Disruptor #10 - Pure Gym
Pure disruption hits the gym
We’re dedicated to helping you disrupt your markets. Or cope with it when the inevitable happens. And to help with a little insight and inspiration of how it’s done, we’ve created the Virgin Media Business Disruptor 10 list, in conjunction with Fast Track 100 – as published in The Sunday Times.
So, for the first time ever, Fast Track not only releases a list of the UK’s fastest growing privately held companies. We also get a round-up of the 10 firms that appear to be the most disruptive.
All of them are irreverent players giving two fingers to anything that smacks of staid and stagnant convention. They’re grasping opportunities presented by technology, powered by fresh-thinking and a can-do attitude.
Here, in the first part of our 10-part series, we find out how disruption can sometimes be misinterpreted as corporate vandalism. Step forward, Pure Gym.
Use tech to out-muscle the big girls and boys
Success in the gym doesn’t come easy. And yet, on the surface, Pure Gym’s rise seems as effortless as one of Adam Peaty’s superman push-ups. However, being disruptive is never quite that simple.
In just seven years the enterprise has gone from zero members to around 850,000, making it the largest gym chain in the UK – indeed, the largest gym chain there has ever been in the UK. Humphrey Cobbold makes no secret of what he thinks fuelled this success; it was a simple matter of doing away with contracts, redefining the gym’s long-held luxury image and recasting it as an affordable facility with mass appeal to all people and pockets while not sacrificing the quality on offer.
A reasonable £20 decision
Humphrey says: “In the nineties and early noughties gyms had convinced people they needed saunas, Jacuzzis, cafes and swimming pools with chrome and glass all over the place. You even had to sign a 12-month contract. If members paid the minimum of around £40 a month it made gym membership a £400 to £500 decision."
"We tore up the contract and made joining a £20 decision while also designing gyms that could serve twice the number of customers for the same revenue but at a much lower cost.”
The response from the public took even Pure Gym’s founder, Peter Roberts, by surprise. The combination of no contract, low monthly fees and the additional perk of 24-hour opening created a new market, with between 30 and 40 per cent of the firm’s members never having belonged to a gym before. Pure Gym now operates 170 sites across the UK and Humphrey believes there is demand for up to 150 more.
A tech-powered assent
He says: “There are 6,400 gyms in the UK and we have around a nine per cent market share in terms of members. We’ve opened up the market to new people and we’re still growing. In 2011 7.4m people belonged to a gym. Five years on that figure is 9.2m and we’ve definitely played our part.”
Technology has been an essential part of Pure Gym’s assent. Sign-up is exclusively through our mobile optimised website, which we built and managed in-house, and a growing proportion of our gyms offer additional paid-for benefits, such as advance class booking, which are also subscribed to online.
Humphrey says: “Technology isn’t just a part of what we do. It’s an integral part of the business because every element of what we do has to pass through the website – we don't do any paper-based sign ups in the gyms. When we bought LA Fitness they had 120 people selling memberships in gyms, whereas we have none – our technology has to do the work these people did. Most consumers simply control their membership through their smartphones and we’re working on functionality to link to other fitness apps like My Fitness Buddy and Strava. We’re also rolling out new technology to control energy use and utilities, from air conditioning to water temperature. It’s about applying technology to every layer of the business to make it efficient and proficient.”
Media whipping boy
So far, so good, but has Pure Gym actually changed the market and influenced its competitors – the hallmark of all truly disruptive firms?
Humphrey says: “Copying us is harder than it looks. It’s not easy to build the technology, meet demand and manage things well. Fitness First failed with their budget chain, Klick Fitness for example and even a “big” brand like Easy has only reached 15 or 16 gyms while we have opened 170. I think it is fair to say that Pure Gym has forced all the major players to focus on what they are trying to do.”
As we well know, disruptors have their detractors, and Pure Gym spent a brief stint as the media’s whipping boy when they removed swimming pools from several former LA Fitness sites.
Humphrey says: “You have to accept that being disruptive doesn’t mean everyone is going to like you. We took a lot of grief when we bought LA Fitness last year. After taking over 43 sites we are converting 31 and stripping out every single pool. I had a member of the House of Lords accusing us of corporate vandalism and an Olympic Gold medal swimmer giving me a hard time on National TV. As a disruptor you have to believe, you have to be thick-skinned, resilient and remain focussed on what you’re doing. In removing the pools we were listening to the silent majority who wanted affordable gyms rather than paying for an expensive and underused amenity.”
One year on and with no sign of reduction in demand for Pure Gym memberships, it looks like Humphrey could be right.