B usinesses don’t get to tell consumers what to buy any more. This was the stark warning from Humphrey Cobbold, CEO of Pure Gym, during the Millennial-focused panel session I moderated at Bloomberg’s e-wellness and technology conference recently.
He continued: “We have to maximise the number of options we’re offering, and then give people the flexibility to buy exactly the product they want – and none of the things they don’t. Mobile devices have put the power into the hands of the consumer.”
All around the room were nods of agreement: flexibility is one of the main boxes that businesses must tick if they want to appeal to Millennials. Indeed, new Danish health club brand Repeat (page 38), designed specifically for Millennials, has built its entire pricing model around this insight. Memberships are sold on a weekly basis – pay per visit is also available – and can be cancelled through the app with just that week plus one more week’s notice.
But this sort of flexibility doesn’t only appeal to Millennials – most customers would love to create their perfect package and then pay only for that. What better way to feel you’re getting good value?
Pure Gym has recognised this and is now investing heavily in technology to better cater for all its members, earmarking a significant proportion of the £190m it plans to generate from this month’s stock market flotation for precisely this purpose. Specifically, Cobbold says his in-house tech team will be developing systems to deliver new and distinct membership packages, “in much the same way an airline creates different price points for different seats on the same flight”.
Offering different levels of membership in itself isn’t new, but the sheer level of personalisation now possible thanks to technology means consumers expect to have a dynamic relationship with the businesses they use. They want to be in charge on a day-to-day basis, controlling things from the palm of their hand. And as Cobbold says, technology delivers this, allowing people to “make choices about how they want to use the gym – what sort of membership they want and how they want to pay for it”.
Using technology to personalise the experience allows operators to very cost-effectively experiment with marketing to the various shared-interest ‘tribes’ that exist among fitness users. As Pure Gym has already shown with its trial of premium memberships, it’s comparatively risk-free to test new ideas in a handful of locations before rolling out across the estate at the touch of a button.
This in contrast to the bricks and mortar approach we’ve seen so far; although the tribalisation of fitness has accelerated recently, it’s primarily been through the launch of Millennial-focused facilities such as CrossFit and the boutiques, all building strong tribes around their niche offerings. This approach requires significant investment, not to mention creating a long-term property liability with less flexibility to adapt to new trends.
No doubt these specialist clubs will continue to thrive, but we’re seeing the emergence of a digital alternative – a way to use technology to unbundle a full-service offering and deliver curated, personalised experiences for each and every member within one facility.
Creating points of difference won’t be as straightforward as when building a dedicated facility, because members will still be choosing from the same menu of services and facilities. But if marketed well, tribes will naturally form; additional income from new (and more satisfied) users can be invested in improvements and new services; and the flexibility offered by this tech-based approach could serve to future-proof the business.
Kate Cracknell
[email protected]
@healthclubkate
