Views on digitalisation in the fitness industry
Digitalisation did not make it as the official word for 2020, but it surely had the potential to do so. Driven by the lockdown digitalisation did determine the political, economic and social life in a particular way this year and has doubtlessly given the fitness sector an extra digital boost. However, there is more to digitalisation than streaming work-outs or enabling high-tech equipment for home gyms. It will determine the “inner workings” of tomorrow’s fitness clubs, it will give rise to new sports, it will motivate, and has the potential to bring people together through sports. At the FIBO Roundtable on 12 November fitness industry experts discussed the challenges, opportunities and risks of digitalisation.
Representing manufacturers were Anna Martin-Niedecken and Stephan Niedecken of Sphery and Michael Schmidt of ICAROS, fitness clubs were represented by Martin Heesch, Head of Purchasing at the RSG Group and Alexander Brenner, CEO LEXFIT. Also on board were Natalia Karbasova, founder of the FitTech Company, Anne Weinand, Director of ECC Köln, contact person for trends and developments in the digital world, Hermann Hoogestraat of softgarden e-recruiting GmbH as well as Anke Brendt representing FIBO.
Why digitalise? What digitalisation can mean
To Michael Schmidt, who offers a virtual reality fitness experience with ICAROS, digitalisation clearly serves to motivate people to exercise. Often especially teenagers lack exercise due to digitalisation in other areas such as computer gaming. “My personal goal is to make kids start exercising early on. The trick is to customise the experience for people and “meet” them in the other worlds they are probably moving in anyway. Many people are sitting in front of their tablets or gaming. It is our duty to also stay or become relevant for those new generations. You should be open to this,” says Michael Schmidt. The second area, he adds, is, of course, digitalising workflows at the clubs: check-in, attendance, training and tracking. “Digitalisation will penetrate everything,” says Schmidt and adds this not only refers to exciting tools and gadgets for club members but also to traditional back-office operations. “When it comes to digitalisation in the fitness industry, many first think of exciting digital applications such as Augmented Reality but have not even modernised their member management systems,” says Natalia Karbasova of FitTech.
“What I find exciting about this is the user interactions,” adds Natalia Karbasova. “To me digitalisation in fitness means using technology to better capture and measure body and health-related data – with the aim of monitoring, motivating and providing immediate feedback and guidance.”
To Herman Hoogestraat the focus is on another aspect: Fitness, health and wellness. In fitness training digital solutions can boost the fun factor. In health-centred training digitalisation can help to ease equipment use by allowing equipment to be pre-set for users. In the third area – wellness and well-being – showers with personally pre-set water temperatures can come into play. He feels that these aspects should not be mixed.
However, it is not only the goals that need to be identified here. A distinction must also be made within the different business models, especially because they are more or less advanced in digitalisation, feels Anne Weinand. “We sometimes experience huge gaps of five to ten years. Some lag years behind in digitalisation and have to be approached in an entirely different manner.” The quintessence, however, remains the same. It is about making customers’ lives easier.
Corona as an accelerator? The interest in digital offers at home and at the club
Digitalisation is nothing new for the fitness sector and yet the Corona pandemic is considered an accelerator for this development. During lockdown many club operators shifted and are still shifting to digital fitness and nutrition courses. Many of these offers will remain but there are differences according to Alexander Brenner. With LEXFIT he operates a fitness club in a rural area and reports that the initial interest has now started to dwindle noticeably: “During the first lockdown we registered good hit rates for our videos. During the second lockdown we are noticing now that hardly anybody makes use of this offer. Maybe it’s different in rural areas. People want to get out of the house, be active, come to the club, they want to mix and don’t feel like doing anything at home, in my experience. Of course, the enormous amount of online activities plays a role here,” adds Michael Schmidt.
For fitness clubs proper the crucial point is to move the assistance that digitalisation provides to the foreground. To this end, the applications must run automatically, the devices must be smart. “Is digitalisation something that accompanies and supports me without me having to activate it or having to remember a password each time, or is it just annoying because each device works with a different code and I have to remember so many new things,” Michael Schmidt points out. Often, he admits, technology is still too complicated.
“The customer must be in focus. Digitalisation for digitalisation’s sake is no use when you don’t know whether it generates added value for the customer,” warns Martin Heesch of the RSG Group and adds that connecting the exercise with the devices and the user is key. There are initial solutions for this offered by manufacturers but there is no cross-market standard allowing exercise to track work-out results across manufacturers. “I miss networks that mutually exchange,” adds Martin Heesch.
