourages more people to take part, instead of sticking to their workout and potentially losing their motivation faster.

Alternative providersSuch efforts help to underline the advan-tages of clubs over alternative providers, which are often regarded as a threat. Mills pointed to the example of Weight-watchers, which lost much of its market value due to the rise of other forms of in-formation on weight loss, such as wear-ables and online advisers. “We can’t let that happen to our industry,” he said.

The survey outlined by Mills found out that about 82% of gym members work out at home as well. This suggests that fitness clubs ought to offer complemen-tary services instead of regarding home workouts as a threat for their business.

“We thought that home exercise and on-line exercise and gaming was going to cannibalize the industry, but it hasn’t, in fact people are mixing it,” said Mills.

Les Mills has in fact started offering home workout packages, which may be sold by gyms at a lower price (than the packages sold directly to consumers) and with a shared profit. One of the advantages anticipated by Les Mills is that, either way, the buyers will be more motivated to take part in classes at the gym.

Connected devicesFar from regarding wearables as a threat, Andy Caddy, chief information officer at Virgin Active, discussed ways for gym operators to use these devices as part of their own business. He pointed to the example of Virgin Active’s Walbrook club in London, which was opened in August 2015 with plenty of innovative equip-ment and technology. Wristbands are used for entry and lockers, and to log on to Technogym equipment, among other functionalities.

It has been estimated that there should be about 500 billion connected devices by 2030, providing innumerable data. Caddy worked out that, if all 1.4 million Virgin Active members used wristbands with input on steps, location, heart rate and weight, that would yield 43.4 trillion data points – which raises the question of data management. The most important requirements for users are that the wear-ables should be friction-free, always on, working with open platforms and provid-ing intelligent feedback.

Several other speakers discussed the importance of staff in fitness clubs, at a time when technology may be fulfilling some of the functions of sales and re-ception employees, but the attitude and presence of staff often remains crucial for the atmosphere and the motivation of the members.

Fitness Hut has decided to do away with a staffed reception desk and instead

has “gym service” people who are on the gym floor to greet and advise the mem-bers. They encourage people to take part in ten-minute classes on the gym floor and generally add to the motivation of

the members by making the environment more sociable and dynamic.

Along the same lines, Fitness First has reduced office space to make sure that staff are out on the gym floor. Fitness First clubs in the U.K. run more classes on the gym floor than in the studios, and

there are more people engaged in them. That makes the quality of the gym staff all the more relevant, but Seibold added that it wasn’t always easy to find employ-ees who remained open to alternative or complementary concepts, such as wear-able devices and outdoor runs.

The presentations provided plenty of food for thought among the delegates, as did the more specific topics of some breakout sessions, such as a talk from Luke Carlson, chief executive of Discover Strength, about personal training man-agement; Alan Leach from West Wood Clubs in Ireland revealing the art of fit-ness advertising; or Casey Conrad, pres-ident of WBS, Communication Consul-tants, providing very practical leads on ways to build a strong sales team.

Sponsor ShowcaseTalks continued around the Sponsor Show-case, held in a light-filled room overlook-ing the Mediterranean. The participants ranged from leading equipment suppliers such as Technogym, Keiser, Cybex and Mi-lon, to technology-related firms such as Virtuagym, Exerp and GymGroups.

At a conference that was held in con-junction with IHRSA’s European Con-gress, gym owners and operators also heard in Marseille about the launch of the Universal Fitness Innovation & Transformation (UFIT) Program and Toolkit, which is meant to support di-versity in fitness. This effort is led by the UNESCO Chair and managed by Cather-ine Carty.

The 2015 IHRSA European Congress was organised in partnership with the French Health & Racquet Sportsclub As-sociation (FHRSA). The group’s president, Christophe Andanson, is the general man-ager of Les Mills Euromed and founder of Planet Fitness, a leading French fitness equipment distributor.

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Keep Cool, Marseille.

The Old Port in Marseille. Photo: IHRSA

Le Coach Sportif, Marseille.