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Posted in Clubs, Cycle

They may have started out as pricey enclaves for just a few hard-core fanatics, but fitness boutiques are now big business – and they’re growing fast. Understanding what they’re doing right gives you the chance to do it better.

Despite their high cost, boutique gyms with a single activity are now the second most popular venue for indoor fitness1, with a whopping 21% total market share of the USD $22 billion dollar United States fitness market2.

Nowhere is this growth more evident than in the rapid expansion of cycle boutiques. SoulCycle now has 45 locations nationwide in the United States, with plans to open 50-60 studios worldwide by 2016. Cincinnati-based CycleBar has more than 100 franchises in 25 states3.

Like it or not, the boom in boutiques means the likelihood of a studio opening near your club is increasingly real. Here’s how smart operators are getting a head start on the possibility, and finding an opportunity in the threat.

Option 1: Open your own boutique

Some larger clubs are choosing to get in on the lucrative boutique action, partnering with smaller studios and offering them temporary or permanent space. In some cases clubs are giving boutique customers access to their own amenities.

Town Sports International has launched its own boutique offer, BFX Studios. David Barton Gym opened Cyc boutique cycle studios within their existing clubs – and predict that they will cover up to 22% of their total rent in 2015.

Competing head-to-head using a similar business model to boutiques certainly has its benefits, but it could become an unnecessary distraction to your core business. If it requires a separate venue, it won’t necessarily solve the issue of competition for your existing club.

Option 2:  Protect your patch with a single-minded strategy

Multi-activity clubs still offer a superior value proposition. Refocusing on your existing cycle studio can achieve improved results, meet your millennial customers’ needs, add value to your membership, and block high-end boutiques from gaining entry in your market.

In many cases, boutiques are winning because of the mediocrity in traditional multi-activity clubs.  By stepping up your game and following some best practice behavior such as an obsession with optimizing every single customer experience, there’s no reason you can’t provide a high quality mass-market cycle experience.

As a multi-activity club you also have the advantage of being able to focus on the things that boutique clubs can’t:

•          Greater quality of programming backed up by science that allows you to guarantee a far more consistent experience across instructors – something that’s a frequent source of complaint for customers of boutiques

•          Use of experiential technology such as THE TRIP™ classes from Les Mills, which take riders on a journey through a world of high definition graphics. Equinox is investing in something similar with ‘The Pursuit’ in their multi-activity clubs

•          A better and more systematic fitness, exercise and programming prescription, made possible through your broader fitness offer. For example, educate your customers at point-of-sale about your combination of cycling, strength and mind-body flexibility classes.

By reinvigorating your cycling offer (along with your other high quality programs), you can add more value to your membership and create much greater market appeal.

With the right timetable and approach, you can make cycling a massive success in your club, and increase your profitability by getting more people moving, more often.