What is driving the global low-cost gym sector?

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Presentation by Ray Algar to attendees of the IHRSA 2012 Convention held in Los Angeles, March 2012.

Discussion at: www.oxygen-consulting.co.uk

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What is driving the global low-cost gym sector?

  1. 1. What is driving the low-cost gym sector? Ray Algar, Oxygen ConsultingTuesday, 20 March 12
  2. 2. Ray’s great Ray sucks! ihrsa.org/evalutationTuesday, 20 March 12
  3. 3. www.oxygen-consulting.co.ukTuesday, 20 March 12
  4. 4. -COST GYM SECT OW OR L AL RE OB PO 2011 GL RT A STRATEGIC INVESTIGATION INTO A DISRUPTIVE NEW SEGMENT Researched and written by Ray Algar, Oxygen Consulting UK in association with Precor www.oxygen-consulting.co.ukTuesday, 20 March 12
  5. 5. Neutral perspectiveTuesday, 20 March 12
  6. 6. Part 1 Part 2 Why is the How do low-cost low-cost gym gyms compete? sector emerging Part 3 Part 4 How is the low-cost What is your gym sector strategic response? developingTuesday, 20 March 12
  7. 7. Part 1 Part 2 Why is the How do low-cost low-cost gym gyms compete? sector emerging Part 3 Part 4 How is the low-cost What is your gym sector strategic response? developingTuesday, 20 March 12
  8. 8. LOW ATTENDANCE TO LEGACY CLUBS CONSUMER DIGITAL SENTIMENT TO INFRA- MARKET LEGACY CLUBS STRUCTURE DRIVERS FOR LOW-COST GYM CHANGING SIMPLICITY CONSUMERTuesday, 20 March 12
  9. 9. LOW ATTENDANCE TO LEGACY CLUBS CONSUMER DIGITAL SENTIMENT TO INFRA- MARKET LEGACY CLUBS STRUCTURE DRIVERS FOR LOW-COST GYM CHANGING SIMPLICITY CONSUMERTuesday, 20 March 12
  10. 10. Tuesday, 20 March 12
  11. 11. Tuesday, 20 March 12
  12. 12. Tuesday, 20 March 12
  13. 13. Geiz ist geil!Tuesday, 20 March 12
  14. 14. Tuesday, 20 March 12
  15. 15. Tuesday, 20 March 12
  16. 16. Tuesday, 20 March 12
  17. 17. “Clever me!”Tuesday, 20 March 12
  18. 18. Tuesday, 20 March 12
  19. 19. Part 1 Part 2 Why is the How do low- low-cost gym cost gyms sector emerging compete? Part 3 Part 4 How is the low-cost What is your gym sector strategic response? developingTuesday, 20 March 12
  20. 20. How a low-cost gym competes Low-cost gym Mid-market gym100 7550 25 0 Price Join online Opening hours Club design Range of facilities Core FactorsTuesday, 20 March 12
  21. 21. How a low-cost gym competes Low-cost gym Mid-market gym100 7550 25 0 Technology Hospitaility Salaried staff Core FactorsTuesday, 20 March 12
  22. 22. Tuesday, 20 March 12
  23. 23. Charge it!Tuesday, 20 March 12
  24. 24. Tuesday, 20 March 12
  25. 25. @ = 100%Tuesday, 20 March 12
  26. 26. Tuesday, 20 March 12
  27. 27. M.e.e. Meeting Expected ExperienceTuesday, 20 March 12
  28. 28. Tuesday, 20 March 12
  29. 29. How much do you agree with the following statements? 0 = Strongly 5 = Strongly disagree agreeTuesday, 20 March 12
  30. 30. How much do you agree with the following statements? 3.5 Average Response 3.9 3.9 Has all facilities I need 4.1 Receive emails Staff available to provide free advice Staff approachableTuesday, 20 March 12
  31. 31. How much do you agree with the following statements? 3.9 4.1 4.3 4.5 4 4.2 Average Response 4.2 Friendly atmosphere 4.5 Always feel safe Helping me to become healthier Excellent value for moneyTuesday, 20 March 12
  32. 32. Still a member in six months time? 7.6 7.9 8.1 7.7 Average Response 7.9 8.1 Males 8.1 All members FitSpace is first gym FemalesTuesday, 20 March 12
  33. 33. How likely are you to recommend this gym? 0 = Not all all likely 10 = Definitely recommendTuesday, 20 March 12
  34. 34. How likely to recommend FitSpace? 7.60 7.80 8.00 8.20 7.7 7.8 Average Response 7.9 8.1 Males Members with experience of other gyms 8.2 All members Members for whom FitSpace is first gym FemalesTuesday, 20 March 12
