A couple of weeks ago I went to SWEAT, an event organised by UK Active for the boutique fitness market. For the uninitiated, boutique is loosely defined as smaller, independent venues offering a highly engaging and specialised fitness experience, usually based around a single form of activity and with flexible pay-as-you-go options instead of the traditional 12 month gym contract that we all know and love.
This is a huge, billion dollar global business according to UK Active, with the likes of Boom Cycle, Ministry Does Fitness, Kobox, DIGME and lots of others growing rapidly by offering a high-end, immersive experience that clearly resonates with its target audience and creates a sense of almost tribal loyalty amongst those who show up regularly.
These classes aren’t cheap, with an often bewildering array of pricing options but tending to work out at around £20 per visit. Despite that, there is clearly a big market for what they are offering but as this sector looks to grow, however, I think it’ll face a few challenges:
1) Everyone seems to be chasing the same audience. According to research by Zingfit, 83% of the boutique market in London is female and the average age is 31. Even in London there is a limit to the amount of young women with the time, money and inclination to regularly show up. Can boutique brands be created that work for different audiences – older, outside London, less active, more male?
2) Trends come and go. Boxing or Barre might be what everyone’s into right now, but fashions inevitably move on and next year it may well be something else. The boutique brands will have to be alert to that to ensure their product doesn’t become “yesterday’s fitness trend”.
3) Promiscuous consumers. While the boutique brands are all very proud of their core community of loyal advocates, consumers in this space are, by definition, always looking for something new. Zingfit reckons 29% of all bookings are either introductory offers or made through ClassPass, which suggests that a lot of people are constantly trying new things and don’t want to commit to a single offering. This is the premise of boutiques vs the traditional gym membership model, but it’s a challenge when so many of your customers are actively trying out your competitors.
4) Space. Good spaces in the right parts of big cities like London are hard to find and very, very expensive. Granted, the boutique experience can work well in a dingy, underground spot somewhere fairly gritty, but finding the right space at a price that works must be one of the biggest challenges for boutique businesses looking to expand in the capital. Looking to other towns and cities for growth might be the answer, but the pricing will have to change accordingly.
4) Corporate Competition. The boutiques will (and already are) facing competition from bigger rivals with big pockets who fancy a slice of the action and could provide it at a lower cost. It’s relatively easy for a mainstream gym brand to replicate the core product, so boutiques will have to work hard to maintain their brand equity and differentiation, through smart innovation and marketing (or get bought by/partner with one of the big players).
It’s a really interesting, innovative space but I think the boutique brands can’t rest on their laurels and will have to be smart about their product, target audience, pricing, differentiation and marketing strategies if they want to keep growing.