We are in a curious place, here in 2018, in the fitness industry.  We have seen a decade full of an explosion of growth in terms of “new” fitness trends, from equipment to class types and gym models.  But it is starting to taper off, and some of us are starting to wonder, “What’s next?”

I have been listening recently to interviews with people who were on the inside of the 2008 financial collapse.  These individuals were inside all facets, from the stock market, to banks and lenders, and the government.  It has been fascinating to hear their perspectives, as none of them could have predicted the breadth of the shockwave that was felt across the country and around the world.  Looking back, they can clearly see the dominos that started to fall, setting off an unstoppable series of events.

      The fitness industry felt these effects in a number of ways.  The first and largest, was a sharp decrease in disposable household income, which left individuals deciding which luxury items to cut back on.  Gym memberships and personal training sessions took a big hit here.  Prior to 2008, a few mainstream things were going on in the fitness industry.  After decades of basically minimal choices for gym memberships, our options were big boxes full of weight machines, cardio equipment, and sparsely equipped free-weight rooms (definitely no Olympic platforms and few squat racks), Jazzercise-type fitness studios, martial arts dojos that actually focused on the art and not MMA, and the occasional YMCA. Personal training was pretty much limited to 1-hour sessions of 1-on-1’s.  Our lifting habits were heavily influenced by Arnold’s “Pumping Iron” movie, or Jane Fonda’s workout videos.

In the early 2000’s, a few quiet underground trends began.  CrossFit emerged, with a core mission statement to prepare law enforcement and military for the unexpected.  Remember, we were a few years into a military engagement that has now become the longest running war that the Unites States has ever been engaged in. Prior to 9/11, we had been in a 30-year period of peace, which had lulled us into a sense of economic security.  Also, kettlebells took the stage, as after the Cold War ended and the Iron-Curtain was lifted, GS athletes and trainers were free to move west and share their knowledge.  Pavel definitely took advantage of the Russian Special Forces mystique and merged it with the military-themed classes and workout trends that were emerging post 9/11.

So, while one side of the industry was heading towards “General Physical Preparedness (GPP),” the other side took a pendulum swing to “Functional Training,” with a heavy emphasis on a hijacking of physical therapy methods to “fix” all the ailments that we accrued seemingly overnight. Functional Training came with a whole new category of equipment for us to spend our money on, certifications to take and staple to our walls, and lingo for us to impress on our clients. In the middle, Bootcamps took off in popularity, as open floorspace gyms went away from aerobics classes and transitioned to Tabata/HIIT style stations.

Regardless of what your opinions are of Bootcamps, CrossFit and Functional Training, the fact is they helped the fitness industry survive the 2008 financial collapse.  One common denominator between them is that they all use a small to large-group training model.  One-on-one hour-long personal training sessions have all but gone extinct, with only the upper-class being able to afford them.  Uniquely, executives and those used to high-dollar experiences prefer the individual attention and customization that personal training affords them, literally.  For the rest of the middle-class, going from a one-on-one to a small group of 4 maintained some of the personal attention, gave them an element of teamwork, and saved them some money.  Then, in an effort to not completely go out of business, the big box gyms that used to cater to the middle class lowered their prices even more and went after the only market left, the lower class.  This led to a race to the bottom, with gyms like “Fitness 19” offering $19 a month membership, and others even lower.

After the push towards to new equipment and class-types, there was a short-lived push towards an emphasis in programming, as people (surprisingly?!) weren’t seeing results from non-personal large group classes. What has definitely been scary to see evolve with this, is the reduction of knowledge and education among trainers.  When I hear comments like “I don’t have time to teach that,” or “I don’t know how to individually program in a group setting,” it scares me.  People learn through experiences.  So, an experienced trainer becomes knowledgeable after years of writing individual programs.  But a trainer who has only been a cheerleader in front of a group of 50, even if they’ve been doing it for the past 5 years, has no idea how to program.

