TALKBACK everyone’s talking about . . .
segmentation H
igh-end US operator Equinox has launched a new budget brand, Blink Fitness. Meanwhile Netherlands-
based operator HealthCity International last year acquired the BasicFit budget chain, which it has continued to operate under the BasicFit name. Could this be the start of a trend,
with operators creating new brands to go after different markets, all under the same umbrella company? Budget is the most obvious option, but might we see other concepts targeting women, children, the grey market? Or even some lateral thinking which throws up some undiscovered concepts?
Blink Fitness is described as a “lite”
version of the luxurious Equinox, which also owns the PURE Yoga brand. The concept offers a well-designed, well-equipped gym – but nothing more – for US$20 (£12.36) a month. Vice president Dos Condon has been quoted as saying: “We want to bring fi tness to millions of people in need.” Meanwhile, in the UK, the boom
in low-cost gyms has led a number of operators to reassess or add to their existing offering. GLL launched a value brand, Gym London, in March 2009. This offers memberships from £19.95 a month by allowing people to choose a ‘gym only’ option rather than the previous,
david giampaolo pi capital • chief executive
“I
think segmenting the market works for some, but not for
others – there’s not a right or a wrong answer. There’s a great argument for taking that approach and an equally compelling argument to stay true and focused on what you do. Most vegetarian chains don’t start a meat restaurant, but plenty of people like to
eat meat and plenty of people don’t. Launching a new brand requires a different approach and
mindset. You have to be careful not to mix and match two concepts. Many people have proved you can make money in both high-end and low-end markets, but that’s not to say that moving into another market will guarantee success. The advantages of launching another brand is that you have
a different offering, which appeals to a different audience. The negative is that it takes capital, people and time. Many organisations would be better to stay ruthlessly focused on their core business and make that successful, rather than trying to get every crumb on the plate. In my opinion, what Equinox has done is a long way off becoming a trend, and speaking to other operators at IHRSA compounds this.
”
kath hudson • journalist • health club management
Is now the time to further segment the health and fitness market, aiming to reach new audiences through the launch of different sub-brands? We ask the experts
all-inclusive membership package. GLL director Mark Sesnan says this has greatly increased the membership base, but with less than 5 per cent of existing members downgrading. But is launching a low-cost brand the
best way to improve market penetration, or does the industry need to get more creative? The H2 Bike Run clubs (see p39) are an example of a fresh approach, offering a groundbreaking concept for a very specifi c target audience. Might operators be able to identify other such opportunities to extend their reach? Many operators have told HCM they
won’t follow the lead of Equinox, but is it time to be bold? We ask the experts.
SHOULD COMPANIES CONSIDER SEGMENTING THEIR OFFERING? EMAIL US:
HEALTHCLUB@LEISUREMEDIA.COM
ray algar oxygen consulting • managing director
“T
he story of the emergence of low-cost gyms can sound
so compelling that people jump to the conclusion their future is in this segment. But the competition is intensifying and retention will soon become an issue as the brands proliferate, requiring clubs to focus on member engagement.
We already have several cities in England where low-cost
brands are competing in the same catchment area, with a near- identical product and pricing proposition. I am looking forward to the impending launch of easyGym to see how consumers react to the first household brand entering the market. Successfully operating a low-cost business requires
organisational competencies to be zealously focused on operational efficiency. This is a radically different approach from operating a premium club proposition. Can Equinox, through Blink Fitness, be successful in both the self-service and full-service end of the market? Unlikely, I would say. Delivering a low-cost proposition requires a new organisational mindset. Personally, I think it’s better to relentlessly pursue a narrower strategy, with the sole ambition of creating a brand which members love.
” 26 Read Health Club Management online
healthclubmanagement.co.uk/digital may 2011 © cybertrek 2011
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