Attracting in the Millennial market may seem ideal but a look at several economic factors may cause you to rethink the wisdom in that Photo by Thinkstock
<p>Attracting in the Millennial market may seem ideal, but a look at several economic factors may cause you to rethink the wisdom in that. <em>Photo by Thinkstock.</em></p>

Health Club Operators Should Not Put All Their Eggs in the Millennial Basket

Millennials are 71 million strong, making them appear to be a good market to target for health club memberships, but the economic numbers show that this market may fall behind two other markets in its desirability for business operators.&nbsp;

Much has been written about Millennials as the new wave of health club participants. Numbering 71 million, Millennials are indeed a huge population of potential members, but is this demographic all it's cracked up to be?

In an October online article, Business News wrote: "Millennials are the most diverse generation in history, yet marketers continue to treat them as one homogenous group." 

The article went on to infer that successful Millennial marketers target sub-groups of this essentially Generation Y audience.

Intelligence firm Exponential Interactive researched four million Millennials and concluded that three major forces shape their experiences: the economy, globalization and social media. The company notes that "many of them are stuck in 'economic purgatory'" and are "overeducated and underemployed."

My own searches of U.S. Census Bureau reports show some astonishing facts that contradict beliefs that Millennials are the immediate future of an economic recovery—and are probably a distant third market target for fitness facility advertising.

What are the first two markets? Boomers (at 82 million) and seniors (at 64 million)—double the size of the Millennial market, with three to six times the buying power.

A recent story in The Atlantic online said: "You can't explain Millennial economic behavior without explaining that real wages for young Americans have collapsed. Since the Great Recession struck in 2007, the median wage for people between the ages of 25 and 34, adjusted for inflation, has fallen in every major industry except for health care. Real wages in this age group have fallen more than 10 percent. As Twentysomethings pass into their thirties, they are earning less than their older peers did before the recession."

At the same time, cost-of-living essentials for Millennials have risen to the tune of 15 percent or more. Housing, food, transportation and health insurance expenses consume more of Gen Y's discretionary dollars in an ongoing trend that shows no near-term letup.

So why do most fitness facility operators persist in marketing and programming to this audience that has limited funds to spend on membership and even less available for training, specialty classes and other ancillary purchases?

The answer likely lies in the hackneyed phrase: "Because that's the way we've always done it. It succeeded for years. It'll succeed again."

However, "that dog don't hunt" in present times. The savings rate for Americans under age 35 is minus-1.8 percent. In other words, Millennials on average spend at least 2 percent more than they have just for the basics of living.

The Atlantic article concludes: "Overall U.S. wages are barely growing, and wages for young people are growing 60 percent more slowly than overall U.S. wages. How is a generation supposed to build a future on that?"

I ask: How is the health club industry supposed to grow by marketing to a limited-spend demographic?

Share your thoughts on this topic by using the comment option below.

Next time, I'll look at the two best markets for health clubs for the next decade.


Michael Scott Scudder is founder/CEO of Fitness Business Council, the independent club business network. He can be contacted at 575-751-1212 or

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