Gym Factory talk in Madrid

During May 2016, I was invited to give a talk to stakeholders from the Spanish heath club industry about my research into the emergence of boutique fitness.

Following my talk, the organisers sent over some follow-up questions which are below. Their is also a Spanish version.

In your speech you said that clients would tend to pay $0 for a gym where there is only equipment and no service. Do you think this could be a reality in the near future?

I was interested in a comment Michael O’Leary CEO of Ryanair recently made when he said he could imagine a future point when his airline tickets are free if people are prepared to pay for optional extras. The point I was making during my recent talk in Madrid is that we now have UK low-cost gyms charging €6 per month which is getting close to free. If you are pursuing a low-cost strategy then it makes sense to consider a future scenario in which people are willing to pay progressively less to access self-service resources. If so, what alternative ways could the business generate revenue?

Do you think the boutique model will “kill” the low-cost model?

No I do not. I see the fitness industry in mature markets forking along one of two distinct pathways – self service and supported. Low-cost gyms are pursuing a ‘self-service’ strategy while specialist boutiques are following a ‘supported’ strategy. One provides access to equipment at low-cost while the other provides remarkable instructor-led experiences at a higher price-point. I see them as complementary with both providing value in different ways.

Do you think that there are boutiques for all kinds of people or only for those who want “performance and efficiency” in training?

Some of the characteristics I use to define a boutique are: intimate size, narrow programme offer and expert and guided instruction. So yes, this applies to consumers seeking a high-intensity ‘performance’ experience, but there is also a need for studios offering low-intensity experiences such as Barre, Yoga and Pilates.

In Spain many classic facilities are introducing a boutique inside of the gym. Do you think this is an interesting option?

Yes this is an interesting idea that I see being tested in other countries through strategic partnerships. DavidBartonGym, which is a premium US brand, has teamed up with Cyc Fitness in New York to offer a specialist group cycling experience. This collaboration works because you are bringing two premium and aspirational brands together. I am less convinced that a multi-purpose club can successfully create boutique-style experiences inside its existing club because the discerning boutique consumer is not expecting to find them there and the gym has built its reputation on something different.

People who work in boutiques are a competitive key. Do you think that it could be also the greatest threat as managers cannot have all the control.

Yes it is true that instructors are now a core part of the strategy for successful boutique studios. This is why SoulCycle, the very successful American brand took the brave decision back in 1996 when it was founded to employ all it instructors and not to hire them by the hour. SoulCycle instructors have successful careers with the company because they are core to the brand’s success. They employ around 20 instructors for every 150 that audition. The ones that are selected receive continuing education and training.

Could you share with us the big picture about if there is a target or specific geographical area where a Boutique is more likely to operate?

The boutique fitness brands that I am most familiar have been focusing on major cities with large and dense populations. One New York studio owner said than when they are considering locations they want to be on the corner of ‘busy and busy’. London based 1Rebel select buildings that fit with its aspirational brand positioning with their first studio occupying a prime corner building adjacent to the famous ‘Gherkin’ skyscraper. Rents are very high compared to a traditional gym but this location and property strategy helps to support and justify pricing of at least $30 for a 45-minute class. It is unclear to me at present how successfully these brands will be able to move into secondary and smaller cities.