Big Box: Gold’s Gym will always occupy a special place in the history of modern fitness.The original club in Venice Beach was the center of the bodybuilding world in the 1970’s and helped launch Arnold Schwarzenegger to international stardom and a career in politics. Flash forward 40 years and Gold’s Gym has 700 locations and is headquartered in Dallas. The fitness landscape looks completely different than it did when Pumping Iron premiered. From D Magazine:
“One of the first things we set out to do was to figure out who we are, who we serve, and how we serve them,” Bean says. “Part of that was creating a strategy around how we are going to compete.” The goal: A defensible fitness product differentiated by people, processes, and programming.
From those strategy sessions, the team decided it could tap digital transformation to leverage its brand beyond the four gym walls. “Our true core competency is not building and operating gyms,” Bean says. “Our true core competency is fitness. How do we take fitness to everyone who knows this brand around the world?”
They did it with a smartphone app introduced last October called Gold’s AMP—marketed as “Your Digital Personal Trainer.” The app provides Gold’s Gym-certified coaches and a custom music library to offer the Gold’s experience outside the gym’s walls. Alternatively, members, if they wish, can use the app while working out at the gym. It costs $9.99 per month after a seven-day free trial. Three of Gold’s four membership levels include the app in the membership. No Gold’s Gym membership is required to subscribe to the app.
Building a fitness app is not getting ahead of the curve anymore, it’s what you have to do to keep up these days. The market for fitness apps is completely saturated right now. It’s so hard to break out of the pack even for an established brand like Gold’s. And most of those apps are free.
The chain is in the process of retrofitting its company-owned stores to include what it’s named Gold’s Studio. The Gold’s Studios typically offer two or three signature coach-led programs: Gold’s Burn (heart-rate variability training), Gold’s Fit (high-intensity interval training, or HIIT), and Gold’s Cycle (a competitive, music-enhanced cycling experience). It’s one way Gold’s is competing against the onslaught of specialty fitness boutiques. Franchise locations have expressed interest in retrofitting, but, because Gold’s Studio requires committed floor space, it’s unlikely they’ll be as aggressive in the rollout. All corporate locations are scheduled to be retrofitted within two years.
This is an interesting mix of classes. Gold’s Burn sounds like it was designed to take on Orangetheory, Gold’s Fit to take on CrossFit, and Gold’s Cycle to take on SoulCycle. It’s always going to be tough for a big box to be as good at studio fitness as an actual studio but if they can get close then they can really leverage the fact that a big box offers so much more. This is going to be all about execution.
Gold’s also decided to make joining easier. In January, the company did away with its membership contracts and introduced four levels of memberships to entice engagement. The levels start with a basic $40 per month membership, plus three others: $50, $80, and $100 a month levels offering additional services and programming.
What does this mean? They did away with their membership contracts but they still have memberships? That is not clear at all.
Another way Gold’s hopes to leverage its brand is through a new corporate wellness program. The program, called Gold’s Care, was beta-tested in Austin over the past six months and launched in a limited roll-out there in April. It’s expected to move into a portion of San Antonio by summer. By year’s end, all of Austin and San Antonio are expected to be offering Gold’s Care with the expectation of taking it nationwide in 2019.
“We have a lot of exciting things going on, but this is one that is really exciting and aligns with our strategy of differentiating [ourselves] from other companies,” Bean says. Competing fitness clubs don’t have Gold’s combination of existing corporate relationships, footprint, and coaching to compete, he contends.
Under the program, a member or nonmember comes into Gold’s and receives a health assessment, which includes a pin-prick blood draw and a 3D body scan that measures a person’s body mass index and body measurements. From there, the person is put into a green, yellow, or red bucket. Yellows and reds go through a 13-week nutrition and fitness program at Gold’s, paid for by their insurance company after a $99 entry fee paid by the individual.
Having a corporate wellness strategy in 2018 is an absolute must. The challenge is keeping those corporate members coming back so you can keep making money. This article is a good look at the challenges faced by big box gyms right now. They have to adapt to a world that is rapidly changing due to technology, an industry that is mainly growing at the low and high end, a generation that prizes experiences over possessions, and a nation that is struggling with an obesity epidemic and sky-rocketing health care prices. There is a lot of danger and a lot of opportunity there.
Cycling: It’s hard to believe that Peloton is only a few years old but the company has already hit $400 million in sales. They have accomplished something that a lot of companies are striving to do right now: position themselves at the nexus of fitness and technology and make a lot of money. From AdWeek:
“The challenge with fitness classes is they’re inherently inefficient,” says Tim Calkins, author of Defending Your Brand and a marketing professor at Northwestern University’s Kellogg School of Management. “It’s tough to pay an instructor a lot of money if they’re only teaching 30 people at a time.Nor can the instructor commit too much to that class because they have to teach a lot of other classes” to make a living.
By contrast, Peloton has found a way to scale the instructors that “improves the quality of the offerings.” And, Calkins points out, the hefty price tag can be seen as a plus from a bottom-line perspective. “If they can get the treadmill placed at $4,000, then you’ve really locked people in,” he says, adding that though fitness is a saturated market, Peloton “captures both the convenience of at-home exercising and they tap into all the fun and joys of being part of a class and a broader community. That combination is quite unique.”
Personal/Group training is inefficient and labor-intensive. You can only cram so many people into a room. And a trainer/instructor can only teach so many classes in a day. This means that a gym operator can only sell so many spots per class and so many classes per day. Peloton utilizes technology to solve this problem. It solves the instructor and scarcity problem by streaming classes which makes attending a cycling class more convenient.
