Boutique Fitness Solutions (BFS), a private network of boutique businesses with the mission of educating, connecting, and supporting members, released its 2021 State of the Studio Market report. The report, using data gathered from BFS studios and clients, evaluates the current state of the boutique fitness industry and reveals new insights on industry trends and challenges.
Ntiedo Etuk, BFS co-founder and founder and chief executive officer of FitGrid, the fitness studio app that connects classmates and studios and facilitates more than 2 million fitness class reservations each month, presented the report at the Future of Fitness virtual event. He also shared new data from thousands of FitGrid studios, highlighting how technology can address the trends and challenges facing the industry.
The BFS survey identified three specific trends studios are experiencing, including leveraging technology to automate operations, celebrities becoming the new face of fitness, and the increase of collaboration amongst studios through Community Gyms Coalitions. BFS and FitGrid are working to help boutique studios keep up with the trends and improve their positioning in the marketplace.
The shift in consumer habits due to the pandemic is driving an increase in demand for healthy living services. Consumers increasingly understand that exercise is directly correlated to lower instances of diabetes, obesity, heart disease, and other health problems. As a result, they’re turning to studios to help them make positive lifestyle choices. FitGrid’s data shows users’ top fitness goals include to “generally be healthy,” and top motivators for users to return to the gym include “having a routine, being part of a supportive environment and changing exercises/variety.”
For studios to meet increased demand, owners need to secure additional instructors and diversify staffing sources. Addressing the challenges below will allow studios to rebuild the industry as well as their businesses.
Top Three Challenges for Studios Today
According to the BFS survey, the top three challenges studios are facing include:
The pandemic pushed studios to either close their doors or go virtual, which distressed numerous independent studios. Three days into the pandemic, FitGrid bridged MindBody and Zoom platforms to allow studios to retain open and provide online classes immediately. As the pandemic is coming to a close, clients are enjoying the hybrid option of in-studio or virtual classes; however, it is clear people are interested in returning in-person to studios.
FitGrid data shows about 28% of all classes offered are in the virtual category. Last June in the midst of the pandemic, the percentage was about 40%. With the summer being here and current vaccination rates, it can be expected that 28% to continue falling over the next few months. It is unclear if this percentage will stabilize or increase as the cold weather returns.
“People have been working out in their houses for the past year. That convenience is baked into their routine now,” said Ntiedo Etuk. “If you, as a studio owner, want to compete with that, then you have to move your community to a digitally based one—complete with the ability for people to interact, find and meet friends, connect with each other, and interact with their instructors all as the Pelotons of the world do.”
The need to rebuild membership post-pandemic stems from lifestyle changes around different work-from-home and school schedules, individuals’ comfort in returning to in-studio workouts, and new fitness habits individuals developed over the course of the pandemic.
In response to the membership challenges, the survey reports “industry leaders are seeing success through manual email blasts, individually calling and texting clients and utilizing automated win-back emails.”
The FitGrid app gives studios the technology to build community, retain members and has helped thousands of studios retain more than half of their members since the start of lockdown by delivering insights about studio instructors and clients direct studio owners. The app gives studio owners and instructors the ability to send targeted automated reminders and messaging to clients based on their needs, which is proven to increase membership. Members who receive an instructor follow-up via FitGrid continue to return to classes and spend 34% more and 57% of all first-time clients who receive a message from a manager or owner buy an unlimited package within 30 days. Data shows 18% of studios had equal or better attendance in May 2021 than they did in May 2019 and of the 18% of studios with flat or better attendance, the median attendance increase was 26%.
Acquiring New Clients
Fitness studios are finding themselves facing increased digital competition; however, many of these studios identified as lacking in marketing expertise. This continues to be an issue as foot traffic has not fully returned to studios.
In efforts to increase client-base, “industry leaders are seeing success with highly targeted and results and outcome-focused programs. Success is also being seen with refer-a-friend promotions and corporate memberships.”
Ntiedo Etuk’s FitGrid addresses this challenge by allowing instructors to directly communicate with clients. FitGrid data shows that client outreach messages have a 98% delivery rate and 14% of all client outreach messages sent start a real conversation with the client. It was also found that more than half of first-time visitors end up buying a package or membership within 30 days after receiving a FitGrid message.
Before the pandemic first-time clients were returning to the same fitness studio at a 40% rate; however, with FitGrid in place, studio loyalty increased during the pandemic with first-time clients returning at a 50% rate. This created a 25% jump in client retention for studios.
The app also serves as a social outlet for clients that is proven to increase attendance and referrals. FitGrid reports members who connected with other classmates via apps similar to FitGrid attended 66% more classes. Members can also refer friends to join studio classes via the app. Studios are seeing an average of one new client for every six referrals and when clients use invitations in the FitGrid Class App, 15% of the people they invite to take a class at that studio within one month.
Between the surge of new fitness habits, hybrid fitness trends, and studios reopening, owners are facing staffing shortages. Many part-time instructors are dispersed all over the country and are working at multiple studios. Studios are also finding difficulty amongst compensation and team roles with instructors wanting to be paid more for less. 28.5% of studios plan to pay instructors more, 67.3% of studios plan to pay instructors the same and only 4.2% of studios plan to pay instructors less. These trends address the shift of studio owners beginning to return to in-person classes as the pandemic begins to slow and the new wave of competition studio owners are facing.
To combat these challenges the survey shows “studio owners are utilizing referral fees, training for aspiring instructors and recommendations from their team to help acquire new talent. They are also offering prime teaching slots to instructors on a first-come, first-served basis to encourage previous instructors to return sooner than later.”
FitGrid’s unique B2B services have been aiding studio owners with this issue by allowing studio owners to receive and view feedback from clients about each instructor and their classes. This data not only helps studio owners and instructors curate classes for their clients but also allows studio owners to schedule and organize instructors as needed.
Addressing the Challenges
Based on the survey, 65% of independent fitness studio owners predict solid growth for the next two years; however, studio owners are faced with the issue of how to rebuild over the next six months to keep up with the industry.
BFS found “studios owners are increasingly aware they have to become knowledgeable chief technology officers to manage their technology stack. This has resulted in a pullback of mandatory software, such as booking, billing, communication, and basic virtual offerings, and are re-applying other software programs” to combat the three main challenges mentioned above. Studio owners are retreating to specific systems and being very particular about the additional software systems they choose to subscribe to in order to get clients back in studios.
Data shows clients who receive a follow-up after their first visit take 15% more classes over the next 60 days. FitGrid’s follow-up email open rate is 73%. This is why Etuk has been focusing FitGrid’s advanced intelligence software to aid studio owners with marketing, messaging, and follow-up automation while also providing the social aspect studios’ clients need and want to remain engaged.
The BFS Studio Market Report included 71.1% independently owned studios, of which 79.3% owned more than three locations. These studios are located across the United States, Canada, and the UK.
FitGrid is the only software that allows fitness studios to leverage the power of their community to drive business and profits while giving consumers the ability to search and connect with the people and places that can help them achieve their fitness goals. At the start of the COVID-19 lockdown, the team quickly pivoted to launch FitGrid LIVE. FitGrid currently supports thousands of studios on six continents.