Boutique fitness studios fire warning shots at big brand fitness chains

Ray Algar speaking at the IHRSA European Congress in Amsterdam
  • New industry report charts rise of boutique fitness studios
  • In a mature, inert fitness industry, boutiques are driving growth
  • Big industry players need to sit up and take notice

Small, specialised, independent fitness studios – classed collectively as boutique studios – have the potential to take significant market share from the large, big-brand, ‘big box’ fitness centres and DIY gyms, as well as becoming the drivers of overall market growth, reveals a new industry report published today. The boutiques can command hourly fees the others only dream of, they build loyal communities, they are attractive to investors, they have proven business models and they cannot simply be replicated, absorbed or priced out by big brand muscle.

They are a key growth sub-sector in an otherwise sluggishly mature industry and established brands such as Fitness First, Sports Direct and Virgin Active should be taking note. David Lloyd already seems to be responding with the growth of David Lloyd Studio.

The ‘UK boutique fitness studio report’ (subtitled ‘A strategic investigation into an exciting growth segment’) is the latest report researched and written by respected industry analyst Ray Algar and released by Oxygen Consulting, the Brighton-based global fitness industry consultancy. Produced in collaboration with equipment specialist Matrix Fitness UK, it follows a series of reports on the fitness industry and is the first to focus on a specific sub-sector.

The report provides a close analysis of boutique studios – their characteristics, what drives them, how they are set apart from their larger counterparts and how they compete. It offers a compelling vision for their success through objective scrutiny, as well as case studies and interviews with some highly entrepreneurial and visionary studio founders. Featured brands include Boom Cycle, Heartcore Fitness and 1Rebel.

The report’s keynote case study is of US boutique SoulCycle, founded by Julie Rice and Elizabeth Cutler on the Upper West Side of Manhattan less than ten years ago and now, despite having a single class fee of a whopping $34 (and a premium single class fee of $70) in New York, boasts 40 studios in the US, roughly 50,000 users per week and plans to open in London next year.

Report author Ray Algar says: “The rise of the boutique fitness studio is set to transform an otherwise mature and sluggish industry that is inward-looking, over-absorbed with mergers, acquisitions and defensive strategies and not paying enough attention to what today’s customers, especially those with slightly deeper wallets, are willing to pay for.”

Boutique studios generally specialise in just one activity, with indoor cycling and spinning common specialisms. Others include machine-based circuits, high intensity workouts and quality dance, pilates and yoga. Such activities are often to be found in ‘big box’ centres but the difference is that boutique studios stick just to their core offer and provide high quality, expert-led sessions that stretch their customers far more than self-led, DIY training but at a much lower price than one-to-one coaching.

They also seek to provide a holistic quality experience, from meet and greet to deluxe changing rooms, coupled with technological convenience (eg apps to book sessions and monitor progress). And each boutique brand adopts an attitude throughout its marketing and service provision that reflects the mores and aspirations of its ‘tribe’, engendering identification and community loyalty. Boutiques charge much more than their larger counterparts per visit but do not have lock-in memberships: instead they live and die on a sustained quality of service that has people coming back for more.

Ray Algar continues: “Today’s highly mobile and self-managing population will pay much more, pro rata, for a specialised experience, led by experts and available at a time and place to suit them, than they will for a monthly membership to a single brand that may have the kit but doesn’t stretch either the muscles or the imagination. One-off fees and quick, easy bookings through phone and tablet apps enable consumers to cherry-pick from the best of the market wherever they happen to be and whenever they happen to be free. They will also often choose a brand that seems to identify with their own tribe.

“Just as stack-em-high giant supermarkets are struggling against smaller, localised competitors, so the big brand chain fitness centres could soon find significant market share slipping away to the insurgent, upstart boutiques that understand their customers’ needs so well.”

He concludes: “This report is essential to an understanding of where the fitness industry is going, and is equally useful to those who want to understand what makes a boutique studio work as it is to those who need to know how it is potentially affecting the market.”

‘2015 UK boutique fitness studio report’ is published Friday 22nd May 2015 by Oxygen Consulting.

Purchase the report

The report can be purchased for £175, plus VAT at the following link

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Notes for editors
The report writer, Ray Algar, is managing director of Oxygen Consulting, a Brighton, UK, based company that provides compelling strategic business insight for organisations connected to the global health and fitness industry.

Ray is also a past chairman of Wave Leisure Trust, a social enterprise operating seven leisure centres in the South East of England. He was involved for more than six years and experienced its transition from a start-up to a highly influential leisure organisation making a significant social impact on the communities it serves.

In July 2013, Ray launched Gymtopia, an award-winning digital platform that shares stories and insights about how the global health and fitness industry is creating positive social impact.

Ray’s previous industry reports include:

• 2015 review of the UK Health and Fitness Industry and outlook for 2015
• 2014 Fitness Sector Social Good Report
• 2013 review of the UK Health and Fitness Industry and an outlook for 2014
• 2012 UK Low-cost Gym Sector Report
• 2011 Global Low-cost Gym Sector Report
• 2011 European Health Club Industry Web and Social Media Report
• 2010 UK Low-cost Gym Sector Report