Tuesday, July 10, 2012 | Edited by Daniel Moores
||Large Cities Got Larger Despite Downturn
The urban renaissance that blossomed in boom years during the past two decades is flourishing even more despite the economic downturn and housing slump, which kept more Americans away from suburbs and closer to major job centers.
The nation's largest cities are growing faster than the country as a whole, according to July 1, 2011, population estimates released by the Census Bureau.
All but two (Baltimore and Detroit) of the 33 cities that have 500,000-plus people grew since 2010. Ten years earlier, six of the 30 cities with half a million or more were declining.
Of the 100 most-populous cities, almost three-fourths are growing at or above the national average of 0.9%.
"In short, cities are starting this decade in a stronger growth position than in the 2000s," says William Frey, demographer at the Brookings Institution.
New York City, the nation's largest, grew almost at the U.S. rate (0.9%), adding 69,000.
"In the 1960s and 1970s, economic downturns used to impact the central city more than its suburbs," says Robert Lang, professor of urban affairs at the University of Nevada-Las Vegas. "Now the reverse is true."
Several forces are at play: fewer households with children, the high cost of energy and commuting and "a redefinition of lifestyle that places a premium on urban amenities," Lang says.
Growth slowed the most in the Sun Belt, especially in areas hard hit by the housing bust and foreclosures, Frey says. They include places such as Henderson, Nev.; Raleigh, N.C.; and Fresno.
Larger cities such as Atlanta, Denver, Dallas and Washington, D.C., experienced a surge last year.
"Some of these areas are holding on to (people) who normally would have gone to the suburbs in a better housing market," Frey says. "The question is whether this will continue when the suburban housing market improves."
Lang thinks it will but that suburbs also will grow again -- especially those that offer urban conveniences such as mass transit and housing within walking distance of jobs and services.
His analysis of 76 Sun Belt suburbs that boomed to populations of 100,000 or more in recent decades -- what he calls "boomburbs" -- shows that those that have rail lines gained more people. The 43 with rail service, including Plano, Texas, and Tempe, Ariz., grew more than those without. Aurora, Colo., a Denver suburb, has a rail line and grew 2.24%. Westminster, Colo., another Denver suburb which has yet to have rail, grew only 1.75%, Lang says. Mass transit has spurred dense development around stations.
"In the last decade, boomburbs grew one way: out," Lang says. "This decade, large suburban cities can grow up around station stops."
• Chicago, which was losing an average 20,000 people a year from 2000 to 2010, added more than 11,000 to 2.7 million.
"With the onset of the recession, domestic migration to the outer suburbs ended," says Kenneth Johnson, demographer at the University of New Hampshire's Carsey Institute.
A similar pattern is emerging in the Boston area. The city gained almost three times more people from 2010 to 2011 than it did every year on average the previous decade and grew faster than its suburbs, Johnson says.
"A short-term phenomenon," he says. "I expect to see growth in the outer suburban areas pick up again."
• New Orleans was the fastest-growing large city, with a 5% gain to 360,740. Despite that, the city still has only about three-fourths of its population before Hurricane Katrina struck in 2005.
• Midwestern cities such as Cleveland, Cincinnati, Toledo and Buffalo slid in the rankings.
Denver rose three spots to 23rd, passing Baltimore, Washington, D.C., and Nashville. Austin jumped past San Francisco to 13th.
• College towns and state capitals are faring well. Of 25 selected small cities with universities, all but one (Grand Forks, N.D.) grew. All but four (Trenton, N.J., Albany, N.Y., Augusta, Maine, Charleston, W.Va.) of the 50 state capitals grew.
(Source: USA Today, 06/28/12)
||Fitness Industries Pump Up Revenue
Americans are in the middle of a fitness craze. This movement is seeping into popular culture, as brightly colored yoga mats and fitness clothes fly off the shelves at retail stores, TV shows about weight loss grow more popular and spinning classes are filling up fast. More Americans are heading to the gym than ever before as they desperately desire washboard abs and chiseled biceps.
In the midst of this growing enthusiasm, the fitness industries are becoming the biggest beneficiaries. Despite extremely low disposable income growth in the five years to 2012 (an average of 0.1% per year), the fitness sector is expected to grow at an average annual rate of 2.3% over the same time period.
Together, revenue from fitness clubs, pilates and yoga studios, boxing gyms and clubs, personal trainers, fitness DVD production and online sporting apparel sales is expected to total $45.2 billion in 2012.
The fitness industries share two external drivers that are crucial to comprehending revenue shifts. First, The Bureau of Labor Statistics' Time Use Survey measures the amount of time consumers spend on leisure and sports, which indicates the amount of time consumers can spend on fitness.
In 2012, Americans spend an estimated average of 5.2 hours per day on leisure and sports. This time varies by age, gender, number of children and employment status. For instance when unemployment was climbing in 2009, time spent on leisure and sports rose to an average 5.3 hours per day.
The second shared driver, per capita disposable income, indicates Americans' ability to spend on nonessential items, as measured by the Bureau of Economic Analysis. In 2012, IBISWorld expects per capita disposable income to reach $32,954.
