Although the Health & Fitness Business Show does not offer a lot of education (much to the chagrin of some attendees), the keynote and a pre-show Saturday morning business talk still offer food for thought.
Below, we present summaries of those two. The third educational session, the 3rd Annual SNEWS® Fitness Forum, will be summarized next week. A podcast of the event was already posted on Aug. 9. Click here to hear that.
Keynote: The New Wellness Revolution
Paul Zane Pilzer, economist/entrepreneur/author
Economist Paul Zane Pilzer's keynote presentation kicked off the Health & Fitness Business show's conference series the first day of the show, drawing more than 200 people to hear him espouse on the now $500 billion wellness industry that he identified and detailed five years ago in his best-selling book, "The Wellness Revolution."
While 30 percent of the U.S. population was considered overweight in 1980, today it has leaped to 65 percent, with 30 percent clinically obese, he lays out as background. That means out of a U.S. population of 300 million, he said, 195 million are not enjoying their lives because of their weight and the resulting poor health.
Pilzer emphasized that the fractured fitness industry -- retailers, manufacturers, trainers and other practitioners -- needs to pool its resources together to take customers through the maze to achieve overall health and fitness. In his research for his revised book, "The New Wellness Revolution," he found that the wellness industry is on its way to being a $1 trillion industry, but the fitness segment is behind and "has a lot of work to do to improve business."
He said that fitness retailers and vendors need to stop thinking of themselves as a niche industry, but part of the larger wellness industry dynamic. "The fitness industry hasn't been growing in relation to the wellness industry as a whole."
Pilzer identified five factors driving growth in the wellness revolution:
1. Demographics: Pilzer pointed to the baby boom generation as fueling the wellness industry as they search for the Holy Grail that will slow down the aging process. Born between 1946 and 1964, baby boomers have created a bulge in the U.S. population. Today, they represent 26 percent of the population and 50 percent of the spending in our economy. And they are aging fast.
The economic impact of the baby boomers on wellness is even stronger than their numbers suggest, Pilzer said, because this group is behaving differently than any prior generation.
"Boomers are refusing to passively accept the aging process. They don't want to be old and you have (a product or service) that will help them with that," Pilzer said.
2. Next millionaires: There's more money in U.S households than just 15 years ago, as more of today's masses are becoming millionaires. In 1991, 3.6 million households were millionaires, and by 2001 that had doubled to 7.2 million. In the span of five years, it grew to 10 million. Pilzer predicted that at that pace, there will be 20 million U.S. millionaire households in 2016, representing 50 million Americans living in a household with a net worth of $1 million or more. Along with it, U.S. household wealth has grown exponentially: $13 trillion in 1991, $40 trillion in 2001, $60 trillion presently with $100 trillion predicted for the future.
"As people become millionaires, or just increase their wealth on the way to becoming one, the most important thing they desire with their newfound wealth is wellness. The more people increase their wealth, the greater proportion of their income they spend on wellness," he said.
Whereas old money of the Rockefellers and the Astors dominated the Forbes 400 list of the richest 400 Americans in 1981, 25 years later in 2006 the numbers of old-money names had dwindled considerably and were replaced by self-made entrepreneurs. All of the top 10 on the Forbes 400 list were born poor or middle class, and only two of the top 10 finished college, he noted. Pilzer said there are two reasons to pay attention to these next millionaires: 1) they are looking for ideas to invest money in, and 2) they want to live longer, be healthier and more fit and they have the resources to make that possible.
"Starting a business or building a wellness business creates the perfect storm of opportunity to make a lot of money and to do incredible good. The fitness industry is already there, but has a lot of work to do to improve business," he added.
3. Quantity demand vs. quality demand: Whereas quantity demand reflects the consumer's demand for a large supply of an existing product (i.e., buy it once, want more), quality demand reflects the appetite for a different or improved kind of product (i.e., enjoying it, now want higher quality). Pilzer emphasized that once a consumer has a wellness experience, they will shift from a quantity demand to a quality one.
