In 2014, a sizable East London waterfront retail space which had been conspicuously empty for years, suddenly took on a new look. Gaudy red hoardings appeared, with an oblique strapline about ‘a better you’, or words to that effect, plastered all over them.
Over the year that followed, nothing much happened, except rumour. This space, atopped by multi-million pound apartments, and overlooking a swish marina, was apparently to become a gym. Not just any gym. But a top-flight boxing gym, tipped to attract pro-fighters to train alongside affluent locals.
Then the tradesmen arrived, and things started to take shape. In went the electronic neon-trimmed turnstiles, the plush concierge desk, digital key-free lockers and of course, state of the art fitness equipment. Part of the venue was earmarked to become a restaurant: a ‘destination’ of haute cuisine, where pumped punters would blow-out.
Eventually, the doors of this super gym flew open. Passing by, one could see the top of the concierge’s hair-do, peeping over the imposing counter, on which perched an equally imposing vase of orchids, refreshed every few days.
Outside, multiple spring-mounted signboards assaulted passers-by in the breeze, sporting the now-evolved strapline ‘Our focus is you’. Membership deals abounded. In this age of fitness fixation, here was a cutting-edge gym, meeting a burgeoning demand.
Or was it?
All the ingredients of a vibrant business were in place, with its proposition metaphorically etched into the Victorian railway arches behind which it was located: ‘you’re rich, we’re high-end, our focus is you’.
One thing puzzled, though. Day after day, evening after evening, the place was deserted. You could almost hear the concierge’s nails drumming with boredom on the highly lacquered desk.
Something wasn’t right, and that something was the proposition. To cut a not very long story short, a year later, the gym quietly closed – without the restaurant having even opened.
The reason, as is often the case for boxers, was right in front of their noses. Namely, the new growth-craze, personal trainers. Walk around London’s parks and you see them out in force. Typically, a fit-looking young man, bearing over a bulging, perspiring lycra-clad office worker, and pushing them ever closer towards cardiac arrest. As a business model, it’s ultra-efficient, and ultra-low budget. No concierge, just a ‘meet you in the part at 6.45 (am or pm)’. No orchids on the counter. Just daisies on the grass.
Market analysts IBISworld value the personal trainer market at around £626 million, and growing at almost 3.5% a year. Contrast that with fixed location gyms, which although valued at £2 billion, carry much higher overheads – and revenues are slowing, as fitness fanatics trim their outgoings.
Just before the gym closed, one particular personal trainer modified the fly-by-night, one-on-one format, and started using the local park’s Victorian bandstand as a pop-up gym.
Like the ‘big’ gym, this one offered a pleasant environment (the park), some pretty serious equipment lugged in and out on a daily basis, and a credibility which only a static venue (even if it’s only a bandstand) affords. At the same time, fees are presumably a lot lower, and there are (again presumably) no tie-ins or contracts.
Every morning and evening, it attracts whole classes of fitness folk: rowing, lifting, pedaling, contorting and noticeably, smiling. If all the people who use this gym had taken out expensive memberships with the other one, it may never have gone out of business.
So what do we learn from all this?
I think the main thing is, don’t make assumptions about your target market. Just because an area looks affluent, it doesn’t mean its population have money, as well as fat, to burn. Don’t simply arrive in a location with just demographic data to go on. Use intelligent, honest market research to ascertain the true picture.
What’s more, ironically, the better-off tend to be the more parsimonious. That, they say, is how they became well off in the first place.
Finally, look at trends closely. Today the fashion is for the hipsterish temporary feel, hence all the pop-ups. Tomorrow things could change, with a return to solidity and permanency.
Ignore these factors, and your business will end up as yesterday.