Boutique Fitness Studios are leading growth in health club industry
Bathing suit season may be creeping toward a close, but that doesn’t mean fitness is going on hiatus.
Millions of Americans are health club members, but where they’re working up a sweat has changed. Nationwide, more people are heading to small, intimate "boutique" fitness studios, which typically offer group fitness classes and private sessions in a setting that often feels luxe and tailored.
In the past five years, boutique fitness studios have become a global phenomenon that is disrupting the mainstream health club industry. Soul Cycle, Flywheel, Exhale, SLT, Cross Fit, Pure Barre, Orange Theory Fitness and Core Power Yoga are just some of the heavy players in this niche industry.
Boutique studios are here to stay, creating significant growth opportunities, and as a result the fitness industry may never be the same.
Research conducted by the International Health, Racquet & Sportsclub Association (IHRSA) shows 54 million Americans, or 18.5% of the U.S. population, were health club members in 2016. Of that, 42% are members of a studio, which includes a boutique or discipline-specific facility.
The studios might be small, but the money is big. In 2016, the U.S. health club industry tallied $81 billion in revenue, a 7.4% increase from 2015, according to IHRSA, and “much of the industry’s growth has come from smaller boutiques and sport-specific studios.”
“Millennials are not cheap, but frugal. They are willing to spend money if they find value.” Matt Powell, sports industry analyst, The NPD Group
And IHRSA research shows that studios are expanding into smaller towns that normally wouldn’t sustain larger health club facilities, because boutiques have lower overhead.
There are a number of reasons for this shift, according to Bruce Cohen, head of private equity and strategic practice at management consulting firm Kurt Salmon, which included a lengthy feature on boutique studios in the latest issue of the biannual Kurt Salmon Review.
Among those reasons are a population of consumers who are more informed about health and wellness, a focus on convenience, and a desire to connect with “instructors who give the sense of being deeply marinated in what they’re doing.”
“More and more consumers aren’t just looking at the product but the connection,” said Cohen.
Though health and wellness is a multigenerational trend, Cohen said the biggest push into studio classes is happening among millennials. Though they were hit hard by the recession, these younger consumers are paying a premium for the boutique experience.
“Millennials are not cheap, but frugal,” said Matt Powell, sports industry analyst at The NPD Group. “They are willing to spend money if they find value.”
And a trip to the gym is more than just in keeping with living a healthy lifestyle.
“When you’re in a class, you see the same people week after week. It becomes more of a social phenomenon,” he said.
This is a phenomenon that Michlyn Gazaway, founder and CEO of Otium, a boutique fitness company that incorporates yoga classes, barre classes and group TRX suspension training classes, has put at the center of the Otium experience.
“In a small studio, everyone knows each other and our clients form close interpersonal relationships from sweating (and sometimes crying) together. A yoga class class can be a vulnerable place for many of our clients. We offer a safe place. There is no ego or judgement in any of our classes and the strong sense of community that is built within these walls is what keeps our people coming back. When someone puts a hand on my shoulder and says "this has changed my life" then I know that we have done exactly what we set out to do when we created Otium".
But ultimately, these facilities have to provide more than just a good feeling.
"When assembling our group of instructors, we knew the importance of premium instructors who are committed to their individual disciplines and providing an unparalleled experience to our clients. We also view our team as a family. We try to keep the group small with a lead instructor in each area of fitness that we provide. This minimizes turn-over and strengthens the relationships between clients and staff. There is a lot of love within these walls . . . and a certain level of accountability as well" said Michlyn.
In it's first year in business, Otium received 33 inquiries about a possible franchise. The first franchised location is weeks away from opening in the historic district of Savannah, Georgia. Owner, Allison Falkenberry, said "when I first walked into Otium, I knew I had to have one. I came in for a class but entered through the shop - which is progressive and beautiful - and I wanted to purchase everything. It's genius, really."
The shop at Otium houses over 85 lines of luxury activewear, yoga accessories, jewelry, gifts and natural apothecary. When you combine the art of luxury (and affordable) fitness and a carefully curated boutique of (sustainable) products produced in ethical environments . . . you have something special.
If you are interested in learning more about the growing industry of boutique fitness, or if you are interested in bringing the Otium love to your area, send us an email :: firstname.lastname@example.org