The Great ‘Club Divide’ and Boutique Brand Programming

Jim Worthington.

There is never any way to tell with certainty what the future holds in store for our industry, but after 30-plus years in the business, countless hours of reading industry articles on trends and predictions, and observing what happens in my own club on a daily basis, I have some gut instincts I can throw out there for general consumption. I offer these ideas as food for thought to be pondered and incorporated into your own strategies, if they resonate with you.

One trend I think is already here, and here to stay, is a “club divide” in our industry. The divide consists of clubs that exist at opposite ends of the spectrum — smaller, low-cost, no-frills clubs at one end and larger, high-end, comprehensive clubs at the other. Both of these business models will thrive in 2014. The reasons are simple — there is a distinct market for each of them in the population and they have each clearly defined what they are. I am passing no judgment here. One is not necessarily “better” than the other. They are simply different. What they each do well is sticking to their respective business models and successfully serving the needs of those who prefer what they have to offer.

On the other hand, I believe mid-size clubs that exist between the two ends of the spectrum will struggle. They will have to decide if they want to compete on price or provide quality programming. The irony is that by doing so they will lean closer to one end of the spectrum or the other and no longer reside in the dead center. These clubs will have to lower their fees to effectively compete or raise their fees to provide more quality programming. If they remain squarely in the middle with no commitment in either direction, growth for them will most likely not occur.

On another note, I see an opportunity in 2014 for larger clubs to incorporate boutique programs utilizing well-known brands such as CrossFit or Parisi. These brands are thriving outside the walls of our clubs, while they could be thriving within, bringing additional non-dues revenue to the bottom line in some cases. Some programs, such as CrossFit, could be included in the membership fee, while others, such as Parisi, would incur fees exceeding the basic membership fee. These brands have already established credibility in the marketplace. It makes more sense for us to align with them, rather than work against them.

I envision members being able to enjoy a wide variety of already well-branded program offerings all under one roof, enabling them to choose what they want to do with ease and convenience. When incorporating these programs into a large club environment, I would consider designing the individual spaces or studios using the unique architectural features of the brand, in order to more closely align with the brand imaging. This experience is akin to going to a shopping mall with every major clothing designer offering a separate boutique for its line.

At the end of the day, the most successful clubs in 2014 will do what successful clubs always do — define who they are and then do it to the best of their ability. If you are in the middle ground of the “club divide,” then decide who you are and go for it. Compete the best way you can. If you choose price, know that you enter a volatile territory that can swing in any direction. If you decide to invest in yourself with stronger programming, then start by committing to programs that you think best suit your clientele, and build on them one at a time.

In whatever you do, I wish you the best. If one of us succeeds, it lifts us all.

Jim Worthington is the owner and president of Newtown Athletic Club in Newtown, Pa. He has more than 30 years of experience in the health and fitness industry.