LIFTS Episode 139 – The Member Has Changed. Has the Fitness Industry? | ABC Fitness Round Table

0:01Matthew Januszek:Welcome back to this week's episode of Lyfts. I'm Matthew Januszek and today I'm joined by my co-host Mohammed Iqbal for a special episode recorded live at an exclusive VIP dinner in Chicago. Brought together in partnership with ABC Fitness, the evening gave us a chance to sit down with Tony Small, co-founder of Repify, Richard Earney, National Wellness Director at Midtown Athletic, and Mason Levey, co-founder of Y7 Studio. We explore some of the biggest forces reshaping the fitness industry right now from AI, GLP ones to shifting consumer behavior, changing demographics, social media, and the growing influence of health, wellness, and longevity on the industry.

0:40Matthew Januszek:It's a wide ranging conversation about where the industry is heading, what's driving change and what leaders need to be thinking about next. So I hope you enjoy this week's episode of the Lyfts podcast. For those of you that don't know me, I'm Muhammad Iqbal. I'm the Chief Strategy Officer at ABC Fitness, and I'm joined by my host, Matthew Janusik, who will kick us off on the podcast. Thank you. Well, it's been great to get to meet everyone. We had certainly some interesting conversations at the table. I think that's a podcast in itself, actually, that we'll probably have to share at another time.

1:13Matthew Januszek:But we also, Rich and I were chatting before we started, and rather than going straight into the subject that we're here to talk about. I thought I'd pick up on Richard's, or the comment that Richard and I had, which also links into a little bit about what we talked over dinner. And so I think the first thing is that we're all involved in the thicker business and juggling a number of things from families to partners and even a lot of animals that sort of some of us are having to manage at the time. And I was just curious, I'm going to put this one to you, Richard, that when things aren't going well, And the pressure really comes on.

1:51Matthew Januszek:What do you do personally to get yourself in the right mental and physical state to lead? I was wondering what you were talking about because we spoke about a lot of things. Breath. Breath for sure. So, you know, I see this at the beginning as we took everyone through a little bit of grounding breath work. Because breath is the bridge between the body and the mind. and when we start to feel panic or overwhelm or stress and stress comes in many different forms our breath starts to shorten we start to do this so breathing into the belly, slowing things down longer exhales and that just starts to stimulate the vagus nerve which tells the brain to rest and digest and slow things down and that's what it's about is slowing things down so we can observe and learn instead of react and respond the breath, anything to do with breath yeah would you would you include sort of I guess doing some form of exercise which automatically puts you into a situation where you are breathing like going out for a walk interesting um okay so breath you can take anywhere and do it anywhere and by the way you know when I talk about breath and breath work people go oh I don't really know about that and it's funny because we breathe all the time you're breathing you know so we're doing this but movement is key okay you know when we when we move we feel better so I think whatever type of movement it is and you and I were speaking about this before it's you know it's the right dose of movement and what makes you feel good and I think we're much more aware of that these days and I think coming out of COVID that's something you know we're aware of how we feel more that I do this exercise I feel good so movement for sure okay movement just makes us feel better every time well are we going to formally kick off matthew i feel a little bit out of sync because you typically do the welcome to lifts and then we we go so okay well well that that was my opening question and this is the reason why sometimes you know this is all edited but i will now move on to the first question um which is um which is which is you know really about fitness as as the new third space and a lot of younger consumers are increasingly using fitness more than exercise and it seems as though it's becoming like a community and identity a social connection and and you know one of the things that Mo and I were talking about just just the past week is is you know are younger people simply exercising more or do you think that if we start with sort of the Gen Z, whether fitness has inherited more of a social role that people, I suppose, of my age where you would go out to bars and even nightclubs would typically do in the past.

4:31Matthew Januszek:I'm going to put this one to you. I know you're more of an expert on AI, but love to get your thoughts on this one. Yeah. I mean, I think from my perspective, I think it's somewhat generational, but I think a lot of it is that I think people are, especially young people, are just hungry for real experiences. They're just so inundated and they grew up with their phones and their screens and that's all the experience. So any opportunity to do something with people live is something that they're more inclined to do. I think in earlier generations, that was a normal thing. Almost everyone did things with people all the time and now it's kind of more unusual.

5:07So it has to be more intentional. And so if you're going to be doing fitness or exercise, might as well do it as a community with other people and stuff. I think that's where a lot of it comes from.

