I read a fascinating article by management consulting firm McKinsey the other day. While focused on retail – a sector with which fitness has in any case long been compared – it resonated so strongly with me that I felt compelled to share not only the article in full, but also my take on the key points from a fitness perspective.
So, why did this article resonate so strongly with me?
In a nutshell, it’s because it absolutely echoes the things Wexer has been talking about for a number of years now: the vital importance of personalisation; the need to create true experiences for customers; and, of course, the urgent need for health clubs to create digital extensions of their offering if they are to survive. This sort of hybrid offering – where digital and physical come together to meet customers’ ever-more diverse needs and expectations – is what the Wexer ecosystem is all about, and it lies at the very heart of the current buzzword that is ‘omnichannel’.
Allow me to highlight a few key sections in the McKinsey article which I feel are worthy of analysis from a fitness standpoint.
Digital or die
More than 60 per cent of shopping journeys now have a digital component for either research or transaction, says the McKinsey article – a share that is projected to grow at a rate three times that of in-store sales. However, bricks and mortar stores are still essential, because the best customers use a combination of offline and online channels; one in three purchases, both in-store and online, are driven by omnichannel research.
Our take: For ‘stores’, read ‘fitness facilities’. This finding by McKinsey absolutely echoes what we know to be true about fitness: exercising outside of the gym does not make you any less loyal to your gym. If anything, the members who exercise both in and out of their club value their membership more highly, because fitness is an indispensable part of their everyday lives. However, to keep them loyal, you have to keep innovating; this is an audience that expects you to keep up with them.
Drive your revenues
The average omnichannel customer purchases 70 per cent more often than an offline-only shopper, and conservative figures suggest they also spend 34 per cent more than an offline-only shopper.
Our take: For health clubs, there’s an obvious revenue stream here: selling hybrid memberships, and potentially even digital-only memberships, to provide customers with carefully curated workout experiences away from the club. If you only sell to members when they’re in your clubs, you’re dramatically narrowing your revenue potential. Embrace those who want to use you more, and who are willing to pay for the privilege. Also recognise that, as the McKinsey authors observe, creating distinct products for online versus in-club affords you far greater flexibility on pricing.
Personalise, personalise, personalise
Personalisation, such as ‘tailored for me’ product suggestions and advice, is a key driver of trips to retailers across online and offline channels, but will only work if you know who your customer is – not only their needs, interests and purchase habits, but also their journey with you to date.
Our take: Health clubs have traditionally been data-rich and information-poor. Step forward technology such as the Wexer Mobile app which, by gathering information about each user, finally lays down foundations for effective personalisation – so key to building true loyalty. As the McKinsey article notes, though, businesses also need to get better at actively seeking insights – for example, via ‘social listening’, as well as by inviting input from customers – and then using these to create tailored products and services.
A diverse Experience – with a capital E
Just as Apple has made every visit to its stores a sought-after experience, so the McKinsey article references other retailers who have used their stores to create memorable experiences – the leather retailer, popular among musicians, who installed a stage in its Nashville store, for example.
Our take: Create immersive experiences. Make visits to your gym fun and engaging. Give members something in your clubs that they could never get online. We already know this is the way to drive customer satisfaction, and with it retention. But this McKinsey article overlays another notion: the concept of assortment. Make your gym a playground, with areas that continually have new stuff for members to try out. Help them shape their own experience. And use technology – such as Wexer Virtual – to make everything available all of the time.
Service first
Rather than investing exclusively in store associates, leading companies are leveraging virtual stylists and chat bots. In parallel, they are sharpening the associates’ tool kits to provide them with the most important information about the specific customer who walks in the door.
Our take: There are two great thoughts here. Firstly, that technology can be used to support in-person interaction to deliver 24/7 customer service; businesses just have to be absolutely clear on the distinct roles of each channel in the customer journey. Secondly, while health clubs have long had technology that identifies high risk members – with staff prompted to interact with those members should they come into the club – why not instead use individual customer data to enhance the in-club experience for every single member?
Which brings us to the article’s final observation: that “the winners will be those that listen and translate customer needs and expectations into carefully crafted channel strategies to meet and serve customers where they are – and as they move within and across channels”. They are speaking about retail, but their comments ring just as true for the fitness sector. It’s time to think out of the box – the box that is the four walls of a gym. It’s time for health and fitness operators to embrace an omnichannel approach.
“The time to act is now”, say the McKinsey authors. We couldn’t agree more.
For more information on any of the topics covered in this article please contact Robert Louw at robert.louw@wexer.com