The fitness, health club, and gym industry will change more in the next decade than it has over the past 60 years. Driving these rapid changes are macro-trends that influence the way the world creates, distributes, buys, sells, and consumes health and fitness products and services. The Ultimate Guide to Health Club Management includes addressing and adapting to the new trends, realities and challenges the disruptive health club industry and operators will need to consider in their overall strategic planning.
Overall growth in the health club industry will continue for the foreseeable future. Consumers will continue to seek ways to improve their health via primary prevention, including regular exercise, improved nutrition, and stress management to counteract escalating obesity, inactivity, unhealthy aging, and preventable diseases. Advances in technology and open access to capital will continue to fuel an explosion of business model innovation. New competitors will redefine consumer expectations around experiences, offer uniquely different value propositions, and rapidly disrupt the global fitness landscape.
These are challenges that offer exciting opportunities for consumers and competitors who will figure out how to meet the emerging demand for fitness, health, and lifestyle experiences with new combinations and creations of services and products. The rise of the use of technologies along with data, Artificial Intelligence (AI), as well as new scientific discoveries and innovations, will offer solutions to many challenges fitness, health club, and gyms face today and will face in the future. The promise of growing markets will lead to tremendous investment in new commercial fitness, health club, gym, health brands and business models and will improve the ways consumers can personalize how they take care of their health and fitness.
These changes are being driven by a host of dynamics, including mega-trends, but the main areas will encompass these three things :
The battle for fitness consumers is not new. What is new is the pace and number of disruptors that have emerged. Consumers are more rapidly adopting a plethora of new platforms, brands, and fitness gym, health clubs, and business models and experiences available to them, from subscription services to studio experiences and more. These new models are being introduced and expanded at such a rapid pace that in a decade we expect the market to look nothing like it does today.
How did the gym industry arrive at this point? Traditional gyms reigned supreme for many years. They still hold a significant portion of the US market although the battle over retaining members remains. With large, loyal customer bases, many brands still enjoy solid cash flow and a foundation from which to innovate. However, budget models, digital providers, and new studio platform businesses are testing their competitive strength, wooing consumers with lower prices and incredible new experiences. Most growth in demand over the past ten years has come from boutique niche concepts and budget gyms. As large brands displace smaller chains by leveraging scale, these same businesses are now threatened by digital platforms that are built for innovation, speed, and customer experience design. They are designed to disrupt along with all parts of the experience with unique offerings that solve for friction in the consumer’s journey. In other words, they are improving on things we “love” in our fitness experiences and fixing the elements we “hate”.
To fitness, health club, and gym operators, pressure from competitors is nothing new with new formats and upstart brands having challenged fitness business operators for decades. Unlike more easily disrupted single-category retail models like books and shoes, that succumbed to prior e-commerce trends, multi-category fitness operators have been protected somewhat from true disruption by a combination of factors including the social aspects of the health club business and less rapid advancements in alternative offerings. But, several emerging trends, along with the advent of digital technologies, are and will impact that dynamic.
Many things are happening in the fitness, health clubs, and gyms space that reflect the tsunami of change underway and foretell the new future we will see.
The future for the fitness industry marketplace will be a lot about growth in the decade ahead and will offer limitless options and painless convenience. This future caters to consumer desires and is fueled by technology that vastly expands choices in every way but operates silently in the background. For example, personal assistant services will more often recommend and make fitness recommendations and choices for us. AI bots will work together, sharing vast quantities of data to optimize experiences, handle customer interactions, drive recommendations, and more. The consumer experience, as a result, will become increasingly seamless and painless. With millions of dollars invested and hundreds of startup companies all racing to solve for things we love and hate in the customer journey today, the future marketplace will feel very different. Expect a complex set of interconnected platforms to emerge allowing for a combination of services and experiences that have not been available to many previously. Connecting our fitness habits to our medical well-being through doctor-prescribed diets and physical health routines will become more mainstream. Technology will help us choose personalized “healthy for me” options and make them easily available.
With a plethora of new fitness and health business models, the fitness marketplace has truly changed already. Expect the pace and number of changes to grow as companies experiment to find their place in the new ecosystem designed to satisfy consumer demands. So what should health clubs, gyms, and fitness brands do in anticipation of this?
1. Develop A Strategy
It is more important than ever that health club and gym brands have a clear business and differentiation strategy. The truth is that the vast majority of brands do not. In their book The Balanced Scorecard, authors David Norton and Robert Kaplan noted that 90 percent of organizations that do have a strategy fail to execute their strategies successfully. When it comes to digital strategy execution, as this McKinsey report reflects, failure rates are just as bad. Want to develop a strategy? Use this one page strategic plan process.
2. Innovate With New Business Models And Services Around Your Strategy
If you think strategy is a challenge, innovation is not easy either. How can you repeatedly implement great new products, processes or services? Continuous innovation is not easy and if you keep using the same method you will experience diminishing results. Here are 21 great ideas on how to innovate.
3. Embrace Trustworthy Strategic Partners To Guide And Advise You
Choosing the right vendor partner for technology, billing, and collection services, among other aspects of your fitness business, can have a big impact on the success and growth of your company. Considering partner and vendor relationships is more than just making a “wise choice”. You must know the differences between them and use them in the right manner and at the right stage of your business lifecycle. This is not often an easy thing to do but it is so important. Here are some things to keep in mind as you evaluate your selection of key vendor partners. Learn more here.
4. Focus On Being “Frictionless”
Successful gyms and health club brands will start every strategic discussion with the customer journey and work backward to design the required changes to make the experience as easy and frictionless as possible. They will create differentiated experiences by tirelessly removing customer pain in both physical and digital environments with a combination of services and new in-store experiences.
5. Embrace Digital While Leveraging The Human Touch
With pressure mounting on commoditized categories, digital and physical transformation including automating key operations and functions will be essential to the fitness, health club, and gym marketplace. Operators will need to rely on partnerships and develop platforms that enable multi-sided networks, collaboration, and integrated services to capture revenue outside traditional categories. These platforms will need to prototype and deliver new technology, business processes, and ultimately greater customer experiences fast. More than embracing the digital however, the biggest winners in the space will be those who use technology to leverage their brand’s “humanology”.
So what do you think about the changing marketplace and new realities for health clubs, gyms, and fitness businesses? I’d love to hear your views. Our partners and the team at ABC Financial are working very hard to help fitness, health club, and gym businesses compete in the growing and changing marketplace. Contact us at ABC Financial if we can assist in enhancing your health club, gym, or fitness business with our technology solutions and insights.
Kelly Card is the Senior Vice President of Partner Relations at ABC Financial. Check out her Fitness Industry Innovation Podcast where she interviews leaders from across the health, fitness, and wellbeing landscape. Kelly serves on the Board of Directors of the Fitness Industry Technology Council and is the Co-Founder of Industry FIT. She has over twenty years of experience in health club, gym, and fitness operations and co-founded and was President of Club-Apps, which was acquired by Netpulse in 2014. You can reach her kelly.Card@abcfinancial.com and follow @theKellyCard on Facebook & Twitter. Connect with and follow @IndustryFit for the latest in fitness trends and technology as well.