Will gym equipment showrooms pump up Hy-Vee’s supermarket sales?

Discussion
Source: Hy-Vee; Johnson Fitness & Wellness
Sep 14, 2021

Hy-Vee announced that it is partnering with Johnson Fitness & Wellness, the largest specialty fitness retailer in the U.S., to open in-store fitness equipment showrooms in select locations.

The showrooms will give customers a way to view and try a range of treadmills, elliptical machines and exercise bikes. Customers can order from the Johnson Fitness website using kiosks and QR codes. Curbside pickup will be available for most items.

The partnership, claimed to be the first in the U.S. between a grocer and a fitness equipment company, enables Hy-Vee to diversify and expand on its current health offerings. Beyond offering pharmacy services for more than 50 years, the Midwestern grocer’s locations feature in-store dietitians and HealthMarket departments emphasizing nutritional and diet-specific products.

“As part of our mission to making customers’ lives easier, healthier and happier, we are deeply invested in the health and wellness journey of our customers,” said Randy Edeker, Hy-Vee’s CEO and president.

Hy-Vee also operates a standalone, smaller HealthMarket location focused on health and fitness consumers that includes a health clinic and sports nutrition area. In 2017, it partnered to offer Orangetheory workout classes inside or adjacent to Hy-Vee stores.

The Johnson Fitness partnership comes as numerous surveys show consumers have become more health conscious during the pandemic, including committing to exercising more and healthier eating.

FMI’s third edition of its “Power of Health and Well-Being in the Food Industry” report that came out in June found 48 percent rating their primary food store as relatively high in supporting their efforts to stay healthy. That compared to 42 percent for drugstores, 35 percent for online-centric grocery providers and 31 percent for manufacturers/food processors.

Hy-Vee has also over the last few years been partnering to open in-store shops across a variety of categories to support differentiation and convenience for shoppers. These include partnerships with W Nail Bar for nail salons, DSW for footwear, Joe Fresh for fashion, Basin for beauty and Pair Eyewear for eyewear.

DISCUSSION QUESTIONS: Do fitness equipment showrooms complement the Hy-Vee shopping experience or is it a stretch? What type of add-ons to Hy-Vee’s grocery store layouts do you think would work as well or better in supporting the chain’s health positioning?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This kind of long term well rounded thinking is necessary to rebuild the in-store shopping habit and stop the erosion of profit margins with online shopping."
"I can only imagine that after six months of the program there will be dusty, broken treadmills taking up space in Hy-Vee stores — much like the treadmill in my basement."
"I’m assuming Hy-Vee will stay away from primary healthcare services so as to minimize its exposure to federal laws around HIPAA."

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12 Comments on "Will gym equipment showrooms pump up Hy-Vee’s supermarket sales?"


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Matthew Brogie
BrainTrust
9 days 8 hours ago

Putting a fitness showroom into a supermarket is definitely a risky move. If Hy-Vee was already a de facto destination for health enthusiasts it MIGHT make sense to convert this type of sale. Hy-Vee would be much better served to create a partnership with Johnson where they create “opt-in” marketing opportunities at checkout. I can only imagine that after six months of the program there will be dusty, broken treadmills taking up space in Hy-Vee stores — much like the treadmill in my basement.

Neil Saunders
BrainTrust

Supermarkets are footfall magnets so it’s not surprising that Johnson sees some benefit to locating within a Hy-Vee. From Hy-Vee’s perspective, this likely generates some incremental revenue and is an additional service for shoppers. I am sure that this helps the health positioning – but it will only move the dial if it is part of a wider effort. To be fair, Hy-Vee makes that effort with its focus on healthy foods and health services like free biometric screenings.

DeAnn Campbell
BrainTrust

I applaud this move to create a wellness ecosystem for their customers, although initially this will do more for the fitness equipment brands than for grocery sales. But this kind of long term well rounded thinking is necessary to rebuild the in-store shopping habit and stop the erosion of profit margins with online shopping.

