The Year in Review
by Bill Davis, President and CEO, ABC Fitness Solutions
2021, the great leap forward
There is no doubt about it, 2020 was possibly the most challenging year many of us have ever faced.
With the continued fallout from COVID-19, this past year was unlike any other. As one of the industries most impacted by the pandemic, the fitness industry experienced rapid change. This, of course, included the acceleration of many trends that have been discussed for years, such as digital member engagement. While the world continues to grapple with the effects of the virus, we think it is important to take time to reflect on what this year has meant to both ABC and our industry at large.
Challenges and Opportunities for Fitness
The impact of COVID-19 will be felt for years to come, and beyond the obvious disruptors to day-to-day club operations, the fitness business has seen significant change as club operators and gym owners responded to the crisis.
With access restrictions and some outright closures, member behavior changed seemingly overnight. The industry responded almost immediately by thinking outside of the box and beyond the brick-and-mortar, because while resources were limited, the mission to build healthier lives through fitness was unchanged.
From virtual classes, placing equipment outdoors, new membership structures, at-home programming adapted to use household items, and more, the creativity on display was awe-inspiring.
During the initial stages of quarantine, we saw the need to provide resources and information to clubs amid ever-changing regulations and shifting customer sentiment. In response, the ABC team focused the efforts in 3 areas:
- Providing timely resources from the industry and communicating often,
- Sharing data trends and insights with IHRSA and state alliances to aid their lobbying efforts such as #Fight4Fitness and #GymsAreEssential, and,
- Creating automation tools to facilitate faster reopening and member communication.
The outcomes of the fitness industry’s collective efforts show a cautious optimism: as of December, more than 17 million members returned and joined a gym, checking in more than 195 million times. This data is a positive indicator that while some are still hesitant to return to their fitness routine, the demand for membership, and the community and lifestyle it delivers, still exists.
However, with an unprecedented 1 million plus members still on freeze, our focus will continue into the new year as we build back stronger. Luckily, the data also has shown that though about 25% of the members on freeze will likely cancel, about 30% will return to billing and the rest will likely extend the freeze. The opportunity for club operators is to be proactive in reactivating and engaging their member base. Proving yet again, personalized member engagement is critical to success for any club in 2021.
I shared how to boost your member engagement and more, using this data plus other industry best practices, during the recent Future of Fitness Summit.
Staying True to Our Mission
2020 was a year of many firsts. For ABC Fitness Solutions, this was particularly true as we experienced a number of major milestones for our company, right down to our very name and brand. This rebrand, while signifying our focus on delivery of both fitness-forward solution suite and first class services, amplifies our long-time mission: promote healthier lives by helping clubs put their members first.
I am proud to look back at the last year and say all of these efforts and “first-ever’s” were rooted in our unwavering commitment to our clients and the fitness industry. These key accomplishments included:
- Consistent product updates and new product introductions, including capacity management to streamline member and staff scheduling, a virtual location for group exercise classes, and text-based reminders for members.
- The first-ever ABC User Summit saw over 800 in attendance. We plan host this unique event in person annually, starting in 2021.
- No price increase or change to our SLA in service. We remain flexible with no-contract commitments, all-inclusive conversion and dedicated team of client success managers.
- Acquisition of GymSales and Trainerize to supplement ABC’s holistic and modular club management solution designed to boost fitness clubs and gyms of any size.
Across the entire ABC community, including our subsidiary W12 in Brazil, we now support over 16,000 clubs and 150,00 fitness professionals in 38 countries – powering nearly 270,000 workouts and tracking 1M meals every single day.
Knowing that we are able serve over 25 million consumers through our clients, so they can continue their fitness journey, makes us stronger every day.
Defining the New Fitness Value Proposition
As we have seen in 2020, the fitness industry has caught the eye of big tech as a new frontier for investment as evolving trends open new opportunities.
Healthy investments by mainstream brands, including Lululemon acquiring Mirror for $500M, the launch of Apple Fitness+, or the latest addition of Peloton acquiring Precor, valued at $420M. These activities indicate that the digital components of fitness are no longer a nice-to-have, but rather a must-do for any fitness business.
ClubIntel’s November 2020 reports that 1 in 5 members have stopped exercising altogether. Most members who didn’t return to the gym are likely to exercise on their own without digital guidance, and those who are utilizing digital are typically leveraging third party platforms outside the club. Does this represent pent-up demand for memberships in 2021? Potentially. However, this clearly indicates that, despite a plethora online workouts or availability of content, there is still potential for club operators to offer virtual fitness for their members as a trusted source for guidance, accountability, and engagement.
According to FITT insider, wearable device sales are up 30% YoY, with the smartwatch market growing to $13B globally by 2025. The trend of consumers wanting to have fitness and health part of their daily routines, opens the doors for clubs to integrate themselves fully into their members’ lives, making fitness easily accessible and convenient.
At the end of the day, digital and virtual are additive components to the consumer’s lifestyle, not replacements to their existing fitness habits. Len Kravitz Ph.D, of University of New Mexico, when examining workout motivation, determined that “numerous studies show that social support from a significant other or meaningful friend is highly associated with exercise adherence.”
During my presentation at IHRSA’s Innovation Summit titled “Reinventing the Fitness Value Chain,” I shared that, much like the music and entertainment industry, those who can create and deliver holistic experiences well will ultimately result in longer subscription and engagement.
Hence, I believe the new fitness value proposition is delivery of a personalized Total Fitness Experience: where the club brand is conveniently immersed in the member’s daily fitness routine no matter where they are. Each engagement is curated and personalized to inspire accountability and success. Most importantly, a holistic fitness journey is part of a larger community that delivers beyond exercising, combining nutrition and healthy habits for holistic wellness.
For club operators and fitness professionals presented with these new opportunities, having a differentiated and unique business means taking a look at all operations and how to: manage and maintain facilities and amenities that marry both the physical and virtual experience, train and retain the best staff that can create programs and content to be consumed in-person or on-demand. The Total Fitness Experience is only possible when facilities, people and programming are connected and delivered by technology.
As we look towards what the future has in store, we feel the unique changes brought on by 2020 have prepared us for this next level of fitness and emboldened the creativity and passion for innovation that will propel fitness forward. This past year’s challenges will only serve to continue to accelerate and shape where fitness goes from here, and all of us at ABC couldn’t be more ready to be there for our customers and their members every step of the way.