5:18Matthew Januszek:Have you got a view on this, Richard? Oh, for sure. Exercising brings people together in groups, moving in groups. We're more connected yet more disconnected than ever before. And so I think there's something around coming together, moving, and a lot of people here, everyone here owns group exercise type studios. So moving together in rhythm. I think younger people are seeking this out. I think older people are seeking this out too, right? So, yeah, sure. Do you see that, the replacement? Because when you look at, if you look at the statistics, you know, younger people are not drinking. The sort of entertainment industry, like bars, nightclubs and that, certainly.

6:03Matthew Januszek:Maybe there's a sort of uprising again in places like some of the, like Vegas and that. But in most places, if you look at Europe and that, it's, you know, these clubs are closing and bars are closing down. So is that the new place, would you say? Think about this, okay? Where can people go? Where can different people go to come together like this? So if you're not going to a bar, you're not going to nightclubs, maybe sporting events, maybe church. You're seeing more people are going to church now than they have for a long time and whatever, pick your religion. But where can you go to do something positive?

6:39There's fitness studios, boutique studios, health clubs. We bring people together. And so I think there's something to this. I don't think we talk about it enough, you know. But, yeah, you're bringing people together to exercise and do things that are good for you. Which really shows itself in the data as well. So what we found recently in our own report at ABC is that the Gen Z and millennials as well are joining at a much higher rate. So as a percentage of population, they're joining at a much higher rate. That's an interesting stat. The second is actually using the facilities more. So Mason, I've had a chance to experience Y7, which you were a co-founder.

7:20We've worked together as well. And I think something interesting is when I remember experiencing Y7, you were in some ways ahead of what we're seeing today. You had that younger segment of the population than only coming in, but also coming in more frequently. And he did that by, I think, having a very welcoming and opening space, but it was high energy. You focus on the experience and less on the actual format. Not that yoga wasn't fantastic, but I felt like what you applied the focus on wasn't, you weren't a yoga first studio. You were more about the community and experience. Yeah, definitely.

7:58I think, I actually think it's a little overblown. um i think we i think everyone's always like it's community and this is where you're going to hang out with friends and like all this but um at y7 at least what i was saying was and maybe it's just the cities that we're in but like people are coming to class taking class getting out like they want to get in get out get their workout in um be very efficient and sure you're in a room with other people and you're enjoying it, but I see more of the stuff that you guys are talking about here with like run clubs and these big like 500 person events.

8:35I see it in those areas, but in our studios, I'm still seeing a consumer that wants to take class, has one hour a day to work out. They want to get their sweat. I'm seeing those as priorities over kind of some of the other stuff that we're mentioning. I think if you look at Midtown, Richard, as an example, And we talked about this last week. But there's this paradox where, on one hand, you offer an incredible facility that speaks to the premium consumer. But there's still boutique tends to grow strong. And something that I've always uncovered about boutique is that people show up there with intention.

9:12They show up with purpose. They know what the other 20, 30 people are in the room for. But when they show up at Midtown, they could be doing 100 different journeys. Right? They can have their own journey. And I think that's why we've seen growth in both segments. But you've also curated boutique as well within your facilities. Yeah, for sure. And we were intentional with that. So creating boutique experiences within our facility, each with its own point of view. And, you know, I get what you're saying, by the way, Y7 was an epic experience. We've talked about this. You know, you guys really shaped that experience there of high energy and really gritty glasses.

9:50but having a point of view within your studios so people come and for that experience then somewhere that they can socialize as well you know come together and you're seeing it with these events that you just talked about in the run clubs you know yeah yeah i mean for us and the reason i said the thing that i said is just because our studios are so small and people are coming out and they're dripping sweat and then they're checking in there's a line but there's like nowhere to stay so like so what so i'm seeing it more transactional but i mean obviously they love the experience they're coming but they want to get in they want to get out they want to get a work out like i see all that is more priority than like oh this is my community and this is my you know uh obviously that's important but i think the getting the workout in is more important

10:32Matthew Januszek:we um couldn't have a podcast without talking about a couple of things ai and glp ones and um i'll kick off with glp ones because i think originally when it came out you know this was the an amazing uh drug for people that were obese to to get them you know back in control um and and definitely started off as this medical product. But increasingly, certainly the part of the world I live in, it's something that the affluent are investing in significantly. Whether they need it or not, it's something that you get on along with a group of other potential peptides to sort of slim you down, build your muscles, lean you out, give you more energy, repair any little sort of aches and pains that you've got.

