First we shape our industry and afterwards our industry shapes us.
This aphorism is perhaps the least quoted exposition of the relationship between people and their fitness (and health). In a year when we should be celebrating our successes, I want to question, as a critical friend, why we’re not achieving more.
Size matters
First the good news. The industry has shown itself to be recession-proof and is back in positive headline growth year-on-year. This year’s State of the Fitness Industry Report (SoFI) infographics are excellent at showing trends over longer periods, something industry veterans and financiers are finding reassuring. The penetration rate across the total population has grown to 13.7 per cent as monthly direct debits hit 8.8 million, up from 13.2 per cent and 8.3 million.
I put this upfront because it recently came to my notice via social media that too many people working in the industry don’t know the size of the industry they work in. The day-to-day isolation that many people suffer while working in what should be a very social environment needs to be addressed and we’re looking to present more real-time data on our website in 2016.
Budget becomes mid-market
So back to the good news. The total number of fitness sites stands at 6,312, up from 6,112 in the previous year, and the market value has grown to £4.3bn – representing almost £1bn growth since 2007.
Across the private sector, low-cost sites have continued to drive growth: there are now 319 low-cost clubs, up from 257. Membership of these clubs has jumped to 1.3 million, with a market value of £290m. Last year, members paid on average £17.99; this year it has increased to £18.23, an indication that more low-cost operators are bordering on the £20 a month definition.
If we keep this definition, then some low-cost brands are either finding the model isn’t working on all sites, or else they’re finding the strength of the market means they no longer need to be constrained by price. Because some brands are moving not only into the £20-plus but £30-plus brackets, particularly in London. So low-cost brands are moving into the very mid-market they were once attacking.
Public show of strength
The public sector, meanwhile, is playing a far more long-term game, gaining strength and embedding itself into the local community. Public sites have a wider range of facilities and maintain over 3.3 million members paying an average fee of £30, unchanged since last year.
Back in 2011, the public sector opened 81 all-new gyms, but although refurbs have grown, new openings have dropped year-on-year with 2015 bringing just 46. However, these new sites have 58 stations on average and are charging £31.25 – both figures higher than the all-public site average.
This average is being pushed up by the work of the larger public site operators. At the time our latest report was published, GLL and its Better brand was the largest fitness brand in the country with 126 sites, SLM’s Everyone Active had 79, and Places for People Leisure had 78 sites. GLL managed 38 more gyms than it did 12 months previously and was also the largest swim and diving school operator.
Instagram what?
Our personal preferences can become personal insight based on information in the public domain – yet few public or private brands are taking advantage to engage in meaningful conversations, present real-time information and convert interest into commerce or visits.
For the first time in our SoFI report, we’ve included a Fitness Social Media Index looking at brands on Facebook, Twitter, Instagram and YouTube. The results don’t make for good reading: four of the top 10 private brands and nine of the top 10 public brands don’t use Instagram. Compare this to the active wear brands that have taken fitness beyond the gym to become a lifestyle.
Nike, Adidas, Vans, Converse, Puma, Under Armour and New Balance have all seen 144–252 per cent growth in Instagram followers, unprecedented in other social media forms. Are fitness brands neglecting a superior indexing platform?
Could the lack of social media strategies, along with a lack of innovation and differentiation, be the downfall of the industry in 2016? Weight Watchers is a good example of how quickly new technology can destroy the value of a business. In 2015, its stock dropped 92 per cent from its all-time high, membership is down 38 per cent, and the number of meetings has fallen by 20 per cent. Dieting tools have gone hi-tech and the Weight Watchers weekly meetings and weigh-ins have been replaced by on-demand conversation and support.
Husband and wife bloggers Daniel and Kelli on Fitness Blender have over 18 million followers, and like Wikipedia rely on donations. In the UK, Body.Network – promoted by The Times and fronted by PT Matt Roberts – provides an on-demand library of videos with your favourite trainer for £15 a month. Around 20 new aggregators – hi-tech start-ups from UK, India, Israel and the US – are working around the lack of APIs to go direct to the consumer. These aggregators will have a conversation with the consumer, will provide a personal service and will create an experience for them. Does the fitness industry do all three and do it well?
Some new technology attracts criticism for undercutting the industry, but like Uber and Airbnb, the power and choice lies with the consumer. Will aggregators, bloggers, unboxing celebrities, on-demand channels, trackers, wearables and an app for everything win over the consumer and impact traditional platforms and websites? It’s only a matter of time, so embrace new technology and help shape our industry in 2016.