Another instructor, Matt Wilpers, a former auditor for KPMG who ran track at Georgia State and deferred medical school to teach at Peloton full-time, is in awe of the scope and reach his classes have. He puts in hours determining what music to use as well as answering riders’ comments and posts on various social media platforms. “I teach a class and there’s 500 to 1,000 in every class. That’s a whole different scale, and it’s all about using technology to increase my reach,” he says.
That is incredible scale for a cycling class. I assume that it allows Peloton to pay its instructors more than its competitors, which then turns into a competitive advantage. The only drawback is that it is fairly expensive but they’re working on that too:
To help attract new subscribers, Peloton is offering financing options to entice less affluent riders. The company has also created corporate partnerships, introducing commercial-grade bikes at high-end residential buildings and hotels—making Peloton an “everywhere, whenever” proposition. Earlier this month, it announced a global expansion into Canada and the United Kingdom.
The one thing that I am not bullish on is the treadmill. I don’t like the price point ($4000) because that is double what the bike costs and that is a lot of money for a treadmill. Also, it’s important to note that running classes are not an established thing like cycling classes are. Cycling/Spin classes have been popular for years and have recently gone to the next level with SoulCycle and FlyWheel. Running classes are fairly new, not that widespread, and nowhere near as popular as cycling classes. That means that Peloton will have to educate consumers on what a running class is, why they should be doing it, and then pay $4000 to get started. That is a very big ask and I am not sure how Peloton is going to get there.
Global Domination: If you’re not growing, you’re dying, especially when you need to stay a step ahead of your competitors in a fast-growing field. A great way to keep growing is to expand into international markets and that’s what ClassPass is doing. From TechCrunch:
ClassPass, the studio fitness platform that gives users access to thousands of boutique fitness classes, has said it plans to expand internationally into nine new countries by the end of 2018. The company’s top priorities are consolidating its position in the UK and launching in three countries in Asia, according to chief executive Fritz Lanman. Lanman declined to disclose which countries the fitness subscription service was targeting.
ClassPass’s further international expansion isn’t exactly a surprise. The company already serves parts of Canada, the UK and Australia alongside its 50 cities within the US. ClassPass also raised a whopping $70 million Series C last year which Lanman tells me was purposefully large to fuel this type of expansion without being dependent on another round of financing.
What is ClassPass’ strategy? It’s a company that has pivoted a couple of times already and it is developing a streaming service right now. I’m starting to think that ClassPass management is just throwing stuff against the wall and seeing if anything sticks. Nine new countries by the end of the year is an ambitious expansion. I’m a little concerned that the CEO wouldn’t name the counties because it makes me think that they don’t know which countries they want to target. I kind of think that ClassPass is cursed with too much funding. Less money could be a blessing because it would force ClassPass to focus and really think about what kind of company it wants to be. The curse of too much funding is that you have to put it to use and you don’t have to make hard decisions. A hard decision would be whether to focus on streaming or double down on being a platform for studio classes.
Maybe there is a master plan, maybe I’m wrong. I am extrapolating on what I see from observing the company from afar. But management has had plenty of opportunities to articulate a strategy and I haven’t seen them do it. Maybe they’ll stumble on the right strategy, who knows? Right now I am a little concerned about them.
Meat Market: Have you ever thought that people don’t look at their phones enough at the gym? Well, then I have great news for you. Tinder is launching a location feature called Tinder Places. From Inverse:
Tinder announced on Wednesday that it is currently testing its new location feature Places, which the company said is “designed to help you discover new people who hang where you hang.” In addition to bars and restaurants, Tinder also listed one such example of a potential “hang” as spin class — because the couple that spins together, stays together, right?
So long as you’re cool with yet another app tracking your location and regular haunts, Tinder Places (which uses Foursquare and Mapbox data) doesn’t sound all that terrible in theory. The company noted on its blog that Places can be turned on or off any time a user likes, and the app won’t show you in real time at a given place unless you’ve already added it to your Places queue (it’ll disappear from the app after 28 days. In addition to offering the option to hide or delete certain Places, Tinder also said it “will never show you at the bank, your home, or doctor’s office.” Nice!
But it will show you at the gym, assuming you’re into that kind of thing. This is probably great news for fans of the “social fitness” app Gymder, which is totally and definitely not just an app for people who hope to hookup with fellow gym rats (according to the company. And sure, having similar hobbies as your prospective partners is a serious icebreaker and helps make dating less awful! But I’d venture a guess that as complex organisms with many pastimes and interests, you may just have something else in common other than fitness — maybe. Hopefully.
Ugghhhh…do we really need this? I do believe that a shared passion for fitness can be a crucial component of compatibility but that doesn’t mean that people have to actually meet in the gym. The biggest mistake that I see people make at the gym is a lack of focus. We all have a finite amount of time to spend in the gym so you need to make every second count. Don’t waste time on chit-chat and manage your rest intervals. Turning the gym into a Tinder Place won’t be help anyone’s fitness levels. I include myself in that category because distracted gym-goers will clog up more equipment.
-Mat Fraser is still really good at and he’s getting his own Nikeshoe
-The Panchik brothers both qualified for the CrossFit Games
-Don’t film people at the gym without their consent
-Overweight man who never exercises tells millions of people how to get in shape
-SoulCycle has pulled its IPO
-It’s like a bar crawl but for fitness classes