UK FITNESS SCENE 23 Disruption is coming! ... and not everyone is going to like it What disruption is coming? The disruption is going to be in the way operators buy gym equipment, an industry wide change from a ‘Push’ Model to a ‘Pull’ Model. What is a Push Model? A push model is where operators meet with equipment suppliers and ‘Push’ Equipment into gyms with no data on what customers demand actually is for the equipment. This model is very inefficient at getting the right equipment, in the right quantities to meet with customers demand. What is a Pull Model? A pull model is where the customers are enabled to pull the equipment they want into the gym, in the cor- rect quantities to match their levels of demand. How does the Pull model work? By measuring how much customers use the equipment, and what their demand levels are for it, is the start- ing point. It is like the Point of Sale system in a supermarket, by measuring how many items are being bought, the supermarket know how much to restock of each item and customers ‘Pull’ products onto the shelves, operators restock according to what customers demand levels have been – this is a ‘Pull’ model. By measuring the demand levels for gym equipment we do the same, where it is this information on customer demand that determines what equipment and in what quantities gym operators should restock, when they do a refurb. What is wrong with the Push model? Without information on customer demand too little of some equipment is bought, and too much of other equipment. The shortages cause customers to be frustrated, and the excess equipment is a waste of money. This is exacerbated by the influence equipment manufacturers have on the process as they are incentivised to sell more expensive equipment. Is it a coincidence that the most oversupplied equipment into the industry is the equipment manufacturers make the most money on, and undersupplied is the equipment they make the least? What are the benefits of a ‘Pull’ model? The first benefit of the pull model is once operators restock equipment according to customers demand levels for it they remove the equipment shortages which makes customers a lot happier, and this improves reten- tion. The second benefit is operators stop buying the excess expensive equipment, reduce their cost base, making them significantly more profitable. So who are the winners and losers of a Pull Model? Customers will win as equipment shortages are removed. Gym operators will win as they have happier customers and do this at a lower cost, as they remove the waste, excess kit from their gyms. The equipment manufacturers however will be the losers, as they will no longer be able to push excess expensive kit into gyms. We anticipate the change to cost manufacturers tens of millions over the coming years. Rory McGown © 3dmentat – Fotolia.com © Ramain – Fotolia.com Top 3 equipment shortages in gyms 1) Benches (and dumbells) 2) Soft Stretching Mats 3) Cables Stacks Top 3 oversupplied equipment types into gyms 1) Crosstrainers 2) Treadmills 3) Upright Cycles Most Undersupplied Most Oversupplied

UK FITNESS SCENE Advertiser’s announcement …...UK FITNESS SCENE 23 Disruption is coming! Advertiser’s announcement... and not everyone is going to like it What disruption is

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UK FITNESS SCENE 23

Advertiser’s announcement

Disruption is coming! ... and not everyone is going to like it

What disruption is coming?The disruption is going to be in theway operators buy gym equipment,an industry wide change from a‘Push’ Model to a ‘Pull’ Model.

What is a Push Model?A push model is where operatorsmeet with equipment suppliers and‘Push’ Equipment into gyms with nodata on what customers demandactually is for the equipment.

This model is very inefficient atgetting the right equipment, in theright quantities to meet with cus-tomers demand.

What is a Pull Model?A pull model is where the customersare enabled to pull the equipmentthey want into the gym, in the cor-rect quantities to match their levelsof demand.

How does the Pull model work?By measuring how much customersuse the equipment, and what theirdemand levels are for it, is the start-ing point.

It is like the Point of Sale system ina supermarket, by measuring howmany items are being bought, thesupermarket know how much torestock of each item and customers‘Pull’ products onto the shelves,operators restock according to whatcustomers demand levels have been– this is a ‘Pull’ model.

By measuring the demand levelsfor gym equipment we do the same,where it is this information on cus-tomer demand that determineswhat equipment and in what quan-tities gym operators should restock,when they do a refurb.

What is wrong with the Push model?Without information on customerdemand too little of some equip-ment is bought, and too much ofother equipment.

The shortages cause customers tobe frustrated, and the excess equip-ment is a waste of money. This isexacerbated by the influence equip-ment manufacturers have on theprocess as they are incentivised tosell more expensive equipment.

Is it a coincidence that the mostoversupplied equipment into theindustry is the equipment manufac-turers make the most money on, andundersupplied is the equipmentthey make the least?

What are the benefits of a ‘Pull’ model?The first benefit of the pull model is

once operators restock equipmentaccording to customers demand lev-els for it they remove the equipmentshortages which makes customers alot happier, and this improves reten-tion.

The second benefit is operators

stop buying the excess expensiveequipment, reduce their cost base,making them significantly moreprofitable.

So who are the winners and losers of aPull Model?Customers will win as equipmentshortages are removed.

Gym operators will win as theyhave happier customers and do thisat a lower cost, as they remove thewaste, excess kit from their gyms.

The equipment manufacturershowever will be the losers, as theywill no longer be able to push excessexpensive kit into gyms.

We anticipate the change to costmanufacturers tens of millions overthe coming years.

Rory McGown

dmen

tat

– Fo

tolia

.com