What follows is a summary of a podcast between Ray Algar and Matthew Januszek.
In today’s dynamic and rapidly evolving business landscape, understanding the competitive environment and adapting to changing consumer preferences are essential for success. In this insightful discussion with fitness industry expert Ray Algar, we explore the importance of recognising unconventional sources of competition, the concept of fitness substitutes, and key takeaways for business leaders to stay ahead in their respective industries. Join us as we delve into the crucial factors for thriving in a world where competition can emerge from the most unexpected places.
In this first part of the transcript, Ray Algar, founder of Gymtopia and managing director of UK-based Oxygen Consulting, shares his background as a gym operator, his transition into becoming a strategic analyst for the fitness industry, and how his experiences help him provide better advice to clients. He also discusses the evolution of his business and his approach to identifying major trends and shifts in the fitness industry. Algar’s ability to detect trends comes from his background as a previous fitness club operator and his strategic empathy for the industry. He has a knack for storytelling, which makes his reports engaging and full of humanity, even when discussing numbers and data. He observes major shifts in the fitness industry which can appear in 10-year cycles. From the emergence of low-cost gyms at the beginning of the century to the rise of specialised boutique studios, Algar deep dives into these trends and shares his insights in comprehensive reports.
Ray Algar discusses the importance of understanding and catering to deep-seated human desires to create successful fitness businesses. He notes that regardless of the scale of a fitness facility, the key is to create spaces where people feel comfortable, have a sense of belonging, and can tap into their desire for self-improvement. Algar highlights the concept of gym substitution, where people may choose alternative fitness options like a Zumba class in an old church over a high-end fitness centre if it better meets their needs for connection and belonging. Additionally, Algar emphasises the need for businesses to measure their success beyond financial metrics, considering social and environmental factors as well. He believes that having a compelling mission and backstory can help businesses connect with consumers and create a sense of purpose.
The fitness industry is evolving rapidly, and traditional ways of documenting it may not fully capture its growth and diversity. A new way to view the industry is as a physical activity economy, a complex and ever-changing ecosystem with numerous layers and components. To succeed in this landscape, businesses must understand where they are positioned within it and be prepared to adapt. The COVID-19 pandemic has highlighted the need for businesses to rethink their strategies and consider the myriad fitness substitutes available to consumers. Bricks-and-mortar fitness facilities must weigh the pros and cons of extending into digital or other areas without overextending their capabilities. In these volatile times, a focused approach that aligns with core values can help businesses maintain their footing and make effective decisions. This might involve refining existing services and eliminating elements that no longer serve the business. Taking time to pause and reassess can be a valuable strategy in the ever-changing physical activity economy.
During the lockdown, the popularity of chess surged, drawing parallels with the world of business. In both domains, there are excellent moves, inconsistent moves, and blunders. Even grandmasters can make mistakes under pressure, highlighting the importance of balance in decision-making. To navigate complex situations, grandmasters identify candidate moves, simplifying their options and choosing the best course of action.
Businesses can adopt a similar approach, identifying candidate strategies and refining their choices through reflection and consultation. In a post-COVID world, strategic clarity becomes even more crucial. This is evident in the success of boutique studios, which have thrived due to their focused missions and commitment to delivering a valuable, purposeful experience for their clients. Moving forward, the industry must focus on measuring outcomes and creating meaningful social impact, aligning with customer needs and expectations, and demonstrating the efficacy of their services to stakeholders.
The conversation highlights the importance of looking at health outcomes, particularly in terms of mental health and the value of time, when considering the fitness industry. Projects like ‘Mappiness’, a UK academic project help to monitor mental health on a larger scale, presenting opportunities for businesses to incorporate similar measures for their members and staff. The discussion also emphasises the idea of trading time; when people go to a fitness club, they are exchanging their time for an experience that should be effective and purposeful.
The conversation delves into the idea of fitness substitutes, such as Netflix, restaurants, cinemas or even cocktail bars that are vying for consumers’ time, attention, and discretionary spending. It is critical to think beyond the fitness industry to understand what people truly value and all the things that now compete for consumers time. The pandemic has led to new trends, including connected fitness experiences at home and innovative partnerships like Peloton and Precor. Furthermore, the pandemic has accelerated the shift towards appreciating the outdoors and incorporating outdoor activities into our lives. Overall, the discussion encourages broadening our perspectives and learning from various industries to better serve consumers and improve health outcomes.
The COVID-19 pandemic highlighted the importance of nature to human well-being and accelerated the need for incorporating biophilia into our lives. Biophilia refers to the innate connection humans have with nature. With most of our time spent indoors, there is a tremendous opportunity to reinvent outdoor exercise and create a more extensive, adaptable approach to fitness by integrating biophilic concepts into exercise programs. This shift in mindset could lead to the redesign of towns and cities to become more movement enabled, with an emphasis on human-powered mobility. Additionally, the fitness industry needs to focus on motivation and prompting people to engage in physical activity, rather than simply providing opportunities and venues.
The interview with Ray Algar offers several key insights and reflections for business leaders in the global health and fitness industry: