Hardly waiting for the ink to dry on the announcement of its 15 new specialty retailers, Life Fitness has unveiled a plan to try out a "store within a store" retail concept at a number of Dick's Sporting Goods stores in the Northeastern United States.
Both announcements spawned from the same event: A gap in the company's ability to reach and sell to customers in key areas after FHI, parent of Omni Fitness and Busy Body Home Fitness, stopped talking to Life Fitness. The manufacturer cut off most of the retail company's stores and, in October, FHI declared Ch. 11 bankruptcy reorganization involving all 111 of its current stores.
"This is an idea that was born from that vacuum that was created," explained Tim Wild, vice president of the consumer division at Life Fitness. "I'm constantly looking for ways to get our products to consumers.
"With this situation with FHI, I asked, 'What are our options to get our products out?'" Wild told SNEWS®.
First came quick discussions to nail down specialty stores in different parts of the country. (Click here to see an Oct. 31, 2008, SNEWS story, "Life Fitness confirms new retailers in exclusive and non-exclusive deals in former FHI areas.") Although still talking to additional retailers, Life Fitness came up with 15 new retail companies to work with, some only with a couple of stores, all of which are now on the manufacturer's website in the store locator. The end of August, SNEWS covered coming changes in Life Fitness' distribution when it was told by several retailers they were now selling the product. (Click here to read that Aug. 29 story.) At that time, Life Fitness declined comment.
But gaps still existed and Wild and his team in the consumer division brainstormed quickly and "when I scanned the horizon, Dick's Sporting Goods came up" because it was an upscale sporting goods brand with a good image and top brands.
The concept shops, called "Centro," will be about 300 square feet, will hold about seven products and will roll out in the first two weeks of November at 20 Dick's stores, including some in Massachusetts, Connecticut, New Jersey, Delaware, New Hampshire and Rhode Island. Wild said he expected those stores would also appear on the company website's store locator with the specialty retailers.
The Centro shops will have a mix of equipment to showcase balanced fitness, Wild said, including two treadmills (T3 and T5-0), two ellipticals (X1 and X5), one home gym (G5), one recumbent (R1) and one upright bike (C1). Only specialty retailers will sell the highest-end Platinum Club line.
Although the company certainly expects to sell equipment at the Dick's shop, Wild said he also expected some consumers would do some research there, that Life Fitness will create brand awareness, but some consumers may still end up at a specialty store.
"The store-within-a-store concept creates a focal point for our products in the square footage they will allow," he explained and kiosks on site will allow customers to research the equipment and other pieces perhaps not available on-site.
Life Fitness will provide training to store staff, starting Nov. 1, with an emphasis on the one person at each store who oversees the fitness area, he said. Admittedly, making sure the brand is presented as the company wants, with the kind of knowledgeable staff and trained service the company likes "presents a unique challenge," Wild said. And that's one of the reasons both sides see it as a pilot, planned at this point to run into 2009.
"This pulls all of our product together and showcases it," said Wild who stepped in to lead the consumer division in July just before the economy hit the skids and two fitness retailers declared bankruptcy. "The best time to revisit any idea is now. Now is the time to try things. We are going to focus not only on the idea but the execution."
SNEWS® View: With this move, Life Fitness has now reestablished a broader dealer network and can, we're sure its executives hope, scramble quickly to make up lost sales due to FHI's Omni and Busy Body going silent pre-bankruptcy filing. Being a public company, there must be some pressure to make up the revenues -- as fast as possible -- particularly as the holiday season is upon us and the economic news remains lackluster. We also can't argue about the potential for creating brand awareness. Although we have had both manufacturers and retailers tell us they think people know equipment brands, we think they are only talking to their own choirs. We constantly ask broader circles of non-fitness folks what the name of the equipment is that they have at home or that they work out on at the gym and nobody, without exception in years of asking, has ever been able to tell us. And the specialty retail channel is pretty under-the-radar for most consumers. It's like knowing where your town's vacuum specialty shop is. Do you know, unless you realize you need a new vacuum? Heck, do you find out even when you want to buy a vacuum? Likely not. You head to the area mass merchant and may only stumble across the specialty shop. Brand awareness and specialty channel awareness are vital and this is one step that, yes, could help. Will an appearance at Dick's take sales from specialty? Maybe. Maybe not. If prices remain comparable, someone who is willing to spend the money on a higher-end piece of equipment may opt for a specialty shop because of the personalized attention (we hope), deeper knowledge (we hope) and better overall customer service (again, we hope). As Wild said, non-exclusive arrangements will work fine if retailers have confidence not only in their own brand and service, but also in the brands they carry.
Now, let's go back to the development of fitness concept shops at Dick's. We saw this happen in a highly touted development almost exactly three years ago. In a bit of déjà-vu, Nautilus announced with much adieu this great new idea for "store within a store" arrangements in a pilot at select Dick's stores -- 25 stores with 11 SKUs. After letting the concept settle in, SNEWS sent shoppers into the stores in several parts of the country to see if the staff was indeed trained and the concept had been implemented as announced. Extreme disappointment ensued. (Click here to read that Dec. 19, 2005, SNEWS report, "Dick's massively under-delivers on highly touted Nautilus shop-in-shop.") The idea had such great potential but untrained staff, jammed footprints, tipped-over equipment and signs in disarray left our shoppers scratching their heads. We weren't sure whether to point the finger at Dick's or at Nautilus, and neither would discuss it. The concept disappeared quietly with a lot less adieu. We hope that Life Fitness can manage this well and maintain the image it needs to make the concept a benefit and not a detriment to the brand and to the industry.