The boutique fitness sector has grown exponentially in the last few years. In London, a new boutique fitness studio appears to be opening on a different street corner almost weekly. But is there a ceiling: have we reached the 'peak of boutique'?
Having listened to industry leaders speak on this very topic at Sweat and having spoken to our clients and contacts in the Health & Fitness sector, it is clear that the boutique fitness sector is becoming increasingly competitive – especially as the sector is, on the whole, targeting the same group of customers. A 2018 report published by ukactive on 'Global Boutique Trends' showed that in London the average age of customers registered at boutique studios was 31 years and 11 months, and 83% of members were female. The flipside is, of course, that there is potentially a large, untapped customer base waiting to be successfully targeted.
The challenges faced by boutique studios includes competition for good sites in prime locations, thus pushing up rents, and competition for quality trainers and instructors, making retention more challenging and pushing up wages. However, the established players in the sector are also facing more complex and challenging risks presented by new technology that subverts the traditional paradigm of customers visiting a physical studio to exercise. The growth of businesses like Peloton, enabled by technology, means that customers can - arguably - obtain a boutique-like fitness experience in their own home.
Businesses in the sector are also grappling with the challenge of customer stickiness and ensuring that their brand, and increasingly their social media presence, remains relevant and attractive to Generation Z, commonly defined as people born from the mid-1990s to the early 2000s. Just as the industry thought it had got to grips with its millennial audience, it now needs to woo a new generation who have grown up using social media. Gen Z's boutique experience can be just as much shaped by social media (before, during and after training), as it is by the physical experience of the training session itself. 'Brand identity' and 'authenticity' were the watchwords at Sweat for Generation Z.
So have we reached peak boutique? The prevailing view in the market seems to be that we are not there yet. Customers still love the bespoke, tailored offering that only a boutique operator can provide and the thinking seems to be that there is further room for expansion by boutiques appealing to a broader demographic, e.g. older age categories. However, to offset rising costs, it is likely that we will see consolidation of boutique operators which, while retaining their own distinct brand and offering, combine admin and central costs. Could this be the boutique fitness story of 2019?