In various retail sectors, proximity to competitors is a key strategic imperative. Drug stores, electronics chains, and restaurants have long realized the potential benefits of locating nearby their competitors, as a means to establish a certain intersection or neighborhood as the place people should visit when they are in need of those offerings. Taking on new life, this trend also is spreading to exercise studios, which are combining their offerings to develop and present “fitness clusters” that allow consumers to visit several options and try various alternatives, all within a small physical area.
These developments are effectively supported by parallel trends by which conventional shopping centers and malls are being deserted by their previous clientele. A mall operator thus might work to attract a spin cycle provider, a Pilates studio, and a yoga group to rent space; it also might entice related providers, like sauna spas, healthy food and beverage purveyors, or athletic clothing stores, to join the “neighborhood.” In this way, the mall operator gets active tenants in its stores, which attract clientele who are ready to spend money to obtain appealing experiences, as are issued by group fitness providers.
The consumers benefit from such clustering because they gain an easy means to try out various exercise and class options. Similar to a food court, they might try one exercise “cuisine,” such as a boot camp class one day, then switch to another “flavor,” like a hot yoga class the next.
In some cases, the operators of the fitness clubs work to facilitate this experimentation. Some franchises now maintain multiple group fitness brands, then offer consumers the option to buy a comprehensive pass that allows them to visit each of the options, according to their preference that day. For example, a firm called Equinox, which defines itself as a luxury fitness brand, owns the subbrands SoulCycle, Pure Yoga, Precision Run, and an eponymous Equinox fitness club. The all-access pass to all of these options runs about $260 per month.
Another brand, Xponential Fitness, seeks out underperforming small studios and offers to make them part of its franchised operations. Noting that many operators in this market are better at fitness than at finance, it recommends that a Pilates studio become a Club Pilates franchise, a rowing gym become a Row House franchise, and so forth. Then the company helps them with lease questions and location decisions, including encouraging many of them to look at abandoned Radio Shack stores as appropriately sized, often inexpensive options for installing their practices.
In other cases though, it is independent companies flocking together. One operator, with about two dozen Pilates-inspired studios, explicitly looks for locations near other high-end fitness studios. The walk-by traffic, she notes, consists of people who already are accustomed and willing to pay about $40 for an hour-long fitness class, which is precisely her target market.
The fitness clusters thus continue to expand, bringing in new customers, as well as service providers. Cryotherapy, stretching studios, and float therapy providers are starting to recognize the appeal as well, because these relatively novel services seek to help modern exercisers overcome the strains they put on their body by attending multiple fitness classes every week. The trend even could take the food court metaphor further, in that sellers of clean juices, coconut water, and other health-oriented specialty offerings likely will be seeking space within these fitness clusters soon.

Discussion Question:

1. Why are malls leasing to non-traditional fitness providers?
2. Why are fitness service retailers leasing in non-traditional locations?

Source: Katherine Rosman, The New York Times, June 17, 2019