Life Fitness realigns distribution strategy, retail exclusivity

Distribution realignment and revamped strategy at Life Fitness means less exclusivity and more channels -- with specialty still No. 1, SNEWS was told. What does this mean and who is in and out?
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Preparing for fitness retail to recover from its slump, Life Fitness has been slowly reconfiguring its channels, retailers and exclusivity agreements as a part of a broader revamping of its distribution strategy.

The company, part of Brunswick Corp. (NYSE: BC), wants to make sure the availability of its products is not thwarted by arrangements that may not -- in these days of changing retail -- make the most sense, Brent Hutton, vice president of the consumer division, told SNEWS®. That may mean any number of strategies, including select regional mass merchants, participating in area events, doing special showcases at certain warehouse or sporting goods stores, or limiting exclusivity that once was a given in the industry.

The developments do not, Hutton stressed, mean it is turning its back on specialty fitness.

“In fact, specialty is our bread and butter,” he told SNEWS®. “But customers like options.”

Options may include Internet sales, warehouse representation, mass and sporting goods showcases or appearing at events like state fairs, he said.

“We’re just trying to step into as many different selling environments as makes sense for us,” he said. “Of course, there are certain fits.”

Broader availability of products via different channels has become an expectation by today’s consumer, who these days like to shop on the Internet, perhaps surfing for comparisons and information, before heading to a store to try out equipment.

Adding more channels “is a natural phenomenon that is taking place at retail, and now it’s happening in our industry,” Hutton said. “At fitness specialty retail, we are catching up with an evolution that has taken place across the retail universe in the last 20 years.”

Natural phenomenon grows

Hutton explained that the entry into new channels is to make sure its products are available on a more widespread basis, to allow the company to grow the brand, and to let it reach into areas where it may have been or is still under-served.

Part of the strategy began to evolve as Fitness Holdings International’s Busy Body Home Fitness and Omni Fitness retail empire began to hit the skids a few months before FHI actually declared bankruptcy in fall 2008. Click here to read an Oct. 31, 2008, SNEWS story, “Life Fitness confirms new retailers in exclusive and non-exclusive deals in FHI areas.” That retail implosion by FHI left a number of brands struggling to realign distribution since deals with FHI were for the most part exclusive -- exclusivity meant the brands suddenly were high and dry in many regions and that included Life Fitness in some areas.

In addition, Life Fitness wanted to make sure its various customer segments have shopping options that are most comfortable for them. For example, families may just be more comfortable taking the kids to a sporting goods store than a specialty shop, Hutton explained. But that doesn’t mean the sale will always happen where a customer first looks since no channel has a price advantage, he said.

“They’re all selling product,” he said. “Everybody will need to be really good at what they do, or you may get people coming in (to mass or sporting goods), kicking the tires and then going to specialty to buy.”

The reconfiguration that has and will open other channels’ doors and limit exclusivity in some areas is another step to being represented on a broader geographic basis. “We’re not everywhere, but we’d like to be everywhere we can be,” he said. “If there is not a specialty business in the area or not enough specialty for the demand, we have to look at alternative distribution channels.”

For Life Fitness, the outreach has meant several additions and changes:

>> In its newest retail addition, Life Fitness has added Abt Electronics, a 70,000-square-foot store on the outskirts of Chicago. “We feel as if we have more business in Chicago than we are getting,” Hutton explained. Abt (www.abt.com) is a 74-year-old family-owned business in Glenview that is known for high-end home electronics and other luxury home goods. Click here to see fitness equipment product at Abt

SNEWS learned the product will be displayed in a 450-square-foot mock home workout room setting decorated with Life Fitness imagery, which is in the works. To the right is a depiction of what the setup should look like.

There are no plans for any other changes at specialty fitness retail in the area, however.

>> A pilot at Dick’s Sporting Goods in the Northeast begun in late 2008 is being cut back, with no plans at this point to expand again. (Click here to see a Nov. 3, 2008, SNEWS story on the project, “Life Fitness to pilot ‘store within a store’ concept at 20 Dick's Sporting Goods.”)

The store count is being pared back to 11 and limited to areas that Hutton said the company knows are appropriate for the Life Fitness brand.

Again, no other changes will occur with the company’s specialty partners in the areas, including Precision Fitness, Fitness Showrooms and Leisure Fitness.

>> Some relationships at specialty retail are also changing. Fitness Resource, based in Virginia, will still be a dealer, Hutton said, but will not be exclusive because of the addition of Leisure Fitness. Meanwhile, Fitness Resource has added Matrix Fitness to its stable of commercial brands. 2nd Wind has also now become a non-exclusive Life Fitness dealer in some areas.

But these changes don’t mean everybody can carry the brand. “We don’t want to put people on top of each other,” he said. 

Is this a trend for the future in specialty fitness? With the development and increasing acceptance of Internet dealers to supplement brick-and-mortar retail of all types, Life Fitness representatives like to say the company is just offering more options so customers can find what they want in a place they are comfortable.

“Times have changed,” Hutton said. “The customer is more sophisticated and more informed.

“We’re not trend-setting,” he added. But we have caught up with the evolution of retail.”

--Therese Iknoian

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