11:15Matthew Januszek:And along with that, you know, it's got, you know, people having their blood tests, you know, investing in the latest recovery therapy. And, you know, just wondering that it seems as though there's this sort of affluent consumer that seems to be buying into health in the same way that maybe previous generations would buy a brand new, you know, flash sports car or a handbag. And so I think, Richard, you probably have, you represent Midtown, which is a very high-end brand in Chicago. And I just wonder what your view is in terms of this fitness or this wellness almost becoming a new status symbol that people are getting involved with less about losing weight and more about what it says about who they are and what their mindset is.

12:04So layered questions. We went from GLP-1 to multiple things there. But I think the thing, can we start on GLP-1s? Yeah, so GLP-1s, I mean, they were created for the right reasons. But what are they used as now? It's like a quick fix in many ways. Where the issue becomes is where people are using GLP-1s, but they're not exercising as well, so they haven't had the lifestyle change that goes with it. So maybe they're losing the body fat, but then they've lost muscle and they're not getting the good feelings that come with it, right, of creating lasting change. That's a concern. you know so I think that's something we need to address and I see some clubs and we're not doing this and we probably won't do this but some clubs are leaning into that you know and how do they you know build out programs to support that I'm just curious so why would you not lean into that because I think as a society not just in the US but internationally not just GLP-1s but peptides in general there is a legal pathway towards that now peptides like BCP157 are becoming more widely used I can tell you in my neighborhood where I live in Arlington, Virginia the positive on GLP-1 and peptides is that in the summertime now, all the families are out they're all active, they're all moving all the kids are playing, I mean it's had a positive effect on the community because people feel better about themselves people are feeling healthier and I think as an industry and I'd love to push back a little bit on this but don't you think that we look when I came into industry back in 2012 the reason I came into this industry is because we had a sort of elitism to ourselves.

13:39If you did an Ironman I was a member of Equinox. There was this elitism to joining an industry. We made even think about SoulCycle. When I first started working with SoulCycle we didn't even teach people how to clip in. We didn't tell people what the front row was about. Right? And then we started educating people about it. So the first time you came we suggested you sit in the third row. We would walk you through how to clip in. So I think removing the elitism and opening up more doors always seems to be a good thing. And if that made people feel better about themselves, which then brought them into a Midtown, why would a Midtown then say, well, we want to really invest in GLP-1 education.

14:19We want to even offer recommendations to our consumer about it. Because are they not better at coming to you as a trusted source than going elsewhere? Yeah, I'd say that's another loaded question. Mo, we're just not there yet, you know? And what do we want to go after first? Because there's gaps in our industry. So look at our personal training certifications. How much information or education is in there on GLP-1s? Do you know what I mean? It's coming, but almost nothing right now. But NASA is working on courses like that now, but it's still very early. Yeah, yeah. So, you know, for us in Midtown, we're very intentional.

14:57You know, we don't just rush into something and we sort of think it through. And we've spent the last year, so the role I'm in now as the head of wellness is, it's only been around a year. I was in other roles before that. But devising or thinking through what our point of view is of what it is and what it is not. So, okay, wellness. And we spoke a bit about stuff there. It's such a big umbrella. Everywhere from Botox and injectables and IVs all the way through to crystals and singing bowls and, you know, and movement and nutrition and everything fits in there. So, who are we? What do we want to do?

15:29And we go through that process of what is our point of view. And that's what we're doing now. So we're starting to really build that out. And then strategy and tactics to make that happen. Let me flip it. And Tony, I want to point this question to you. So, Juan, welcome to the ABC family. Thank you. Happy to be here. I remember when you and I first met over a year and a half ago, we talked about this. It was at a conference. Your company was called Hey Libby. That's right. And you pulled me aside and said, hey Mo, I want to show you something interesting. And I was wowed by what you had. and you've progressed so far since then.

16:01So one, congratulations. And for the audience here, we acquired Replify going on about three weeks. Yep, about two and a half weeks. So it's pretty new. You're counting the days. You're counting the days. I know, I had a calendar on my board. We're counting the days. And we are incredibly excited to have you on. But the reason I'm tying the two together with GLP-1 and AI is because those are two transformational forces that have happened to our economy and society post-pandemic, right? those two things. And I get this question a lot, similar question, which is interesting, is how should a gym be using AI?

16:35Should they be AI curious? Should they be diving all into AI? And it's a similar conversation to GLP. So Tony, I'd love to get your perspective. You've implemented Replify into our ecosystem and others, right? Not just ABC. How have you managed that for operators who are thinking about implementing AI, but not sure what to do? Yeah, I mean, I think it's interesting because I think the thread that weaves those two topics together, which you wouldn't think there would be a thread like GLP ones and AI, is really like about social proof. So like on GLP ones, if you think about it, if you have the perspective and you think this is good for people, this is good for my members, I would think that it's probably the value you can do as a gym of having that service in your gym can be really impactful because of social proof.