How do you use digitalisation meaningfully? Not all club members are digital natives
But do all members always look for more digital solutions? Or is it a question of generations? Hermann Hoogestraat, born in 1960, withdrew from working out at fitness clubs several years ago. He sees the risk of losing one’s body feeling if you follow digital gadgets too much. What’s more, digitalisation can also leave people behind. It is not enough to make digital offers available, he says, they also have to be explained properly. “Many small clubs have failed to customise the message for their members,” says Hoogestraat. In Martin Heesch’s opinion this also strongly depends on the customerbase and age structure of the club. “Do club operators really have to deliver this service and explain how ZOOM works, for example?”
To Anna Martin-Niedecken at Sphery digitalisation also has the potential of ensuring accessibility for different generations and types of club members. Digital applications can bridge the gap to people who have only pursued outdoor activities so far; or reach out to sports newbies who can first be motivated with the help of digital @home offers to then lure them into the clubs.
For this we first have to identify the demand because digitalisation is not an end in itself. “When I use a solution it must be optimally geared to customers’ needs,” says Anne Weinand and Martin Heesch adds: “You have to be very close to your customers to realise their needs.” Clubs don’t have to digitalise everything, he feels, they should rather differentiate according to target group.
For Anna Martin-Niedecken it is key to constantly re-orient oneself and to question one’s approach to all of this. After all, new emerging technologies change everything on a regular basis. “To stay on top of this change is a challenge but it also holds huge potential if you rise to it and stay in close touch with your various customer segments in the different fields.”
Is it always an advantage? The risks of digitalisation
“We have to understand exactly how and to whom data flows,” urges Natalia Karbasova because the risks associated with digitalisation lie in customers’ sensitive data, possible hacking attacks and interfaces that don’t work properly. Martin Heesch mentions that the use of fitness data by sickness funds is beneficial as insured people who exercise could be granted better insurance tariffs. At the same time, you place those at a disadvantage who do not share their data and therefore probably end up with higher tariffs. Natalia Karbasova agrees on this point: “It is high time we also addressed the issue of data discrimination.” To her the social perspective is a crucial one: What happens if the infringement of privacy is excessive? What happens if those who exercise less frequently and are less healthy are punished? “People tend to overestimate matters in the short term and underestimate them in the long term,” clarifies Natalia Karbasova. The social aspect is also very important to Anke Brendt: “FIBO serves as a relevant network but cannot have an influence on everything. We can set positive impulses however. The closer we cooperate the higher our impact.”
Natalia stresses another aspect: the risk of being ousted by digital equipment. Even though algorithms can be expected to increasingly improve in future, human attendance is necessary. “It is important to consider your form on the day, to not over-exert oneself,” agrees Michael Schmidt.
And there is even a risk of losing customers by digitalisation, warns Anne Weinand. Another risk is a potential bad investment because often high sums are at stake here. “This is why the solution should be meaningful and really provide added value,” says Weinand. Hermann Hoogestraat also points out the financial aspect. Against the backdrop of decreasing monthly membership fees the club will run the risk of no longer being able to pay for digitalisation.
And the fitness club of the future? The impact of digitalisation on business models
Discussed time and again in connection with digitalisation are proven business models such as the subscription model for fitness clubs as full-service suppliers. Natalia Karbasova questions this saying that it makes sense to give some thought to other business models if customers only want to use the service occasionally.
The RSG Group is currently experimenting with flexible memberships that can be terminated monthly and presents its initial findings. Needless to say, the tried-and-tested subscription models offer a high degree of economic safety for the company. “Without these models the average monthly fee would probably be a lot higher,” says Martin Heesch and adds: “It’s a blessing and a curse. What price-performance ratio can I offer to at least break even?”
Alexander Brenner emphasises that the subscription model with longer contract durations is very important especially for new companies when it comes to predictability. Even possible added sales of digital services cannot compensate for this because digital acceptance is not high enough yet. For Martin Heesch such offers, however, do make sense in order to address other target groups. “The added value must be high enough for customers to be prepared to spend more on it.”
What will definitely change in clubs in future is the look of the work-out areas. “There will be more technology moving in,” says Anna Martin-Niedecken. “I believe that due to the experience aspect we will sooner or later see a trend towards bringing different generations together again; also with a view to overcoming the hesitation or resistance of older people versus digitalisation.”