Right now the low-pricers are the flavour of the month. In fact, some consultants and pundits are predicting that within a few years the low-pricers will make up 80% of the market.
Certainly the economics are in their favour (low start-up and ongoing costs) but for what it’s worth I don’t agree.
Sure the low-price business model has a lot of appeal in the market place and, as with most industries, there will always be a place for the low price alternative but it doesn’t necessarily follow that the low-price option will dominate the market.
In our industry most people tend to think that the latest “big idea” will be the last “big idea”. They thought it with World’s and Gold’s, they thought it with the big-boxes that followed, they thought it with Curves, and now most are thinking it with the low-pricers.
I guarantee that the low-price business model won’t be the last big idea in our industry.
I think that it is instructive though that both Curves and the low-pricers have, each in their own way, opened up the beginner market. It makes sense of course… beginners are where the growth in our industry will come.
Your ability to get beginners into your club and then get them to stay is where your competitive advantage will come from moving foward.
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