Exercise Equipment In addition to treadmills, home gyms, exercise cycles,
and free weights are very popular. Elliptical machines,
also called cross-trainers, have surged in popularity --
though they still represent less than 6% of the total
Industry Overview equipment market (Consumer Reports, January 2005).
Fitness-equipment specialty stores sell primarily top-of-
the line equipment, while mass merchants and general
U.S. fitness-equipment manufacturers serve two end-
sporting goods stores sell many of the lower- and mid-
user markets in the $10 billion industry: consumer and
priced lines. There has been a significant amount of
institutional (which includes health clubs, apartment
erosion of specialty fitness-equipment retailers’ share of
and condominium complexes, and hotels). The
the market. Specifically, Sears easily leads retail sales
consumer market is by far the largest of the two
of treadmills, and its merger with Kmart only increased
markets; over 80% of manufacturers’ shipments of
that lead (Sporting Goods Business, June 2005).
exercise equipment is for home use.
The industry has experienced significant growth since Sears sells more fitness equipment than any other
the 1990s, though specialty retailers have declined in retailer in the U.S., and the merger of Gart Sports and
number and face tough competition from sporting goods Sports Authority resulted in expanded treadmill and
stores and mass merchants (Sporting Goods elliptical equipment offerings at general line sporting
Manufacturers Association, or SGMA, “Recreation goods stores. But higher-income and more athletic
Market Report,” 2005 Edition; “Marketing Ideas,” consumers still shop primarily at specialty fitness-
Norbert J. Kuk & Associates, February 2004). equipment retailers. The models they carry tend to be
heavier and more durable -- and more expensive --
In recent years, millions of consumers decided that than the units sold by mass merchants (National
having exercise equipment at home was important and Sporting Goods Association or NSGA, June 2004).
made room in their bedrooms, dens and basements for
exercise machines. The most popular piece of The influence department stores, Sears in particular, in
equipment in home gyms is the treadmill. An estimated the sale of treadmills indicates how much ground other
11.6 million Americans report that their indoor exercise retailers must make up if they are to take a larger share
routine includes either walking or running on a treadmill. of the most popular piece of fitness equipment. The
following chart illustrates this point:
Home Exercise Equipment
In Wholesale Dollars and % Market Share, Retail Treadmill Sales: $2.8 Billion
By Type of Equipment (% of Dollar Volume, by Type of Retailer)
Home gyms - 9.9%
33.1% Full-line sporting goods
Exercise (primarily Sears)
cycles - 6.0% $1.38 billion
Free weights - 6.0%
Other* Fitness equipment
$840 million trainers - 5.7%
26.5% $352 million
Benches - 5.0% 12.5%
Ab machines - 4.8%
Other* - $619 million
Ski machines - 2.8%
* Other includes stair-climbing machines, aero gliders and other equipment.
Source: SGMA Recreation Market Report, 2005 Edition. *Includes mass merchandisers, warehouse clubs, Internet sales, etc.
Source: NSGA, June 2005 press release.
name and offers equipment designed with women in
Issues and Trends mind, has grown by leaps and bounds (Sporting Goods
Business, January 1, 2004 and March 5, 2005).
Retailers and direct marketers of home-exercise
The Outlook for Home Exercise Equipment
equipment -- many of which sell equipment through
Resistance trainers -- Nautilus’s Bowflex or ICON’s
infomercials -- have benefited from manufacturers’
CrossBar, for example -- still sell well, but sales were
increased development of products for home use. The down slightly in 2004.
reasons consumers buy exercise equipment include:
Stair steppers, or stair climbers, are a home-fitness
Convenience trend that continues to grow. They are simple to use
and small enough to store out of sight.
Demographics seem to favor the fitness industry over
the long run. Americans aged 55 and older have come
Privacy in working out to enjoy exercise (or at least participate in it) in
extraordinary numbers, and are the fastest-growing
The downturn in the economy in 2001 interrupted a segment of new health-club members. They also
long-term pattern of growth in the exercise-equipment represent nearly one-quarter of the households in the
industry, according to the 2002 and 2003 “State of the U.S. in which exercise equipment is owned and used.
Industry Reports” published by the SGMA. Sales Sales of elliptical trainers are going strong. They were
rebounded in 2002, increasing by an estimated 7%. introduced to the retail channel a few years ago, and
Sales remained relatively flat in 2003, but a healthy 4% sales have been impressive; in many regions, sales of
increase for 2004 mirrored the strengthening U.S. elliptical machines are on par with sales of stationary
economy (SGMA, “State of the Industry,” 2005). cycles. Sales increased nearly 20% in 2004.
Growth in the industry has been driven by an increased Many exercise equipment dealers have hired personal
awareness of the benefits of exercise and the dangers of trainers as sales reps. Their knowledge of how the
sedentary lifestyles. The U.S. Surgeon General’s office use of exercise equipment affects different parts of
has consistently issued reports urging Americans to the body helps make customers comfortable purchas-
ing high-ticket machines. Dealers emphasize that most
become more physically active, and many have listened.
personal trainers must be coached to develop their
Many consumers, wanting to spend more time at home sales skills and should be trained by manufacturers on
with family, are also interested in looking and feeling product characteristics. Both Omni Fitness and Fitness
Experience have personal trainers on staff.
better and are working out more at home. According to
data gathered by the National Sporting Goods Used exercise equipment is a growing market, with
2004 sales of $855 million. It’s a niche that many
Association and Money magazine (February 2005), their
independent dealers have found to be profitable.
