This blog shows you how to research a market gap through the example of exploring a gap in fitness services for people over sixty.
Found a market gap? Here’s what to do!
1. Find evidence of an unmet need
Example: Older people need more physical activity.
There are about 15.6 million people aged 60+ in the UK and this is projected to rise to just under 20 million by 2030. Although our life expectancy has been increasing, there was little or no improvement between 2015 - 2017 and our healthy life expectancy has remained the same or decreased. Currently, at 65 years old we can expect to spend around a decade of our later years in poor health, with increasing numbers of us managing multiple health conditions.
A paper published in Biogerontology March 2016 entitled ‘Physical Activity in Older Age – perspectives for healthy ageing and frailty’ describes how our health declines with age:
“Musculoskeletal disorders are the most common chronic, disabling conditions, affecting 14% of people aged over 65 years. These are followed by heart and circulatory conditions affecting 10 %; respiratory conditions affecting 6%; endocrine or metabolic conditions affecting 6% and mental disorders affecting 4% of people aged over 65 years. Incidence of these chronic diseases more than doubles in the 10 years that follow retirement. Of people aged over 75 years, 30% report chronic musculoskeletal conditions; 32% report heart and circulatory conditions and 13% report endocrine or metabolic conditions.”
Sedentary lifestyles and diet choices have not helped. According to the Health Survey for England (HSE) 2017, approximately 74% of people aged 55+ are either overweight or obese.
2. Define the problem
Older people don’t exercise enough.
Studies have shown that regular physical activity is safe for healthy and for frail older people. Conversely, the risks of developing major cardiovascular and metabolic diseases, obesity, falls, cognitive impairments, osteoporosis and muscular weakness are decreased by regular physical activity, ranging from low intensity walking through to more vigorous sports and resistance exercises.
The NHS advises us that to stay healthy or to improve health, older adults need to do two types of physical activity each week: aerobic exercise and strength exercises, however the HSE 2016 found that:
43% of adults aged 55-74 met NHS guidelines for aerobic activity, declining to 24% in those over 75
19% of adults aged 55-74 met muscle strengthening exercise guidelines, reducing to 8% over 75.
3. Explore why current services fail
Why don’t older people use fitness services?
Research commissioned in 2015 by the Associated Retirement Community Operators (ARCO) shows 70% of over 65s want to be more active. The survey revealed a number of reasons why older people were not able to do more physical activity. Apart from those who reported medical reasons or injury as the main reason for not exercising more (37%):
25% feel self-conscious in environments such as gyms which are often dominated by young people
22% feel that gym facilities don’t accommodate the needs of older people
29% feel that the cost of using fitness venues such as gyms and pools was a barrier
4. Review available published research on what target customers want
The survey revealed that almost 25% of respondents would be more likely to attend a nearby gym facility or classes if they had someone to go with. This increased to nearly one in three in over 65s who live alone. There was a difference in how men and women viewed going alone, with 28% of women saying they would visit the gym if they had a friend go with them versus 17% of men. For those who live on their own, 25% of over 65s also stated they would be more likely to attend if there were more older people there and if there were more classes offered for people of their age (23%).
5. Look for signs of growth potential
There are signs that more older people are taking up exercise classes.
Silverfit is a London-based charity. Founded in 2013, it promotes happier, healthier ageing through physical activity. Between 2015/6 and 2016/7 the charity more than doubled its fee income, then doubled it again in 2017/8. These are small figures, admittedly, but this is a small organisation and so increasing total income (including donations) from £60,594 to £156,140 over this time period is significant. Accounts can be studied here. There is a small registration fee, and then £3-£5 per class. I think this organisation is worth examining more closely. Interestingly, the name of the charity shows that classes are aimed at older people, immediately overcoming some of the identified barriers to exercise classes.
Founded in 2010, Move it or Lose it! helps people keep active in later life. The company appears to be growing its customer base and expanding nationally by training specialist fitness instructors to deliver its own training programme and it also sells a range of books, DVDs and exercise equipment. Again, the numbers are very small, but there is growth. Fees are about £3-£5 per class.
6. Find out the level of disposable income available to your target market
Retired people have lower disposable incomes than non-retired people but their income has grown faster. In 1977, after adjusting for inflation, the median income of retired households was £7,900 while the figure for non-retired households was £14,100. By the financial year ending 2017, the income of retired households was 2.8 times higher at £22,300 while the income of non-retired households had only just over doubled to £29,900.
7. Explore their spending habits
Older people pay less for housing. In the financial year ending 2017, whilst 27% of total expenditure was spent on housing costs for households in the under 30 years age bracket, this reduced to 19% for households aged 65 to 74 years and 18% for households aged 75 and over. This reflects that a greater percentage of older households own their own home outright.
Older people spend more than others on recreation and culture. Of their disposable income, Households in the 65-to-74-year-old age group spent nearly a fifth of their total spending on recreation and culture.
Expenditure on recreation and culture by age .
What does all this mean?
My desk research has identified a large need for increased physical activity amongst older people. The research has enabled me to define the problem, learn why current services are failing this target market, explore new businesses whose offers have been devised specifically for them and find evidence these businesses are beginning to succeed. I have also discovered that older people (aged 65 – 74) spend the most on recreation and culture, which means that they have the funds to pay for fitness. To me, this information indicates that this is an attractive market with sufficient opportunities for growth.
What could you do with this information?
Here are just a few ideas. If you are interested in health and fitness you could:
Train to be a fitness instructor for older people and target retirement homes, older people’s social groups and households in areas occupied mainly by older people. You may wish to visit Streetcheck, or other sites that provide demographic information by postcode or area.
Survey people in your target area and find out what type of fitness services they would like, where they would like to receive them and how much they would be prepared to pay. Then design and offer service packages that would both appeal to these people and allow you to make a profit.
Consider setting up a ‘boutique’ gym for older people in an affluent area. You will need to do much more research on this first!
Explore the potential of offering online health and fitness services, including one-to-one personal training and online group sessions.
Other opportunities could include sales of activity-related accessories such as:
Exercise equipment for the elderly, for example Manage at Home’s exercise equipment for the elderly.
Gym wear or other suitable clothing eg Zazzle’s senior women’s activewear.
Fitness gadgets eg NRS Healthcare’s Gentle Exercises products
These are just a few of the opportunities that exist in this market and you are certain to find more, if this sector interests you. If it doesn’t, I hope that my methodology for exploring market gaps has been useful to you.
Best wishes
Viv
Silver Startups