Inside Crunch Fitness' Retail Transformation
Cycling while belting out karaoke. Feeling the burn while bouncing around in spring-based low-impact boots. From pole dancing like a pro to flying through the air with the greatest of ease, workouts at Crunch Fitness range from the average to the ambitious to the exotically imaginative. The New York City-based chain of fitness clubs includes more than 145 Crunch Fitness locations nationwide plus 32 premium Crunch Signature facilities featuring yoga and spin studios, live DJs, child care and more.
To enhance the all-around fitness experience, Crunch sells apparel including men's shorts and women's sports bras — among its bestsellers — as well as high-growth products such as women's capris and crop tops, a direct result of the athleisure trend, says vice president of member services Mike Neff. "Crunch apparel had always been primarily branded pieces but we've seen a need for performance gear and athleisure, so we've brought in brands like Under Armour and Onzie," he adds.
The company's business model deviates from the usual retail norm. "Our primary business is running health clubs so our managers are not true retailers," Neff explains. "Our true retailers live in our corporate headquarters and have the knowledge to run this area of our business." Recently, Crunch needed to upgrade its retail platform for three primary reasons: payment security, cloud convenience and customer data. With the Jan. 15, 2017 SHA-2 security compliance deadline looming, Crunch had to act quickly or suffer the consequences. "Our prior applications were not going to update their platform to meet these standards, which then put our credit card processing at risk," Neff points out. "PCI compliance has gotten really strict these days and as a level 2 merchant, we need to prove our platforms are secure every quarter."
The next obstacle? Struggling to maintain hosted applications. Self hosting always sounds great in the beginning, says Neff, but ends up costing you more in the end. "The days of hosting your own applications and taking up real estate in large data centers with expensive servers are over for most small and mid-size companies," he explains, adding that cloud technology's dramatically decreasing cost makes it a "no brainer."
And last but not least, Crunch was missing out on valuable insights into customers' buying habits. "We were only capturing half of the sales journey of our members," Neff says. "We could tell how much a member purchased for a membership or personal training, but not necessarily that they bought water and a nutrition bar every day they worked out."
To address all of these issues, Crunch deployed Cegid's Yourcegid Retail Y2 platform, particularly enticed by the system's purchase order creation and management process.
"It was important to have a system tell us when and what we should be ordering and how often," says Neff, adding that previously Crunch relied on its stores to tell headquarters which merchandise was needed.
Yourcegid Retail Y2 has enabled the fitness chain to tighten margins and manage store inventory through a central cloud-based system instead mof relying on manual POs submitted by stores.
And because the platform captures the entire journey of the Crunch customer, the company now has the data it needs to develop compelling loyalty programs to increase customer spend.
But the move to the cloud has been perhaps the most transformative aspect of the deployment. Instead of relying on two disparate retail systems, now Crunch has just one. One of its old systems ran locally on a single computer at individual club locations and on a "few occasions" the entire database was lost when the computer got corrupted.
Says Neff, "Moving to cloud allowed us to save thousands per year in data center costs related to hosting our own application as well as the peace of mind in knowing all is being backed up."