Global fitness brand Reebok opened its seventh and largest FitHub concept store in New York City’s Union Square last month—snapping up a piece of prime real estate in the fitness-centric nabe that surrounds a Lululemon Athletica, a New Balance Experience store and Nike Running.
If the line that formed around the FitHub on opening day is any indicator that demand for activewear is high, then Reebok is ready to kick it into full gear. In September, a fully equipped CrossFit Box gym will open adjacent to the store creating a unique brand, shopping and fitness experience.
Since Reebok opened its first FitHub two years ago, the company has enhanced the community-minded retail concept by utilizing local resources and fitness experts to help build connections in communities, hosting in-store fitness classes, and by tailoring product to fitness needs. Sales have grown substantially, exceeding company expectations with sales increasing 50 percent year-over-year. With seven FitHubs open—five of which are located in the greater New York area—and others in Massachusetts and Georgetown, Reebok now has its eyes set for the West Coast.
Paul Froio, head of FitHubs and concept stores for Reebok, discusses the next phase of FitHubs, the importance of community and what the company has gleaned from the customer they call FitGen.
SJ: How did the FitHub concept come about?
PF: We call it a hub for the fitness community. We wanted to create an environment that embodied the physical attributes of our culture and products. We’ve had various other initiatives, but never a store that was a total fitness brand or one that provided more than just products, but also a place where customers could speak to other fitness enthusiasts and experts, attend classes and share information.
SJ: Describe the Reebok FitHub customer.
PF: We call them the FitGen consumer: male, female, 25 to 35 year old, plus. We cast a wide net. They are active, participate in fitness activities three to five times a week and do a varied amount of fitness activities.
SJ: Is this a new type of customer for Reebok?
PF: Our goal is to make a stronger connection with the FitGen consumer. We didn’t have that strong of a connection with them a few years ago as we probably have now. We want to be the first brand that someone thinks of when they think of community fitness and that’s why we host in-store classes after hours. The classes bring the community in, work out, shop and socialize.
SJ: In general, do you think this new fitness consumer expects a lot more from retailers?
PF: Well, I think we have a group of likeminded people who want to share their experiences. There’s something about that community that encourages people to talk and connect with one another, as well as with the stores and brands they shop in. They become a friend of the brand.
SJ: What steps does Reebok take to reach the FitGen consumer?
PF: Each store has its own online presence—its own website, community calendar, email and so on. Plus we promote the store as a collective brand. We’ve also taken many grassroots steps by working with fitness ambassadors.
SJ: And what do fitness ambassadors provide?
PF: They are dedicated resources, which help build relationships in the community. Each store has one. They are often fitness instructors themselves, have knowledge of the community and local businesses, and establish connections with clubs, gyms and other groups. They help drive attendance to in-store events and often determine what they might be, tailoring them to the community’s interests.
SJ: When it comes to hiring sales staff for FitHubs, which is more important, retail knowledge or interest in fitness?
PF: We hire experts in retail first and train them in second-to-none customer service, and that relates to their product knowledge. Their fitness expertise varies person by person. Some are interested in yoga and Pilates. Others are runners, but one thing that makes our brand successful is that we are building the product to fit the needs of particular activities and fitness type. We are really catering to those attributes and that is how we can enhance the customer experience.
SJ: What type of merchandise is sold in FitHubs?
PF: Our four main categories are running, training, walking and studio, which cover a variety of activities like cycling classes, dance and yoga. In apparel, our main category is training, and within that is crossfit, which is the apex of our line in regards to the highest quality and price point. Our mid-tier running line is also a strong category.
SJ: Has the concept opened any new opportunities?
PF: One of the really great attributes of the store is the opportunity to grow our apparel and accessory business. We’ve had tremendous success with our footwear over the years, and in the past we leaned 65 percent footwear. Now we are 50 percent apparel, 50 percent footwear. That tells us that the format we’re presenting to consumers is paying off. We’re giving them a different experience than in the past and allowing them to understand the benefits of our apparel, while also enhancing the brand as source for all of their fitness needs.
SJ: Are you seeing that in the men’s category and women’s?
PF: That’s across men’s and women’s. The men’s to women’s ratio is healthy in FitHubs. It is a nice balance of business and sales reflect that very well. It shows us that when our brand has the best representation, it can speak to both categories equally.
SJ: Describe the store interiors.
PF: When customers come into the store they feel fitness. Fixtures really embody the elements of a gym. A lot of the elements are molded on what a crossfit gym or studio would have and we’ve added some rugged wood materials for toughness. We’ve taken those elements and have refined them for a clean retail experience.
SJ: What kind of welcome did the Union Square FitHub receive when its doors opened last month?
PF: The opening went extremely well. The event was at full capacity; there was a line to get in. I think the community is very curious to know what our store is about. And of course, there are a lot of tourists interested in it, too.
SJ: Are there any services that are unique to the new Union Square Reebok FitHub?
PF: Shoppers can try their hand at Reebok Ink, an opportunity for people to come in and customize any product they wish. It’s been a great experiment, customers spent hours just playing around, screenprinting—and it is a free activity.
SJ: Will Reebok Ink be implemented in other FitHubs?
PF: We’re going to test it at Union Square for now. It could be, but it is in the very early stages.
SJ: The Union Square store will have full crossfit gym. Does Reebok operate it?
PF: We do not operate any of the gyms. In our pilot program, we opened two mall-based stores. The remainders are street locations. Of those, three have gyms that are managed by independent gym partners.
SJ: What’s next for Reebok FitHubs?
PF: Union Square was the final part phase one. Next we’ll move into phase two and will be opening seven more stores during the fourth quarter 2014 in California. By the end of this year, the goal is to concentrate on high-density fitness communities, to cross-pollinate with the fitness communities around us, and grow business-to-business partnerships and collaborations.