Recently, I flew to Cologne, Germany, with my friend and partner Robert Dyer to speak at EuropeActive's Health And Fitness Forum (EHFF). EHFF is the precursor to FIBO—the physical activity sector’s largest trade show that brings in about 130,000 visitors. Led by EuropeActive, EHFF gathers approximately 300 industry thought leaders to explore the future of the fitness sector through a variety of presentations, keynotes and panel discussions. The forum and the FIBO trade show were great successes.
A few points really stood out among the wonderful speakers and insights shared at EHFF 2015. During a discussion on technology and its impact on the fitness space, Pure Gym's CEO Humphrey Cobbold made some interesting and accurate observations about the impact of technology as it pertains to health clubs.
"Technology is empowering consumers, providing choices where decisions were previously made for them, and it's a struggle to adapt," Cobbold said.
Referencing air travel, Cobbold went on to explain that passengers are now able to choose their airline, flight, class, boarding options and seat at the touch of a button. He noted the same technological advances are “democratizing fitness” and said that gym operators—many of whom "have a fixed cost and asset base from which they have to generate a material profit," face painful changes as they adapt their business models to embrace new developments. Cobbold forecasted that we're only just reaching the "end of the beginning" in terms of changes brought about by technology, and he said focusing on what young gym users want will be key to long-term success.
This was the first time I recall hearing a leader of a major health club chain speak publicly about the threat that exists to the traditional health club industry today, and Cobbold's comments weren’t the only ones that grabbed my attention. Others, including Stefan Tilk, the head of Fitness First Germany, openly shared their views that consumers have radically changed in just the past year as the result of technology. The general consensus was that organizations were having to scramble to figure out what to do about it.
As I've expressed before, the fitness industry overall, with health clubs serving about 150 million global users, is in the midst of a sea change, reflecting classic S-Curve innovation that is reinventing large portions of the industry space. The classic IHRSA health club business models, like malls, are just not being built anymore because the economics do not make sense. As digital alternatives become more available and as consumers' expectations grow as a result of their experiences around technologies that create better services in other industries, operators will need to retool and closely evaluate how they are going to compete. This makes for exciting and scary times.
So what do you think? Do you agree with Cobbold that we are at the end of the beginning? Is fitness being democratized? What does it mean to you? Please leave your thoughts in the comments section below.