So, here in 2018, what do we see?  Well, first off, trainer’s tenures are shrinking even more. Ten years ago, the average trainer lasted 2-3 years, now that time has shrunk to 9-12 months.  We see existing trainers trying to branch out and offer online training as a way to expand their reach beyond their city limits.  CrossFit and other franchises/licensees are dropping their affiliations like hotcakes when they realize that they are not seeing returns on those financial investments.  There are still new pieces of equipment being invented, however most of them can be described as odd, and not necessarily solving a real problem. Occasionally we will see something unique come along that bears witness, but for the most part much of what I see at conferences and seminars seems like a reinvention of the wheel.

Here in 2018, we have an economic bear market, that while still growing, has definitely plateaued and is showing signs of another recession.  Consumer debt is at an all-time high again, and interest rates are slowly rising. Thrown into the middle of all of this, are recent tariffs on various products that affect the fitness industry, from equipment, to technology, to clothing.  The steel and aluminum tariffs are definitely unique, as they are bringing two different effects.  It bears mentioning, that the tariffs only apply to imported raw materials, not manufactured goods.  What this means, is that if a company makes a product overseas, and that specific product is not on the list of items to be tariffed, then their costs are unaffected. But if a company imports raw materials from overseas, and then builds their products here in the U.S., then their costs will be increased as the cost of their imported goods has gone up. Now, the intent of the tariff is to push U.S. companies to purchase their raw materials from American companies. However, the unintended result from this practice is that it drives up the cost of American steel and aluminum as the market now has a new baseline for raw material costs, and the across-the-board higher prices are now passed onto the consumer.  This may actually backfire, as companies end up completely outsourcing all production overseas, to avoid paying for raw materials here in the States.

Here and now, the effects are small.  On the equipment side, you may see an increase of $25-50 for every $1000 spent.  But, what you will notice is a decrease in “Made in USA” inventory, as supply becomes limited due to pull-backs in production of raw materials in anticipation of a lower demand due to higher prices.  But in regards to the imported equipment market, you may actually see a decrease in costs, which further increases the price gap between products made locally vs abroad.

As I was researching for this article, I learned information that supported these claims.  When I spoke with distribution companies that import from overseas, they said that the tariffs hadn’t affected them at all, and that their costs were actually decreasing.  When I spoke with individual equipment companies that have their products made in China and then shipped into the U.S., they also said that they were not feeling any negative effects.  It was when I attempted to contact U.S. equipment manufacturers that things got interesting.  Because the tariffs have political implications, one company asked me where my article was going to be published, and then declined to comment.  Others did not respond at all, but when I looked at their websites, much of their inventory was backordered, which tells me they are having supply chain issues, as predicted.

Right now, consumers, in addition to having more debt than ever before, also have more disposable income than they have had in years. This may allow them to pursue what they have missed, the one-on-one attention that they don’t get anymore.  I would begin to offer more of these types of sessions to the clients that you think may want them, but I definitely wouldn’t change your whole business model around it.  Eventually this bubble will burst again, and people’s purse-strings will tighten again.  Basically, economists are operating in a day-to-day evaluation, waiting for the market to drop.  Definitely, attempt to operate in a zero-debt business model if possible.  You don’t want to be sitting on a mountain of monthly payments for equipment and building costs when your memberships take a dip, which they inevitably will.

As far as workout trends go, it’s anyone’s guess at this moment.  The re-popularization of Lever Bells (maces), Indian Clubs, Kettlebells, and movements like the Bent-Press, the Get-Up, tumbling, and others are definitely taking us to a point to where gyms have taken a full circle back to the gymnasiums of a century ago.  I see the extremes of “Functional Training” on one side and “Bodybuilding” on the other having merged to a centric “Training for Movement.”  What I mean by this is that strength movements will move beyond the simple Push/Pull/Hinge/Squat/Core/Carry, and integrate the various planes of movement while building strength and mobility simultaneously.

Operate conservatively, and focus on keeping the clients you have.   Don’t get too worried about rising equipment costs, be more concerned about your client’s financial situations.  Get out and learn as much as you can, and be as educated as possible to set yourselves apart from your competition so you aren’t part of the statistic of failed trainers.  Only grow as fast as you can afford, and make sure you could still survive if you took a big hit in monthly income.  Read the business section of the newspaper so that you are aware of economic trends and trajectories, and think about how economics is affected by both national and global events. And most importantly, stay focused on your long game.

Tim Peterson, Chief FitRanX® Instructor