Single vs Multi, The Channel Investment Conundrum
Trends need to be validated before investing in them.
2020 has challenged us all. Every being on the planet has, to some degree felt the impact of the pandemic. Health Club operators worldwide have dealt with incredible hardships during this time and despite everything, the industry is persevering. Business as usual is no longer usual because of the critical need for health clubs, gyms, studios and boutiques to be agile and creative in the types of programs and services being offered to today’s consumers.
During the early days of the shutdown, when it was clear that major adjustments were going to be needed to survive, smart club operators invested time and resources into learning where to improve, to reduce waste, and where to add to grow their businesses. The result is that new business models were born, many clubs added obvious services like virtual memberships and training packages. Others chose to add new experiences including in-person and online retail shops for members and non-members.
Most gyms and health clubs don't intentionally set out to create retail operations as a revenue stream to be managed and grown. A retail experience, as part of what a health club offers its members—and non-member community—in the way of unique items for personal use and gift-giving rarely ranks high on the list of must-haves. Yet this option is popping up in recent days as a smart way to generate revenue.
Of course, there are best practices that should be adopted to avoid unnecessary mistakes and to position the retail operation in the most favorable way. A few of the top considerations should be where the shop will be in relation to member traffic going from check in to locker room to fitness floor and back—and making it accessible for non-members to shop. Layout, location, sights, sounds, aromas and décor all come together to create a retail experience folks will repeatedly seek out.
A retail shop is a revenue stream that needs performance metrics, KPIs, management and reinvestment. It’s no different than a Spa or Café inside a health club. It must be a profitable, contributing segment of the whole, and that requires systems, procedures and attention.
Leverage data to set accurate inventory levels and to create customer loyalty. Proper attribution at point of sale identifies behaviors by various member types. Curate custom content and host retail events members won’t want to miss out on—FOMO is real! Non-member contact information can be collected and similarly used to do the same for this group.
When done right, a strong retail operation—like most any profit center—can produce a welcome revenue stream when membership dues are down. List out pros and cons to decide if retail operations are a fit. Due diligence is the backbone of any profitable endeavor.