When Andrew Malkiel decided to move forward with the planned acquisition of Apex Human Performance in New York City in the early Fall of 2020, his friends and family thought he must be crazy.
New York City was still in the grips of the pandemic, the city was largely under lockdown and most local businesses had not even begun to plan for a return to the office. Midtown still resembled a bit of a ghost town, a vaccine was still wishful thinking, and the lights were out on Broadway.
But Malkiel knew a good opportunity when he saw it and drew inspiration from Warren Buffett who once said, “be fearful when others are greedy and greedy when others are fearful.” Sage advice from the Oracle of Omaha, and Malkiel soon closed on the multimillion-dollar deal.
“While it was certainly a risk to buy a gym in the middle of a global pandemic, I knew there’s nothing like Apex in the market today,” explained Malkiel. “Nowhere, maybe aside from a professional sports team, does an individual get fully coordinated care from their personal trainers, nutritionist, and physical therapists, who all work with one another to create complete hyper-personalized plans to improve their member’s health.”
It’s one of many things that set Apex Human Performance apart from the competition and what drew Malkiel to move forward with his ambitious plans during a time of great uncertainty. So far, it’s paid off handsomely.
Over the past year, while gyms across the country shut their doors permanently, and those remaining are open at a fraction of capacity, Apex Human Performance has thrived, growing 25 percent year over year.
“While our financial performance has been impressive and creating new career opportunities for trainers in a field hit particularly hard by COVID is satisfying, the most rewarding part is hearing stories from members about how their health improved,” said Malkiel. “Whether it’s eliminating chronic back pain, losing forty pounds, stopping insulin medication, or feeling confident playing football with their grandkids, it’s these stories are what keeps me motivated.”
The COVID-19 pandemic has presented challenges for all types of businesses, particularly gyms, health clubs and fitness studios. While many fitness trade observers initially expected the pandemic to be short-lived, it now appears more likely that certain changes brought about by COVID may become longer-lasting for the industry.
The pandemic caused many gyms, clubs and studios to close their doors for at least some time during the pandemic (approximately 38,000 gyms nationwide have shuttered permanently since May 2020). In July 2020, approximately 60% of existing gym members planned to cancel their memberships according to Freeletics. The cost of the pandemic has been staggering; it cost gyms at least $13.1 billion between March 2020 and August 2020 alone.
On the plus side, among Americans identified as health-engaged, roughly 25% say that since the pandemic began, they now have more time to stay fit — especially men, millennials and those who are a part of Generation Z (people born between the years 1997 and 2012). But simultaneously, 28% say they feel less energetic and/or motivated to exercise; this is especially true among older people and women. Perhaps tellingly then, it’s men, millennials and those in Generation Z who are much less likely to have ended workouts at gyms during the pandemic, as compared with older consumers and women. For these latter two groups, the loss of gym time has contributed to higher levels of inactivity and poorer emotional stability, with 35% of health-engaged women saying that their mental health deteriorated during the pandemic, as compared with 24% of men. As of 2020, some 59% of Americans reported they weren’t planning to renew their gym membership once the pandemic is over.
Along with these trends, it’s been reported that younger consumers are more likely to have adopted fitness routines at home and/or increased their use of digital or online fitness software. In total, during pandemic lockdowns, at least 74% of all Americans tried some form of fitness apps.
As we move into the final months of 2021, digital and online fitness will continue to grow, even as consumers slowly make their way back to health clubs, fitness studios and gyms. Digital fitness has now become a more established part of workout routines, especially amongst active, high-value, young consumers.
The pandemic’s Delta surge presented challenges for gym-goers returning to in-person fitness locations, especially for older consumers and women. Health clubs’ and gyms’ active memberships may now be more dominated by men and active, younger people, many of whom never stopped coming in to work out during the pandemic, as compared to women and Baby Boomers.
These latter two groups have yet to return to gyms and health clubs in significant numbers. Generation X (people born between 1965 and 1980) numbers also began falling off with the Delta surge in July 2021. Unsurprisingly, these same groups stopped working out at gyms and health clubs in much larger numbers at the start of the pandemic, and they’re continuing to stay away; the Delta surge has made their absence more visible and longer-lasting.
The greater consciousness there is of social distancing and the more that women and older consumers stay away, the harder it will become for some gyms to balance their value equation and make it worthwhile for gym-goers to come in. Group fitness classes that used to attract women in greater numbers than men have become less appealing as it’s been shown that the Delta variant of COVID-19 can be more transmissible.
For many gym-goers in these demographics, the social aspect of classes may be perceived as not worth their risk, as compared with reliable solo or outdoor workouts these groups have discovered in the last 18 months. It’s unfortunate, but many women and/or older consumers may not return to gyms, health clubs and fitness studios until the pandemic is over or close to it. Even then, it may come down to whether outdoor or at-home fitness routines are satisfactory enough to outweigh the perceived benefits of revisiting or rejoining a gym.
Why Retaining Current Members Is Important
Because COVID case counts, social contexts and regulations vary widely across the United States, it’s important to know what current customers want from a gym. Gym members who use digital/online fitness need to be recognized as high-value consumers with their own unique dispositions.
At least 61% of digital and online fitness users happen to be members of brick-and-mortar gyms; this has been the case for about a year. At the same time, the number of brick-and-mortar gym members who are starting to use digital/online fitness apps and websites is increasing, rising from 42% in the first half of 2020 to 51% a year later. This clientele is of particularly high value; they have higher incomes, are drawn from more urban areas and are busier; more than two-thirds of them have children. They also tend to be male and more active across different sports than average gym-goers — particularly within team sports. They’re also more likely to own new fitness technology, including heart-rate monitors, fitness trackers and smart scales.
Because this latter group is active, they have very specific reasons for using gyms; they’re more likely to take advantage of personal training and group classes. With many Dads among them, they appreciate features like on-site child care and 24-hour access. Although many of them work out frequently at home, they sometimes see a gym as a haven. They may also see more value in a dedicated gym website and/or app.
The takeaway here is that digital resources — scheduling systems, virtual personal training sessions, streaming classes and fitness tracking — should be easy to access and use, and that they should add convenience by “bringing the gym to where the client is.”
At Apex Human Performance in New York City, the goal is to deliver education and expertise, total body care and a frictionless fitness concierge experience no matter where a client is located or when they need particular services.
Building Loyalty Through Technology and Flexibility
Although the Delta variant might discourage women and older consumers from returning to in-person fitness — at least in the short term — clients that have stayed with gyms and health clubs despite the ongoing COVID situation are likely to remain.
When looking at gym and fitness trends since the beginning of the pandemic, it becomes clear that retaining current customers and increasing engagement via both in-person and digital/online fitness has the most value in the near term. Digital/online fitness is here to stay; it’s a good investment because it provides a way to maintain the personal contact and community that’s desired by gym members even if they’re not able to attend in-person.
It’s the goal of Apex Human Performance to stay on top of these trends and to serve all its clients with a level of service exceeding any other fitness club in New York City and with an impact that should go far beyond the doors of its state of the art gym.
Published November 17th, 2021