The market
The global market for gyms, health centers, and fitness clubs is estimated at over $100 billion. The U.S. market is the largest and perhaps the most mature, with estimated revenues of $25 billion in 2011 and a projected annual growth rate of 2.6% for the next five years. This sector comprises nearly 30,000 businesses, employs 550,000 people, and boasts 43 million members. This means that over 13% of Americans are members of a gym, health center, or fitness club. Australia, a nation with a strong sporting culture, has 1,500 businesses generating $3 billion in revenue from this modern leisure activity, employing nearly 40,000 people. This is more than three times the number in the UK, a nation with twice the population. Even with approximately 1.8 million Australians belonging to gyms and health centers, representing 8.5% of the population, the market is far from saturated. Consequently, revenues from these "lower-end" centers are expected to continue growing at an average annual rate of 13%, exceeding global trends. The sector has maintained steady growth, even during recent economic downturns. This is reflected in the growth of the global exercise and fitness equipment market, which is projected to expand by 10.5% by 2015. Centers and clubs represent a local business, and no major players in the industry hold more than 5% of the market. One reason for the lack of standardization and market dominance is the diversity of the business, which ranges from tennis clubs and ice rinks to swimming pools, sports facilities, spas, and gyms, fitness centers, and dance studios. Global sales are impressive and expanding, and the market is poised to penetrate urban areas further. Growing societal concerns about obesity and weight loss, along with the desire to participate in team sports, have led to the creation of several international companies, such as Gold's Gym International, a chain with over 600 facilities in the United States and 30 other countries, which began in 1965 in Venice, California. Gold's Gym is the world's largest gym chain with over 3 million members. Fitness First and the Ardent Leisure Group in Australia are beginning to eclipse traditional leaders in sports facilities, such as the Melbourne Cricket Club.
Innovation
Gyms are increasingly venturing into the realms of health and nutrition by introducing cardiovascular monitoring and training equipment and weight-loss programs. Some combine physical strength with inner strength and confidence. Meanwhile, research programs have begun to convert the enormous amount of running, walking, and weightlifting into a renewable energy source. Members of Gold's Gym Run completed the equivalent of 23 trips around the world each day, cycled across the United States 750 times, and lifted more weights than there is gold in Fort Knox. Currently, most of them drive to the gym, and the machines they use consume energy instead of generating electricity. On the other hand, a key question is what can people who aren't club members do? Marcia Kilgore, born on a farm, left her native Saskatchewan, Canada, for New York City hoping to attend Columbia University. She didn't finish her studies but became a self-taught esthetician who first successfully treated her acne, then launched Bliss in 1996 at the age of 31, a spa concept where treatments were offered with trendy music, brownies, and wine. Following this venture, which she sold to the French fashion group LVMH, Marcia moved to London and began manufacturing her own cosmetics and personal care products under the brand Soap & Glory. While sitting in a seminar and wanting to exercise, she wondered if it was possible to design shoes that would work the feet and legs while walking. She envisioned a midsole that acts as a shock absorber, combined with a curved upper that makes the foot float. Marcia then patented the "Microwobbleboard," which was developed into a series of prototype sandals at South Bank University in London. The muscle-activating shoe increases the time muscles are engaged with each step. A high-density heel absorbs up to 22% more shock in the lower legs and relieves joint stress; a low-density midsection creates instability that activates the lower leg muscles up to 11% more. The toe cap is made of a medium-density material that helps maintain speed and rhythm while improving stability. The 30% increase in lower leg muscle activation and hamstring stimulation, combined with the overall pressure load rate, allows for a blend of fashion, functionality, and exercise. Multiple benefits are a fundamental characteristic of the Blue Economy, and it is rare to see a simple consumer product adopted on such a broad scale. Marcia created her company under the Fitflop brand in 2006.
The first cash flow
When the shoe's design was mentioned in the media, it led to 55,000 visits to the Fitflop website, which was designed as a placeholder page for ideas since the shoe wasn't actually manufactured. Fueled by this surge of interest, and without a business plan, Marcia took action and ordered 15,000 shoes for Europe and 15,000 for the United States. The shoes became an instant hit, and the first batch quickly sold out. The idea of shoes with body-enhancing and health-promoting features resonated with the general public and addressed a latent demand from both men and women. Fashionable shoes too often wreak havoc on the feet, and healthy shoes like the one Dr. Scholl invented nearly a century ago, while correcting weak arches, feel heavy and bulky. These shoes aren't ideal for pairing with a fashionable dress or suit. In just a few years, revenue jumped from tens of thousands to ten million in 2011. Fitflop's gross revenue reached $125 million in 2010. What if this innovative design and marketing were combined with the shoe concepts of Guillem Ferrer (Case 63)?
The opportunity
The company is just beginning to grow, and while Marcia has never claimed to compete with gyms, it is helping to create a new trend for consumer goods. The company has expanded to over 50 countries in five years. However, the potential for providing extra exercise through walking or even dancing on the beach could be extended to tone the legs of cyclists, mountaineers, and long-distance runners. With shoes priced between $50 and $250, Marcia appeals to a broad audience. Marcia has also incorporated cultural elements, as seen with the "Manyano Sandal," a summer slipper hand-beaded by women from the Wola Nani cooperative in Cape Town. This cultural symbol in a sandal, which also receives a quality seal from the American Podiatric Medical Association, is innovative. The combination of art and fashion was already a well-established trend; adding exercise and health creates a new business model. And that's what we're looking for in the Blue Economy.
