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“Boutique fitness” – is the US concept a model for the future of fitness industries worldwide?

With a turnover of 27.6 billion dollars in 2016, the US fitness industry is clearly the largest market globally, earning as much as the UK (6.1 billion), Germany (5.5 billion), Japan (5.1 billion), France (2.7 billion), Canada (2.5 billion), Australia (2.5 billion) and Italy (2.45 billion) combined. So clearly, there is much to be learned from the fitness entrepreneurs of the land of the free. Especially when it comes to new business models and new concepts.

In the last five years there was much buzz about “boutique fitness”, an up-and-coming business concept – and rumor has it that it will turn working out into the new going out.  But what exactly is boutique fitness and what can we learn from this trend?

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What is boutique fitness?

Boutique fitness studios are small gyms of usually between 100-300m², which specialize in certain fitness areas. For instance, they offer boxing classes, cycling, functional training or ballet. This specialization allows them to design their studios in minimalist ways and to invest only in the equipment their customers truly need. At first glance they often resemble exclusive clubs, lofts and even art galleries more than actual fitness studios. As they focus on customer experience, they differ from older fitness models. They emphasize the social aspects of exercising, while also offering high quality workouts.

Sounds expensive? It is. Skirting traditional contracts, boutique fitness clubs are usually pay-per-hour. But this comes with a premium price tag. For one group session they generally charge between $20-35 per person. Yet, people are more than willing to pay for an hour of training, accompanied by hip hop or electro beats, especially if they are led by top-notch coaches.

According to Forbes, some of the customers of the exclusive fitness studios work out up to 15 times a month, spending around $142 in total – way more than the $70 they would pay in an average gym. Boutique fitness therefore has evolved into a lucrative business model that promises high revenues to entrepreneurs. SoulCycle, one of the most striking boutique fitness chains, generated a profit of over $25 million before their initial public offering in 2015. And they are not the only ones turning a profit. Others have long caught on to the idea and companies like The Bar Method or CrossFit rank among the most prominent competitors in the boutique fitness business, with some of them generating $4 billion in annual revenue.

Boutique Fitness blog

Data-driven workouts are the future

But boutique fitness is growing increasingly competitive with more and more players entering the market. This also puts pressure on businesses to stay innovative. Alex Fell, the cofounder of Warrior Fitness Boot Camp, a successful boutique fitness studio that focuses on functional training, sees the future in going digital.

Tech is key, according to him, and not only when it comes to booking classes, community building and advertising. The industry is headed towards data-driven workouts that make progress quantifiable. Therefore it’s not only about creating “lifestyle companies”. It’s also about enabling clients to track their own progress and achievements through personalized feedback.

Boutique Fitness blog

So what can we learn from boutique fitness?

Fitness in the digital age is not merely about getting people to sign a contract to a fitness club. It’s mostly about fostering long-term engagement. That way, business concepts that rely on pay-per-hour models can be more lucrative than traditional gyms.

Most of all, customer experience is essential. Creating spaces that facilitate community building and accommodate the lifestyles of clients, while also offering high quality workouts, is crucial to retaining them. Therefore new technologies and data-driven workouts are increasingly gaining importance and are now key competitive advantages.

 

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