SIBEC 2019 Recap: Big Trends Coming Your Way
There are a lot of reasons to give the experience of this year’s SIBEC North America conference at Miami’s Turnberry Resort an enormous industry thumbs up. And I’m not just talking about excellent industry learnings or a valid reason to get out of the late September chill of Minnesota. Our team took three days to network with leading club operators, managers and leaders of the fitness industry and returned with key insights that can help shape all of our businesses going forward. We also got a chance to listen to Bryan O’Rourke, keynote speaker, global fitness expert and tech consultant, whose insights are included here.
Fitness Industry Growing
We’ve seen massive growth in fitness and it’s continuing, but the landscape is evolving in some interesting ways. The biggest growth is at either end of the spectrum of operators. Luxury brands like Orange Theory and Equinox have seen rapid growth, but so too have low or no frills clubs including Blink and Planet Fitness. Growth is being fueled by clubs and brands really understanding their customers in both cases: knowing their needs and building personalized experiences that cater to them. Equinox, interestingly, is expanding vertically and opening new category business, with a hotel complete with a custom wellness facility.
Investment and Confusion
Industry potential is so good, mainstream brands are also looking for a way in and there’s a lot of movements and deal making underway. Under Armor just invested more than $710 Million in fitness apps, but as yet is struggling to make any headway and just saw their CEO step down. Elsewhere there’s analyst confusion: Peloton was recently valued at $10 Billion, but that implies a far greater market penetration than they actually have. To earn this valuation, 40 percent of every household with income over $100,000 annually would own a Peloton and the bikes would account for 60 percent of all gym equipment sales. With just 1.4 Million subscribers that’s just not the case.
Cross Generational Programs and Facilities Key to Success
It’s easy to assume that the biggest growth demographic for clubs is millennials and soon Generation Z. But Boomers are more active than ever and have massive spending power in their later years. Estimates put their wealth at 12 times that of Millennials, topping out at $26 trillion by 2029. Clubs that cater to cross generational membership mindsets and needs will be best placed to succeed by offering services, facilities and class programming that incorporates boomer-friendly wellness, meditation, strength maintenance and flexibility.
Technology and Personalized Human Experience
With coming 5G networks, the Internet of things and hyper connected networks will be everywhere before we know it. It’s why the world’s biggest tech brands including Google, Amazon, Facebook, Apple and even BestBuy are investing in fitness technologies and acquisitions. But fitness will become part of the much larger, $4.2 Trillion wellness marketplace and part of a universe that includes wellness tourism, personalized medicine and care, fitness and nutrition, complementary healthcare and the spa economy.
Technology will fuel integration and we will soon see the most successful business models, offering a completely integrated wellbeing experience to consumers, where they can access content, programming, services and help across every device in an always-on, omni-channel world. With all of this comes a greater need for personalization, for human connection: one on one coaching, specialist skills teaching and anything that helps members stay grounded in the new tech driven wellness landscape.
Fascinating and inspiring stuff.
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