  35. 35. Net promoter score 0-6 Detractor 7-8 Passive 9-10 PromoterTuesday, 20 March 12
  36. 36. Example 1,000 member club 200 400 400 Detractor Passive Promoter 40%-20% = NPS 20%Tuesday, 20 March 12
  37. 37. Net Promoter Score 0 10 20 30 40 19 22 NPS SCORE 28 37 Age group - 25-34 37 Males All members Females Age segment - 16-24Tuesday, 20 March 12
  38. 38. UK Net Promoter Score Survey 21% 27% Public and Private clubs Public sector -16% Private clubs Source: Leisure Net/The Retention People 2010Tuesday, 20 March 12
  39. 39. Raise Reduce Web Staffing levels Create Eliminate Simple Non-core proposition facilitiesTuesday, 20 March 12
  40. 40. Low-cost airline videoTuesday, 20 March 12
  41. 41. Part 1 Part 2 Why is the How do low-cost low-cost gym gyms compete? sector emerging Part 3 Part 4 How is the low- What is your cost gym sector strategic response? developing?Tuesday, 20 March 12
  42. 42. MomentumTuesday, 20 March 12
  43. 43. Low-cost Mid-market Premium 48 45 10 UK Club Openings - January - December 2011 Source: The Leisure Database Company 2012Tuesday, 20 March 12
  44. 44. Summary of Leading InternationalLow-Cost Gym Brands 52 38 CLUBS 54 USA 141 GERMANY 17 19 70 NETHERLANDS 447 80 SWEDEN AUSTRIA BRAZIL 23 RANKING 1 2 3 4 5 6 7 8 9 10 COUNTRY ORD M E E PO R GE RS SO BRAND Planet McFit Clever Fit Easy Basic Fit Fitness24 Fit for Smart Fitinn Kingdom Fitness Fitness Seven Free Fit of SportsTuesday, 20 March 12
  45. 45. Tuesday, 20 March 12
  46. 46. Broad facility focus Well-equipped gym Showers Tanning Locker Room Vending Juice bar Group Exercise Narrow facility focusTuesday, 20 March 12
  47. 47. Tuesday, 20 March 12
  48. 48. Hut - Portugal FitnessTuesday, 20 March 12
  49. 49. Tuesday, 20 March 12
  50. 50. Low-cost does not mea n an inferior consumer experienceTuesday, 20 March 12
  51. 51. - Denmark Fresh FitnessTuesday, 20 March 12
  52. 52. Tuesday, 20 March 12
  53. 53. roup - UK The Gym GTuesday, 20 March 12
  54. 54. Tuesday, 20 March 12
  55. 55. The Gym Group videoTuesday, 20 March 12
  56. 56. - Germany McFitTuesday, 20 March 12
  57. 57. Tuesday, 20 March 12
  58. 58. Rainer Schaller, McFit CEO videoTuesday, 20 March 12
  59. 59. Fitn ess - USA P lanetTuesday, 20 March 12
  60. 60. Planet Fitness VideoTuesday, 20 March 12
  61. 61. Bonga- M exicoTuesday, 20 March 12
  62. 62. Tuesday, 20 March 12
  63. 63. Fast - Australia Fit nTuesday, 20 March 12
  64. 64. itness - USA B l in k FTuesday, 20 March 12
  65. 65. Tuesday, 20 March 12
  66. 66. Part 1 Part 2 Why is the How do low-cost low-cost gym gyms compete? sector emerging Part 3 Part 4 How is the low-cost What is your gym sector strategic developing response?Tuesday, 20 March 12
  67. 67. “I’ll just say here until they go away!”Tuesday, 20 March 12
  68. 68. Tuesday, 20 March 12
  69. 69. Many clubs developed on 20th century thinkingTuesday, 20 March 12
  70. 70. Your club is threatened by substitutes Quit JoinUse Join specialist Buy low-cost online The “club” anmachine App’ homegym community studioTuesday, 20 March 12
  71. 71. What is your club’s compelling purpose?Tuesday, 20 March 12
  72. 72. Make 40% EBITDATuesday, 20 March 12
  73. 73. “To improve lives through fitness”Tuesday, 20 March 12
  74. 74. Commit to raising your club’s bar because ‘average’ now means...Tuesday, 20 March 12
  75. 75. IrrelevantTuesday, 20 March 12
  76. 76. -COST GYM SECT OW OR L AL RE OB PO 2011 GL RT A STRATEGIC INVESTIGATION INTO A DISRUPTIVE NEW SEGMENT Researched and written by Ray Algar, Oxygen Consulting UK in association with Precor www.oxygen-consulting.co.ukTuesday, 20 March 12

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