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In the first of our series of interviews with fitness industry leaders, Nordic Wellness owner Magnus Wilhelmsson discusses the importance of an agile growth mindset, what clubs can learn from other sectors, and why he wants his group fitness managers to act like secret agents.
Well, my name is Magnus Wilhelmsson and I’m the owner of Nordic Wellness – a Swedish health club chain comprising 186 clubs that I started 20 years ago. It was the classic type of traditional growth story. I started out with one club, decided I wanted more, and things gradually snowballed from there. We recently passed 150 and now we've set ourselves the ambitious goal of reaching 250 by December 2022.
Last year we opened 24 clubs – a mixture of acquisitions and new builds – and this is the strategy we’ll continue to pursue. Typically, the strategy for operators of our size is to seek expansion overseas, but there’s still a huge amount of latent potential in Sweden. We’ve regularly looked at Norway and Denmark in the past and I had a really good feeling about Poland six or seven years ago, but ultimately, we’ve decided to pursue growth in the Swedish market which we know best. This is driven by passion as much as commercial factors – when we started 20 years ago, only 7% of people went to a gym. A decade ago it was 12%, and today it’s 20%. We’re committed to supporting a healthier society and if we can keep up this growth then it will be good for everyone.
Again, I’d say we’re very unusual for a chain of our size as there’s huge variance between the clubs in our estate. We’re committed to high-quality service at mid-market prices as our core value proposition (average price of membership is 330 Swedish Krona per month), but beyond that we’re very flexible. It doesn’t matter what the size of the site is, if we think it’s viable we will take it and make our concept fit to that environment – we have clubs ranging from 200sq m, right up to 4,500sq m. This adaptability has been key to our growth, because it opens up a lot more possible locations for us than if we were bound to a particular model. We can be creative when we need to be and this keeps us agile.
Group fitness is massive for us – I’d say 80-85% of our clubs have group training in some way. We have a broad membership base so the benefit of this is that we can deliver fun workouts that service large numbers of different member types, whether it’s beginners, advanced exercisers, youngsters, whatever. It's a big part of the business and I think a studio today needs to have everything. It also means we attract a fairly young audience – the average age of our members is 29. A lot of small chains have only gym and cardiovascular training, no group training, which can work for them, but for us we want to create that sense of community among our members and group training is such an important part of that, as well as a powerful retention tool.
We strike a good balance that gives us both broad appeal and necessary variety. We have our own programs, we have some third-party options and we have Les Mills programs. The fact that we have an average of nine Les Mills programs in our group fitness clubs shows how much we value the product and it’s played an important part in our growth journey. It’s a world-class concept and a very well-recognised brand, particularly in Scandinavia.
Price is always a consideration in every purchase we make, but when we look at our investment in Les Mills it’s more about the whole package – quality service and a proven concept which we see the value in. There’s also an emotional connection as we’ve always had an excellent relationship with our account manager Lena Holmberg over the years and a lot of our Instructors are Les Mills lifers, they’ve been teaching for a long time and absolutely love what they do.
We try to cover every corner of the industry and every column inch to keep up with the latest developments. So we’re regularly in the US - I’ve been to IHRSA every Spring for the last 19 years - Milan, London, constantly looking and listening for insights and inspiration as to the direction of the market. People sometimes are disparaging of trends, but it really can be the difference between a growing and shrinking membership base, so it’s something that needs to be taken seriously, particularly in an industry like ours. It’s an interesting time for trends at the moment, because you have a lot of the old favourites like strength, yoga, cycle and functional training, but also a lot of outdoor pursuits. Triathlon, in particular, is a big opportunity for clubs because participants require a lot of different training styles and we’re ideally set up to support them – particularly in the winter!
It’s very much a case of trial and error really, then reacting quickly and not being hesitant in deciding what to do once you start to see the results. When we see a new program or concept in the market we want to try it, and of course some things work and some things don’t. This might sound very Scandinavian, but for me it’s really about balance and giving members the right mix of what they want. Whether that’s gym floor equipment suppliers, group fitness classes, added extras – having a good blend will help to keep things fresh for members and provide the variety that you need to keep them for longer. The bigger the operation you have, the easier it is to keep the customer at your place. But you need to keep a constant watch on everything, whether it’s opening times, prices, added extras, loyalty programs. Competition is so tough these days, so you can’t afford to take your eye off the ball and become complacent.
I think for clubs there’s a real opportunity around cycle if we’re able to grow the market, and a lot of that comes down to the experience that you provide. If you look at some of the studios in London for example, they have dark rooms, with exciting lighting, colours and sound – it’s a real nightclub experience and people are willing to pay good money for that. If traditional clubs can replicate that feeling in their cycle studios, while still being able to offer members a wide range of other workout options, then I think they’ll be in a strong position to capitalise on this trend.
It’s the same with Virtual Fitness, which again works well when you have a really well-designed studio to support it. Fifteen years ago, the virtual experience left a lot to be desired, but today the quality of content that’s available is much better if you pick the right providers, and members are more receptive to the experience than they were before. Live classes with great Instructors will always be the pinnacle and will continue to fill the peak timetable slots, but Virtual is a great way to keep your studio working for you throughout the day and to give your members a greater amount of choice, which is what they want these days.
I think the biggest threat for clubs in our industry is thinking about things in the short-term and being too narrow-minded. Sometimes we can get so caught up in fighting with the competition, we forget that only 20% of the population are gym members and there’s a much bigger opportunity out there that we can all benefit from if we work together more. I think spending time meeting new people at conventions, networking and sharing ideas is so important and helps everyone to improve their business. A lot of big businesses in other industries spend large amounts of time working collaboratively for the good of the collective, and I think that’s something we need to think more about as the industry grows and the stakes increase. If we can grow the market, we’ll create a fitter and healthier society, so it’s one of those rare situations where truly everyone wins.
In two words – a lot! When you’re out travelling, you look at the service that’s on offer in hotels, restaurants and small shops. If you want to buy a drink, for example, you look at how they treat you, what they say, how they sell. More often than not – they’re miles ahead of where we are as an industry, so I think we can learn a lot from the businesses that do this well. It’s a mindset as much as anything, and a lot of it comes down to our training and the types of people we recruit. As an example, I want my group fitness managers to be like secret agents when they travel – constantly watching others in the service industry, noticing every little detail and thinking about how they can use these insights for the benefit of our clubs. I look at everything and I find I can always learn something from other people and businesses. You just have to know where to look!