First the bad news:
There is no question that we are at the cusp of an economic downturn. As the world comes out of what was arguably the largest shared crisis since World War 2, we’re entering the next one almost immediately. War, supply chain issues, rising energy costs, and counter-globalisation forces all contribute to what can be one of the biggest economic downturns yet. What it looks like is still under debate, whether it’s inflation, recession, or both – stagflation. How long it will last is also unclear. But what is clear is that the fear and perception of a slower economy drive consumer behaviour.
In fact, most people aren’t very well informed about monetary policy and the real rates of inflation, they don’t have to be.
When the economy slows, expectations of disposable income are tapered. Folks look at their household basket and separate the necessities from the luxuries. Of course, how they do that depends on many factors such as household income, attitudes, socio-economic status, and more. However, we can by and large imagine which products and services will move into which categories across different economic classes.
The good news for gyms
This is where the good news comes in for the fitness industry. Latest research from Empathy and Vividata suggests that the pandemic has caused fitness to become a necessity for most folks. The majority of respondents (53%) say the pandemic has increased their desire to spend money/time on physical fitness. Notably, it is more true for those who have identified themselves as being financially precarious (66% vs. 47% of those who say they are comfortable in their finances).
What it takes to survive the next crisis
As much as fitness has become an essential part of everyone’s life, the choices for keeping fit have never been greater. At home programs and equipment at various investment levels now directly compete with gym memberships. Some have already invested in a home gym and gotten comfortable, never wanting to return to a crowded fitness centre.
In order to cater to their clientele needs, gyms must first understand their motivations. People seek fitness for three primary reasons: Physical, Emotional, and Social.
Understanding how your customers are motivated is of utmost importance. For example, our research shows that, people who feel unsecure about their finances – especially as the economy turns around – indicate fulfilling their emotional needs as the top priority to be fit (31% vs. 17%). Conversely folks who feel secure about their finances prioritize physical reasons to get to the gym (64% vs. 48%).
So gyms targeting a wealthier clientele would do better to empathize how fitness improves your physique. Conversely gyms looking to be financially accessible can empathize with stress and sleep management benefits of fitness.
How to survive the competition
Lastly, the issue of competing with home-gyms is at the top of the to-do list. Once again, our research suggests that there hasn’t been a gold rush towards home-gym purchases. Investment in health/fitness equipment among Canadians rose only 5 points (from 25% to 30%). But people have different motivations to leave the house and go to the gym depending on their circumstances. For example, most of the people seeking a new partner feel that gyms are better motivators to work-out vs. home gyms. While most of those who are worried about their finances just want to get out of the house – they welcome the distraction.
While the economic downturn around corner is yet another threat to the fitness industry, the key to survival is a deep understanding of who your customers are and what motivates them to visit your facilities.
For more information about Empathy’s research, please visit empathyinc.ca.