Digital developments within the fitness industry is not a new phenomenon, they actually have been there for years. However, the whole COVID-19 situation including the lockdown definitely accelerated the implementation of live streaming and on-demand content. Many fitness facilities were forced to replace their usual offering with digital classes which unleashed a quick change. It’s time to embrace the digital change.
Be cautious of “Digital Distraction”
Digital has been a great channel through which you are able to connect with members during the COVID-19 pandemic. However, as a gym owner, you shouldn’t get too distracted by digital if it’s not a strategic intention and, if it’s not, it might be time to make it one. Unprecedented times call for brutal reality and transparency to ensure that the correct strategic decisions can be made. As market leaders we believe it is our role and the role of our digital specialists to help companies solve problems using digital technology and not to just shift licenses. Therefore, we have lined out some strategic opportunities for you as a gym owner.
Having a digital strategy is entirely different from just a crisis response and there is induced confusion of the fact that COVID-19 has caused digital transformation.
Digital transformation isn’t a phenomenon that just happens accidently; it’s a strategic intention and involves more than just an unplanned software implementation. Gym members are looking forward to returning to the gym, either exclusively or combined with home workouts. The majority also wants to improve their fitness and plans to exercise more after the lockdown. It is true that more people want to work out online. However digital isn’t accelerating; digital accelerated years ago and the current numbers suggest people are looking for online workouts because they are at home. It shouldn’t form the basis of a strategic decision. The reality is people have been quarantined.
COVID-19 hasn’t necessarily created a new market. As a gym owner, you should be careful when making commercial decisions. In this particular situation, the transformation towards a digital approach is just a temporary crisis response. This required the entire fitness industry to explore and look out for alternative (not new) channels to reach customers. Of course, COVID-19 has had and will have a positive impact on the digital space, but you shouldn’t get too distracted by the quick and scrappy fixes of crisis response and set your stall out on creating a transformative digital strategy. Nonetheless COVID-19 forces traditional businesses to find new and different ways of competing. Here are five ways that companies can respond to disruptive forces. Get inspired and decide your strategic direction!
1. Invest in your traditional business
Companies could decide they don’t want to embrace anything new and continue to focus on traditional business. This can indeed be a successful strategy in times of rapid change. There is a huge misconception that if you don’t embrace a new way, your business will be wiped out, but this isn’t necessarily true. It’s not a disaster to double down and continue to invest in traditional business.
You can just choose to simply add on-demand and at-home services as an addition to your current membership. It’s investing in the current business and making it more attractive and competitive. Just remember that you should not use this option as the default for “it’s too much work” or the phrase “my members don’t want that” - AKA your unvalidated opinion of what you think your members want. Don’t be led by your own opinion. Secondly, if you choose this direction, try to avoid just reinventing the traditional business. The key is to make the business more attractive and competitive.
2. Ignore Digital innovation, consider it as a different market
Sometimes something new can look so similar to your traditional business, but instead is actually very different. A different market could have different customers, offers a different value proposition and requires different resources and skills. Embracing something that you assume is a new market and encourages growth could be disastrous if it’s not easy to do. If it isn’t easy to adopt, it may be a good idea to just ignore it. It literally is not your business.
3. Counterattack by disrupting the disruption
There may come a time when something new comes along that is so attractive to your most loyal members that they leave you and choose to join the new. There aren’t great commercial fitness examples in the digital space. We haven’t yet seen members leave a gym because of Strava for example. We do, however, see some physical world examples like the boutique space where gyms replicate the experience to make their traditional business more attractive to keep members from moving to the boutiques. This can also be done with connective fitness solutions such as SE3HD Consoles, Life Fitness On Demand, ICG Connect and HALO Premium.
You could choose not to embrace the innovation and instead disrupt it yourself with a new business model that demonstrates an even better experience than that of the new innovation.
4. Adopt Digital and play both games simultaneously
It could be that an innovation is here to stay, which makes it a long-term trend instead of just another temporary hype. A disruptive innovation that members and non-members love and want, and its presence is having a commercial impact on your traditional business. If that’s the case, then it’s probably time to adopt and embrace. This will require you to play in the physical space, the digital space and possibly even in both.
In order to play both games you will need to figure out the big “how” question. How do you play both games, how do you adopt an innovation or new market, do you have to build it, buy it, establish a partnership? How does it fit the traditional business, and most importantly can you do it well? If you choose to deliver services to a new at-home member, not an existing member - then this would be playing both games: you will be operating in a different market to a different customer. We’ve seen some great examples of at-home and on-demand workout experiences during the crisis response, but also some really bad examples that reflect on the brand in a negative way. If you are going to play both games, do it well or don’t do it at all as it could be damaging to your business.
5. Embrace Digital and increase the scale
There may come a time when a disruptive innovation arrives that is so attractive to your current members that they all start to leave you. In this event, it might be time to abandon the traditional business, adopt this innovation and scale it. As an industry we probably have other problems to solve right now but we should always know what’s happening outside the industry and its impact on our businesses. As an operator, it is essential to keep track of what the big tech companies are doing. What could be next? Do you have a big tech strategy? Will you be ready?
In summary, don’t get too distracted. Right now, it would be worthwhile operating a two-speed strategy to your crisis response and also developing a longer-term transformative digital strategy. Use your crisis response to test, measure and learn. What worked, what didn’t, what are members and non-members asking for, what are they using and what are they ignoring. Critically, when answering these questions, be honest with yourself.
From here take time to investigate your direction. Make sure you understand if a digital experience is just an extension to your current service or if it is an entirely new business direction. As you know, our team of digital specialists are able to help with your strategic development that won’t lead back to a single solution. Get in touch. We love the fitness industry and we’d love to help!
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