purchases of fitness equipment have increased steadily,
and are forecast to rise to $5.1 billion in 2005 (at the Manufacturers are introducing equipment that is far
more technologically advanced than ever, keeping
consumers’ interest level high. Marathon-friendly
An estimated 33% of all U.S. households own and use treadmills, for example, have features such as on-deck
exercise equipment. This broad category includes yoga computers with built-in 26.2-mile “course,” with a 15%
incline. Or video and DVD workouts can play on the
and pilates mats, hand weights, barbells and exercise
screen. On other models, data from heart monitors
equipment like treadmills and stationary bikes. Ever- helps marathoners set training goals; there are also
stressed for time, equipment for home use balances customized units for runners with long legs, allowing
consumers’ need for activity with their desire for them to take longer strides.
convenience (Atlanta Journal-Constitution, January 10,
Sources: Health and Fitness Business, January 2004, July 2004; The
2004). The American Council on Exercise, the largest Wall Street Journal, October 8, 2004, October 1-2, 2005; Money Maga-
nonprofit fitness certification and education provider in zine, February 2005; Sporting Goods Business, July 11, 2005, NSGA
press release, June 2005.
the world, lists a few helpful tips before buying fitness
equipment, such as making sure of versatility, checking Top 4 U.S. Specialty Equipment Retailers
on size in relation to home space, making sure
Gym Source, based in New York, New York, has 26
maintenance is straightforward, insuring ease of use will
stores and $40 million in 2004 sales.
not be a problem and covering all safety concerns.
LA Gym Equipment, based in Arleta, California,
Women, in particular, have embraced the “exercise at has 13 stores and $26 million in 2004 sales.
home” concept. Between 1987 and 2002, the number Omni Fitness, based in Moonachie, New Jersey,
of women participating in home exercise routines has 46 stores and $28 million in 2004 sales.
increased by 113%. One of those taking advantage of Fitness Holdings, based in Torrance, California
that trend is Donna Savage, the President and CEO of (which also owns and operates Busy Body), has 44
Fitness EM. Her company, which licenses the Danskin stores and $68 million in 2004 sales.
Source: Sporting Goods Business, June 2005.
In the advertising that is placed by fitness-equipment Some of the new marathon-friendly treadmills that hit the
stores, there are several factors that are mentioned to shelves in the Fall of 2005 are NordicTrack’s Apex,
motivate people to call or visit, or to make them feel priced at $1,999 to $3,299, and the T518 LC by Nautilus,
comfortable doing business with the store. Some can be which retails for $3,200 (The Wall Street Journal,
categorized as “confidence factors,” and some as October 1-2, 2005).
“convenience factors,” examples of which follow.
Average prices for some popular types of exercise
Confidence Factors Mentioned In Ads equipment range from $400 to $700 for exercise
Gurantees/Warranties Size of Inventory - Selection spinners, $300 to $500 for high-end dumbell sets, and
$750 to $1,500 for home gyms with in-place weights.
Years in Business Complete Service Center
Certified Technicians "All Fitness Questions Answered"
Spa-Quality Equipment Experienced Staff Critical Success Factors
Treadmill Specialty "Try Before You Buy" Among the factors that exercise equipment retailers
said they consider to be critical for success in the
Factory-Authorized Service "Our Only Business"
industry are many that relate to good customer service.
Source: 2004 Comparative Ad Analysis Survey, Norbert J. Kuk & Associates. These include making sure the customer is comfortable
with the equipment purchase, following up to make sure
customers encounter no problems, honoring warranties
Convenience Factors Mentioned In Ads
when something breaks down, and selling customers
Large Display/Showroom Free Delivery and Set-Up what they want to buy, “not what is in stock that you
can sell to them.”
Multiple Locations Open 7 Days
Other key factors in the formula for success follow:
Large Selection in Stock Ample Parking
Toll-Free Telephone Number Free Consultation CSFs for Exercise-Equipment Stores
Website Promos In-Home Service/Repair Thorough knowledge of all products carried
and what they are capable of doing, to help
Assembly/Installation Free Brochure/Catalog troubleshoot if something malfunctions after
Source: 2004 Comparative Ad Analysis Survey, Norbert J. Kuk & Associates. Timely delivery of equipment once it is ordered.
Carrying products with the latest technology,
to differentiate from mass merchandisers,
Value of Products and which typically carry less sophisticated
Services in the Industry Stocking a wide variety of products in addition
to equipment, to attract a wider audience and
provide opportunities to “upsell.”
Articles in Consumer Reports and Health Magazine
(both January 2005) provided a sampling of prices for
some of the equipment that was tested by their staff
members. Industry Resources
Life Fitness Treadmill T3i $2,800
Sporti ng Goods Busi ness SGMA
Horizon Fitness Elite 5.1T $1,800 770 Broadway 200 Castlewood D ri ve
New York, NY 10003 North Palm Beach, FL 33408
Schwinn 418 Elliptical Trainer $1,100 646-654-4500 561-840-1165
www.sporti nggoodsbusi ness.com www.sgma.com
Reebok Elliptical Crosstrainer $600
NSGA Sporti ng Goods D ealer
Parabody GS6 Weight System $3,000 1601 Feehanvi lle D ri ve, # 300 22 Paterson Avenue
Mt. Prospect, IL 60056 Mi dland Park, NJ 07432
Concept2 Indoor Rower Model D $850 847-296-6742 201-612-6901
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