17:23Because people are so busy, there's so many competing narratives out there. There's so many. If they're on TikTok, if they had any interest in GLP1s, they'd probably see a bunch of TikToks that are pro and for or against, and they don't really know who to believe. At the same time, if they're Jim, who they know and they trust, and now they've been a member for five, seven, 10 years, if they're now offering that service, that can be just a really big game changer for them. That could be the thing that moves them over that line to say, if Jim XYZ is supporting this, maybe it's time for me to give it a try.

17:55The related thing on AI is that AI is similarly very complicated, very fast moving, very evolving fast. And so it's very helpful for gyms and studios to know other gyms and studios that have used it, had benefited from it, have seen very high ROI. And so that social proof, it just goes a long way. And it's just partly a byproduct of just there's just information overload so how do you know what works how do you know what doesn't and you're really looking for someone you trust to sort of like help inform

18:27Matthew Januszek:you of that just just going back to my first question and i'll probably put it in another way like it you know glp ones um obviously you don't go to a gym in many cases to specifically take them and and what what we're seeing is this growing um you know this growing wallet for people that want to invest in health fitness or wellness whatever you whatever you would call it the natural place you'd have historically gone is a gym or some kind of fitness studio. But now for a lot of people, it's not the first place they think of if they want to get in shape and show off and, you know, have this sort of health status symbol.

19:02Matthew Januszek:So I guess another way of probably putting it is, you know, how do we, with some of the things you're working about on, some of the things you're aware of and even places like yourself, you know, how do we, as a, I guess, a fitness first industry, get more of that share of the wallet and get people that probably wouldn't even consider going into the gym to achieve that, to think about, you know, gyms are an important place or studios are an important place to go. Anyone want to take that? I mean, we, Sarah and I do not own Y7 anymore. We sold it, but if we still owned it, we would probably not sell GLP ones just because, just not what we're good at.

19:41It's not our core competency. We're not going to sell and support and give people medical advice. It's just so far from our core competencies. But that doesn't mean that we wouldn't support. I think we'd be huge advocates of people who are on it. Like Y7 was a place for everyone. It's a dark room. There's no mirrors. Like we want you to be competent, you know, like for all people. So we definitely support it. But yeah, and then it's probably, I don't know. I like to think about these businesses like either bundling or unbundling. So Y7, like we unbundled everything. we just focused on one thing like an amazing uh music driven yoga class that was like very unique but if you think about some a lot of the places that i'm seeing even around austin where i live that are popping up they're bundling everything so i think in that situation it could make a lot of sense where you're going to the gym but your gym also has a medical facility the medical facility can pull your blood work you can also then go to pilates you also have like you know individual services like chiropractic like in that scenario where you're bundling i think it makes a lot of sense but i think in in our case it wouldn't make a lot of sense for us to sell glp one is a consumer today expecting to walk into a y7 or midtown and this is where i push back a bit on on your um comment richard but but do you think they're expecting that or do you think they're still viewing this the the service i'm going to a gym for my fitness i'm going to my y7 for my yoga.

21:04So are they viewing this more as specific retail locations for the purpose or are they going to Midtown for their overall health? Maybe Richard, I'll... Yeah, I don't think there's an expectation to go there for medical, you know, advice yet. And we're not set up for that. I think, as you said, you know, because the expertise isn't there. Our coaches don't know what to do with that. You have a whole panel of bloods and all these readings and whatever it is, you know, give it to your coach. What are you going to do? Your personal trainer, What are they going to do with it? I could help with that.

21:34So this is not a plug for ABC by any means. But what I will say is software is evolving. And as an example to that specific use case on blood panels, so we should get you on ABC, is that on our trainerized platform, we have now developed the ability for a coach to read that. We're saying it's not health certified, but if you were to come in with blood panels and you went to your annual physical with your doctor, you're able to do that. We're seeing that, Richard, also going to consumer products. I have an ultra-human ring on. Matthew has an aura ring on. Both products can upload and support blood work as well.

22:09So again, these are not medical-grade devices, but I think that there's a shift that happened probably post-pandemic, pull forward that. There's an inherent either distrust, number one, lack of access, or frequency in which a consumer actually interacts with a healthcare provider, which might only be once a year, but they're coming to your doors, probably four or five times a week. And I think there's a trust that they build with that practitioner, right? So that's why I proposed a question to you to say that, okay, how do we equip them? Maybe it is certifications, maybe it's more training, but I'm just kind of curious, like, you know, that trust and community is still in our industry, not without them.