Mark Ryski
BrainTrust

I think this is a stretch. I get that Hy-Vee is attempting to connect their health offerings with exercise equipment, but it’s such a departure from their core offering that I believe it will be difficult to execute successfully. Clearly the space required to effectively display and demonstrate exercise equipment will be important, so this will likely only work well in larger format stores. But beyond merely fitting the equipment into stores, the bigger challenges are: consumers serious about fitness equipment will likely not think of purchasing from Hy-Vee and lack of staff with fitness expertise to advise and sell the equipment. I’ll never knock a retailer for experimenting, but I just don’t see this delivering the outcomes they expect.

Jeff Weidauer
BrainTrust

Hy-Vee has been trying to be in other businesses besides grocery for several years now. The company might be better served by doing what it does well even better and not trying to be what it’s not.

Richard Hernandez
BrainTrust

I am all for testing new formats, but this will be a hard sell I believe. This is very much a niche product offering and they will have to really consider which locations would fit for this product offering. I am curious to see how this turns out.

Gary Sankary
BrainTrust

I’m not in favor of this for Hy-Vee. It’s a stretch. I don’t think it aligns well with their core business. Consumers are not very likely to see Hy-Vee as a credible resource for home exercise equipment, even with a cross branded approach. I honesty think this space in the store could be used for more relevant purposes. Maybe a classroom for food preparation, or nutrition information, products where Hy-Vee is already highly respected by customers and where they can soar with their strengths.

David Spear
BrainTrust

This is a very interesting move that could pay big dividends for Hy-Vee if executed correctly. The health and wellness ecosystem is expansive, dynamic and very tricky to traverse, given many of the federal laws around HIPAA and other associated privacy matters. I’m assuming Hy-Vee will stay away from primary healthcare services so as to minimize its exposure to federal laws around HIPAA. If so, and if it can position itself with its target audience as a trusted source for food nutrition and wellness products/services, then it could create a differentiating, more encompassing value proposition for its shoppers. Like anything, this novel partnership must have an enduring roadmap of value associated with it or shoppers will no longer hop on a bike to cycle before or after buying their groceries.

Lee Peterson
BrainTrust

Weird. I wonder what data (if any) told them to try that? Still, in this day and age of Amazon trying anything, a test is never a bad idea IMO. We shall soon see!

Ryan Rosche
BrainTrust

With the need to reinvent the physical environment apart from the online sales, it is worth the exploration for Hy-Vee to venture in different partnerships. It would be interesting to see how they make a design transition between the grocery section to the gym equipment section. It doesn’t sound too off from other retailers like Walmart Supercenters where grocery is sold alongside some general merchandise. The design solution that leads from one experience to another will be key.

Scott Norris
Guest

From a Twin Cities’ perspective, this sounds like the ghost of Sid Applebaum wandered down I-35 and possessed another retailer to build his vision of the Hypermart. Sid managed to do it in the late 1980s with several Holiday Plus locations here (imagine a Meijer, ringed on the inside by an inward-facing strip mall), but of course it couldn’t hold together.

Oliver Guy
BrainTrust

Putting large equipment in locations easy for customers to access makes a lot of sense as trying before purchasing is something highly valued by customers. Putting this in a grocery store is interesting as it offers the space to be able to show equipment off in a decent amount of space.
I have often wondered why fitness equipment makers do not exhibit in this way – or perhaps using pop-up store type approaches in malls and other environments.

wpDiscuz
Braintrust
"This kind of long term well rounded thinking is necessary to rebuild the in-store shopping habit and stop the erosion of profit margins with online shopping."
"I can only imagine that after six months of the program there will be dusty, broken treadmills taking up space in Hy-Vee stores — much like the treadmill in my basement."
"I’m assuming Hy-Vee will stay away from primary healthcare services so as to minimize its exposure to federal laws around HIPAA."

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