He said that ignoring a quality demand is one of the biggest mistakes made by new entrepreneurs, particularly in areas of new technology like wellness. Many entrepreneurs begin with a lower-quality, lower price item -- hoping to improve the quality and increase the price as they build their business.
"This is shortsighted. You need to ride that customer up to higher quality, or they will leave you if you don't have it," he said.
Pilzer added that savvy retailers know that a purchase by a satisfied customer is just the beginning, rather than the ending, of their relationship.
This flip in the nature of demand goes both ways. As the consumer begins to satisfy his or her desire for higher quality, the quantity demand once again kicks into gear. As long as technology continues to advance, there will never be a best "XYC" product, he said. Each year, a better one will be developed and the process will start all over again.
4. New technology: New and innovative products generate new niches (like the iPod's influence on the music industry, for example), and the same can be achieved in wellness technology. Many new products are legitimizing the wellness industry by applying medical testing techniques and pharmaceutical-grade manufacturing standards to wellness products and services.
Pilzer predicts that hundreds if not thousands of better wellness-based products and services will come out of the laboratory during the next 10 years.
5. Health insurance reform: In the United States, from 2004 to 2007, enormous changes occurred in health insurance that now allow employees and individuals to invest in their own wellness, and to keep what they don't spend on sickness today for their future wellness.
Health Savings Accounts and Health Reimbursement Arrangements allow consumers to choose their own health providers -- putting wellness-oriented providers on an equal basis with traditional sickness-industry medical providers -- and they allow people to keep for their future wellness tomorrow what they don't spend on sickness today.
"It's allowing people to make their own intelligent decisions about their health and wellness regime," Pilzer said.
In the Q&A portion of the session, one attendee asked how to overcome the inherent laziness of the population. Pilzer said dealers and vendors should purge that thinking from their minds that someone else is at fault. He added, "If you are not reaching these people, you need to ask yourself why and readjust your thinking to, 'What can I do to reach them?'"
Pilzer also encouraged follow-up with customers after a sale. If you find that clothes are piling up on the treadmill you sold to them, ask what you can do to help them. Take the equipment back and find what will work for them, he said, adding that training sessions should always be included in every equipment purchase. He said, "Handle all aspects of the sale and after."
For more about Pilzer and his books, go to www.paulzanepilzer.com.
Boutique Thinking in a Big Box World
Joe Marcoux, Just Did It Training & Consulting
Ending the show's conference series on the last morning Aug. 4, sales trainer Joe Marcoux led an audience of nearly 80 on an educational and interactive journey for 90 minutes attempting to instill participants with a win-win attitude, both for their companies and their customers.
Marcoux's program is designed to implement strategies that separate specialty dealers and their staff from big box and discount stores. Competition is fiercer than ever as retailers like Wal-Mart, Sam's Club, Costco and even Home Depot carry fitness equipment and accessories. Unlike the big boxes, specialty shops can gain the upper hand by focusing on specific goods and services, as well as enhanced customer service.
But, he noted, in some cases specialty is losing the market share. Sales are down, while the wellness concept is growing. Marcoux said, "Ninety-four percent of business failure is systems failure. Do you have a system in place? Are you growing the systems you do have?"
For businesses to succeed, Marcoux said they need to create a specialty sales system and build their brand message, then communicate them clearly to the staff for best results. "Your sales force will take control of their individual destiny as they realize they are a brand as much as the banner they work for," he said.
Additionally, customers should not be forgotten in the process. He said retailers should ask themselves: What is my role in helping customers? What do customers expect from me?
"Your goal is to help people build a better quality of life through health and exercise. If you provide customers with the tools to get results, then your store makes profit," Marcoux said.
To differentiate your business and plug into your boutique thinking, Marcoux emphasized these principles:
1. Treat customers with respect. ("It's time to drop the ego.")
2. Save customers time.
3. Connect with their emotions.
4. Solve customers' problems.
5. Set the fairest price on products. ("Remember, we're all allowed to make money.")
To find out more about Marcoux and his new book, "Boutique Thinking in a Big Box World," go to www.justdidit.biz.