22:52Yeah, I also think there's a move away from over-optimization. There's a shift away from this, you know, and there's this overwhelm of, you know, your aura watch checking it every morning and my sleep stats say I didn't sleep well but I feel good so suddenly I don't, you know. And we know what it is. Everyone here is trying to get people to come through their doors another time, right? You know, your next first visit is what we like to say. You know, every visit is your next first visit. So getting people to come back one more time, that isn't always going to be around what, you know, your health-related data but the experiences that we create and creating this awareness through, I don't know, this, we're looking, we're taking a more of a holistic view of things, okay?

23:36And I think you and I were talking about this and so you and I'm around sort of nervous system regulation, you know, and we talk about recovery, okay? So our industry often, you know, we take a view of something and it's not quite complete. So our industry has taken recovery as recovery from exercise, right? And so You've got all this tools and toys out there. But, you know, you're a super exerciser, and I think you are as well, Mo, but most people are not, right? So do they really need to be recovering from exercise? What about recovery from life, from stress, from overwhelm, from anxiety? We're so, you know, we're so connected all the time.

24:16It's hard to switch off. So I think there's something around this. And so we're really leaning into that's what wellness is to us. You know, nervous system regulation and resilience there in that space.

24:28Matthew Januszek:It almost seems as though in some cases, I know we've got a number of different businesses with different products, including on the stage here. But do you somehow think it's almost like a rebranding of the industry that many of us were involved in for a while? Because historically it has been about weight loss, get fit quick. It seems to be maturing. there's other you know if you look at some of the optimization the podcast the Gary Breckers that are giving you all these sort of amazing sexy facts and figures where you're like wow I need to be doing all this and drinking this whereas the the traditional gym studio business has been around there it's probably super effective at doing this but you know where's the sort of catchy trend or the buzzwords that people are getting involved in and I in some ways I just feel that some of the new things that are not that new have marketed themselves very, very well.

25:23Matthew Januszek:And, you know, what you're talking about wouldn't historically be the place I'd think about, you know, going to the gym for. I mean, our industry forever has talked about, you know, how you look as opposed to how you feel. Okay. I mean, we know this, most of the studies done in our industry were done on men until, what, 20 years ago? Yeah. Right? Not done on women. Almost 80 % of the research has been done on men. Yeah. And even the mice were male mice. So this is another example. And so that's our traditional training programs have all been based on training men. Now, what about women and, you know, menopause and perimenopause and hormones and stuff like that?

26:02So, you know, you may join a gym to lose 10 pounds, right? And it never happens. It may not happen. You may be training, doing all the right things in the gym, but you go home, you're stressed out, you drink too much, you know, I hate my job, I'm not sleeping, hormonal, you know, it may not happen. But I know that every time I exercise and finish, like I leave the gym, I feel better than when I walked in. And that's a stickier emotion. And I think we need to do a better job of anchoring and to help people feel after they exercise, after they move, after they connect in community, after they do a class.

26:43So I guess one question, Tony, I want to move to you is, do you think that given what Richard just said, that there is a shift happening in the industry around one, how people are coming in top of the funnel? So the questions that you're seeing on your chatbots, on the voice agents and so on, are people asking different questions? And then do you tailor the responses towards the things Richard was talking about? Because if the priorities, and I agree with you, Richard, are shifting away from fitness, I think that there is an over-indexing on too much data. As you think about operators who have to train front desk staffs or salespeople, now that's shifting towards AI, how does that work?

27:24Walk us through how an AI chatbot could help identify these shifts. Yeah, I mean, so it is, from our perspective, it's less about shifts because we don't have the vast historical data. But the interesting thing is the experience that you're providing and the services that you're providing are increasingly getting more complex. like even if you're not offering GLP-1s, like if you're considering doing that or if you're offering different services or different activities, it's probably unlikely that you would be able to train your front desk staff, which might be transitional or might be there for a few months or might be promoted to something else, to know everything about everything at any moment, 24 hours a day, seven days a week.

28:10So a lot of the service that these technologies can provide is really just alleviating your front desk staff so they can really be focused on these in-person experiences, which are so important. And that's why people go to the gym. They don't go to the gym so they can talk to a computer or talk to a chatbot. They go to a gym so they can have a great personal, physical, sometimes community experience. So that's really what we see and that's really a lot of the value that we give. But just the interesting thing is like we have hundreds of clients, you know, over a thousand locations and there's so many different questions.