In 1989, Di Williams opened her first Fernwood Women’s Health Club in Bendigo, a women-only gym offering a safe space for women to work out — a non-existent concept at the time.
Three decades later and Williams is still at the helm, responsible for 68,000 members and Fernwood’s 70 fitness centres around the country.
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When she started the company, the gym didn’t have a computer or a fax machine. Today Fernwood is embracing digital, adapting to shifting consumer habits and new competition in the market.
But speak to Williams about disruption and she will have nothing but good things to say about it. In fact, she embraces it.
“Disruption is good. I love change because it makes me think what can I do to be the disruptor? The way you look at disruption when it comes to business is if you think it will hurt the business it will, if you think it will make the business good it will.”
The veteran CEO is about to embark on another massive step for her company and introduce Fernwood Ultra, a smaller 500 square metre health club focusing on high-intensity interval training (HIIT) and other group workouts like spin and yoga.
The slimmed-down Ultra concept addresses what Williams identifies as a major disruption in the industry: the rise of smaller gyms focusing on HIIT where there is minimal equipment, like competitor F45. However she questions the sustainability of that model.
According to Williams, the idea for Fernwood Ultra was not to compete against other HIIT companies like F45 but to take advantage of real estate.
Fernwood Health Clubs need more than 1000 square metres of land, so Williams notes it is probably smarter to invest in small patches of real estate.
Another reason for the launch of the Ultra gyms is the disappointment her members face when they don’t see results from equipment like the treadmill and cross-trainer.
She said people go onto the treadmill and don’t get the results they are wanting. “Smaller gyms are the new trend and people are happy to pay more to get results.”
She has been developing the idea of Fernwood Ultra over the past 12 months, putting a business model together and waiting for the program to be developed.
Williams is thinking outside the box when it comes to transforming her business, introducing a wellness program called Empower. The program is developed by Deakin University as a six week program with each week focusing on a different aspect like emotional intelligence.
Attendees will have group sessions with a trained professional and be given homework. This is aimed for 8-10 people with both members and non-members able to enrol.
Williams said this idea came about as her members need time out for themselves. “There is too much going on in our lives — stress and anxiety is becoming a normal thing.”
Because Fernwood is based on a franchise model, Williams noted the Ultra branch of clubs will make it easier and cheaper for franchisees to open a fitness club.
The first Fernwood Ultra will be opened in early 2019 in Geelong with Williams signing a lease for a property in Frankston.
The popularity of the 24-hour gym
More consumers are using 24-hour gyms like Jetts Fitness and Anytime Fitness because of their affordability and accessibility, according to an IbisWorld report called Healthy Weight: Establishment numbers have increased due to the Popularity of 24 Hour Gyms.
The rise in health consciousness and obesity levels have also aided membership growth over the past five years.
However, with consumers opting for cheaper 24-hour gyms over larger full-service gyms there is stagnant growth in the market.
IbisWorld report predicts industry revenue to grow at an annualised 5.3 per cent over the five years through to 2017-18 to $2.2 billion.
The majority of Fernwood Health Clubs are also 24 hours. Williams made the switch when she noticed the emergence of Jetts and Anytime Fitness — it was a bit of a no-brainer.
She said with her gyms in the city there are more people working out at night than in the suburbs just because of the demographic and location.
With any industry, disruption is inevitable. In the fitness industry more gyms are using technology to appeal to their members, but there is also a surge in fitness apps.
Bao Vuong, a senior analyst at IbisWorld, noted that technology like fitness apps and virtual reality will be the main technology-driven disruptors for the gym and fitness market, but right now they are making a minimal impact.
He said “They’re changing the way people train and encouraging new ways for people to train and providing new methods. I’m seeing it as enhancing the gym experience rather than disrupting or limiting demand of gyms and fitness centres.”
Some of these apps are making a lot of money. For example, 27-year-old Kayla Itsines, known for her app Sweat: Kayla Itsines Fitness, came equal fifth and sixth with her fiancee in this year’s AFR Young Rich List — worth a whopping $486 million.
Last year she was only worth $63 million.
In Australia, the most popular fitness apps according to the Apple App Store are: MyFitnessPal, a calorie counter and diet tracker; Fitbit, the app complimenting the popular fitness tracker; and Sweatcoin, an app that pays you when a certain number of steps is achieved.
Williams does not think the emergence of fitness apps is doing damage to her bottom line, as she said everybody needs both personal and digital motivation.
She told Which-50, “We all have our snack-attack times when we really don’t want to be [working out] and you need to have that human interaction and community feel that you get when you join a club. Doing it on your own is okay now and then but it’s not a solution, I don’t see [fitness apps] as a threat.”
However, she thinks the apps would impact gyms which only have equipment and nothing else to offer such as on-site staff.
“At Fernwood, our level of service is very high so we have a lot of staff interaction and members interaction, it is a real community. You can’t replace that with what they have online.”
Vuong agreed saying these apps are more complementary than a threat.
“People come to the gym not just to train but for the social aspect of it sometimes as well. These apps are a lot more computerised and people might not like that as much.”
A different generation of gym
Newer gyms are taking advantage of technology and putting them at the core of their business. Rob Hale, general manager at Orangetheory Fitness said his company is underpinned by technology.
Orangetheory is a HIIT training focusing on one-hour workouts. It integrates technology through its personalised heart rate monitor, the OTbeat, which is displayed on large screen in the studio during a workout session.
Hale said, “This technology leads our members to greater results by supporting them to achieve excess post-exercise oxygen consumption (EPOC), a condition caused by reaching a heart rate of 80 per cent for 12 minutes or more during a workout and resulting in an excess of calories burned for up to 36-hours post session — the Orangetheory ‘afterburn’.”
He said this technology is key as it helps members push themselves but also notify trainers when to tell them to pull back. Members are also given workout summaries after each class.
Next year, the company will be releasing its new heart rate monitor, OTbeat Burn, which according to Hale will initiate name recognition when a member approaches a treadmill.
“Once the member confirms their name on the treadmill screen, their member profile will appear, which not only contains data from past workouts, but also aggregates data within the same workout,” he said.
Another new piece of technology soon to be released is OTconnect, a proprietary platform creating an ecosystem of data and feedback.
Hale explains, “During the workout, OTconnect will track heart rate, total calories, average/maximum incline, maximum miles per hour and total moving time — aggregating data to provide total distance achieved, even if the member goes on and off the treadmill.”
The future of gyms
With disruption comes the emergence of new technologies and the fitness industry is no different.
There are new technologies being introduced to the industry such as a VR headset that users can pop on and do a boxing class. There is a mirror which can be installed at home that has a fitness class built in so you can workout at home following the technique of your virtual instructor through live or on-demand classes.
One day gyms could begin implementing VR headsets and augmented reality. Williams hasn’t thought that far ahead, saying that technology is more of a “what if” than a solidified plan.
Vuong said he can see more gyms implementing technology into their centres like virtual reality, to stand out from the competition.
He said in the next five years virtual reality could have a notable impact on the gym and fitness industry. “VR could be used in a spin class to immerse a consumer in the experience of cycling like it was outside but doing it indoors.”