During undergrad (2010), I had this idea to create virtual GYMs where people can work out from home with their friends as a social event and workout sessions with a personal trainer. In short, recreated the GYM at home with little to no equipment. Fellow students and instructors encouraged me to pursue this idea, build it out and make something out of it. Not so motivated or believing much in the idea, I skimped out. A few years later realizing that at the same time in 2010, two Standford grad students were pursuing this same endeavor and by 2012 they had raised more than $1 million in funding and were in acquisition talks with weight watchers. Regret sunk in. Anyways, here’s my opportunity analysis on the fitness industry.
This analysis will examine opportunities in the fitness industry, with a specific focus on virtualized, social and live exercise experiences for women. Consumers of this service are looking for an at-home workout program that fits into their lives. Women have a smaller interest in weight training over men, which is why this virtualized workout organization is tailored towards women (no equipment needed). The service will provide live workout sessions with 1 instructor, which will guide and adapt to session attendees. Each session will allow up to 5 participants to create a social experience, for example, friends who want to work out together. Cameras and real-time feeds will enrich the workout experience for participants.
- As of 2013, in the United States female population of 25–39 years of age between was 30,739,000 (census.gov).
- 64% of women over 20 years of age are overweight (niddk.nih.gov).
- 54 million Americans paid gym membership fees in 2014 (franchisehelp.com).
- 50% of people who begin structured exercise programs (gyms) drop out within 6 months (Mullen, Whaley, p. 1).
- A study of 1,000 women found that 64% of those who run, attend a gym or group exercise classes with friends will push themselves harder than if they went alone. (dailymail.co.uk)
- Qualities Important in Fitness Activity. Factors: 1 – 5 rating (survey of 233 participants)
- Convenience & Staffing – Mean: 4.29. Standard Deviation: 0.67
- Time Related – Mean: 4.14. Standard Deviation: 0.79
- Extra Amenities – Mean: 3.08. Standard Deviation: 0.90 (Mullen, Whaley, p. 29)
Social: Today, fitness is very popular. One out of five Americans has a gym membership (dailymail.co.uk). Moreover, people don’t like to exercise alone, which is why an online service that brings the social experience of exercise to their homes is desired. According to Virgin Active Health Clubs research, people perform better when they are with friends versus alone. Customers are mainly looking for convenience and time-related qualities in gyms. Many people are very busy and can’t always make it out to the gym. Our services will allow customers to make their own workout schedule and all from the convenience of their own home, with the ability to work out with friends that are five blocks apart or even thousand miles away.
Health: With obese and overweight population level at its highest of all times, people are looking for ways to get back into shape. With more than two-thirds of the population considered overweight or obese, there is no doubt that American’s health has never been worse. Overweight refers to an excess amount of body weight that may come from muscles, bone, fat, and water with BMI higher than 25 but less than 29.9. Obesity refers to an excess amount of body fat with BMI over 30, with extreme obesity starting at BMI 40. Both being overweight or obese can cause serious risk – type 2 diabetes, heart disease, high blood pressure, and much more.
- Gym memberships have grown 18.6% between 2008 and 2014. (franchisehelp.com)
- There’s 34,000 fitness centers in America with an increase of 6.4% over 2013. (franchisehelp.com)
- 2014 fitness centers’ revenue of $24.2 billion also had a sharp 7.4% increase over $22.4 billion in 2013. (franchisehelp.com)
- According to the Bureau of Labor Statistics, these fitness and recreational sports centers employed 533,200 people in 2014, and jobs are expected to grow 8% by 2024. (franchisehelp.com)
- The average monthly cost of a gym membership is $58
Competition: The fitness industry is fierce. From local gyms like 24 Hour Fitness, Planet Fitness, Gold’s GYM, Anytime Fitness, etc. to some existing virtualized gyms like Daily Burn and Wello. The industry is fairly defined in the sense of physical gym location, but the competition in virtual exercising experiences is just starting. With continual advances in technology virtualization, it is spreading in all aspects, including working out from home. “Market demand is strong, and finding success will come down to finding the type of fitness business that will work for your local community” (franchisehelp.com). Technology and devices are becoming more ubiquitous than ever, which will grant an opportunity to home digital gyms and easy access to healthy exercise from customers’ homes.
Threat of new entry: Working out from home with a live trainer and some friends is a threat to existing gyms which have physical locations. Costs significantly decrease when there is no real estate involved, electric bill, water bill, equipment, etc. Physical location requires space and equipment rental or purchase, all which creates large overhead to production. Virtual gyms do not have a physical location – the technological infrastructure lives inside a few servers, which take up little to no physical real estate.
Technology: Over the decades, technology has changed many industries. It is critical to assess the impact of new technologies and utilize them accordingly. The photography film industry was destroyed by a shift in technology – digital cameras. There’s a possibility that technology can transform homes into virtual gyms, where people will no longer have to drive into a physical location. Though I doubt that digital home gyms will ever completely replace physical gyms, they will still penetrate the fitness industry’s market share. Today, there are more and more apps with pre-recorded workouts for the home. Technology will enable convenient workout schedules for customers, which according to the survey conducted Mullen and Whaley is seen as one of the most valuable.
Dailymail.co.uk. (2013). Looking for a fitnessboost? Workout with a friend – research shows that women train harder with an exercise partner. http://www.dailymail.co.uk/health/article-2263099/Looking-fitness-boost-Workout-friend–research-shows-women-train-harder-exercise-partner.html
Fitness Industry Analysis 2016 – Cost & Trends https://www.franchisehelp.com/industry-reports/fitness-industry-report/
National Institute of Diabetes and Digestive and Kidney Diseases: Overweight and Obesity Statistics. Data from the National Health and Nutrition Examination Survey, 2009–2010 Retried from: https://www.niddk.nih.gov/health-information/health statistics/Pages/overweight-obesity-statistics.aspx
U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplement, 2013. Internet release date: March 2016. Retrieved: September 2016.
S.P. Mullen, D.E. Whaley (2010). Age, Gender, and Fitness Club Membership: Factors Related to Initial Involvement and Sustained Participation. University of Virginia.
Also published on Medium.