The volatile economic environment in the five years to 2012 has not impacted these drivers favorably. The Great Recession following the financial crisis shattered the nearly two decades of disposable income growth; disposable income dipped a remarkable 3.2% in 2009. In addition, thousands of Americans lost their jobs during 2008 and 2009, which at first caused an increase in the amount of time spent on leisure and sports.
However finding jobs became a priority that took time away from sporting activities. In addition, the economy began to pick up again in 2010, decreasing the time spent on leisure and sports as consumers headed back to work.
Despite the negative influence of the sector's main drivers, all six industries mentioned above experienced positive average revenue growth over the five years to 2012. So what then was driving growth?
The exponential increase in health consciousness among consumers provides a starting point to understanding the recent growth in fitness industries.
Reports of high obesity incidence and links to heart disease have driven many Americans toward healthier diets and increased exercise. While this trend began well before 2007, it has continued through the period at a steady rate. Public campaigns to curb obesity, such as Michelle Obama's "Let's Move" campaign, have helped increase general awareness of the benefits of physical exercise in specific demographic segments and in the traditional market of gym members.
According to government association the Centers for Disease Control and Prevention, the percentage of adults being advised to exercise increased about 10.0% between 2000 and 2010. In 2010, 32.4% of adults who saw a physician or other health professional were advised to begin or continue to exercise.
As Americans have become more aware of their need to be healthy, fitness clubs have experienced a rapid increase in membership. Health club memberships rose from 36.3 million in 2002 to 42.8 million in 2011.
In addition, because disposable income has been volatile for many Americans, this increase in health consciousness has prompted more Americans to purchase fitness DVDs. Health club memberships can be expensive, so for those who still wanted to remain active and have some instruction, fitness DVDs are an excellent alternative. Many baby boomers are focusing on becoming healthier, especially as they age, and are purchasing more exercise DVDs because they are more convenient than traveling to a gym.
While health consciousness among Americans has been encouraging people to spend time and money on fitness, the perceived social status that comes with the display of leading a healthy and fit lifestyle has also prompted higher demand for fitness industries.
High-end gym memberships and personal training often require wads of cash, and participating in such activities displays a level of wealth similar to owning a large diamond ring or a luxury vehicle. Also, consumers need to have the time to spend hours at an expensive gym or visit to a personal trainer, and having this free time is another sign of wealth.
In the five years to 2012, there has been a rise of aspirational shoppers which are middle-income earners who display high-end taste. This trend is significant in the Generation Y population, which is also one of the highest health conscious demographics. With high-end taste and a desire to be healthy and fit, it is no surprise that Generation Y consumers have expanded their demand for high-end gyms and personal trainers. IBISWorld estimates the Personal Trainers industry revenue rose 1.4% in 2012.
Along with high-end activities, consumers can show off their fit social status by the clothes they wear and equipment they use. Old t-shirts and worn out basketball shorts do not always cut it at the gym anymore. Spandex pants and moisture wicking tank tops are wildly popular among females sporting expensive brands like Lululemon, Nike and Athleta.
Males on the other hand are sporting their wealth by wearing Under Armour and using sportbands that track the user's pace and calories burned while exercising.
With the expanded interest in athletic clothes, industries such as online sporting apparel sales are thriving. In the five years to 2012, the Online Sporting Apparel Sales industry is expected to grow at an average annual rate of 7.6% to $4.8 billion.
Strong is the new skinny
In years prior to the current period, many women viewed exercise and fitness as a way to get or remain skinny. However, in the past five years there's been a cultural shift where skinny is no longer the primary objective for female exercise. With more women in the workforce, many of whom have demanding jobs, and women balancing family with career, exercise has become an outlet for stress as well as a way to gain energy and strength.
Pilates and Yoga Studios have prospered because of this new kind of focus on exercise and the industry's revenue is expected to rise by an average of 7.7% per year to $6.9 billion from 2007 to 2012. Exercise routines that enable females to relax but gain lean muscle at the same time have attracted women to yoga and pilates.
Other specialized exercise practices, such as boot camps and spinning classes, have attracted females as they wish to gain muscle and be in a more competitive atmosphere than yoga studios. With this new trend, IBISWorld expects more females to try boxing or other nontraditional forms of exercise. Already in 2010 and 2011, revenue for Boxing Gyms and Clubs grew by 3.6% and 2.2%, respectively, and is expected to total $643.5 million in 2012. Boxing has primarily been a male sport but as females diversify the way they do exercise, boxing gyms are forecast to attract more females.
As the fitness sector has steadily gained revenue over the past few years, IBISWorld expects it to expand even further in the next five-year period. Consumers are expected to increase their health consciousness from 2012 to 2017 resulting in more Americans desiring to exercise.
Exercise has already become a priority in many Americans' lives rather than a leisure activity. Therefore, even as the amount of time spent on leisure drops with improvement in the employment rate, consumers will still make time for daily exercise. Also, as fitness remains a social symbol, niche fitness clubs and expensive classes will thrive where the exclusivity of such services creates status.
Lastly, as strong is the new skinny among females, more women will want to work out. As a result, classes and workout routines that promote strength and lean muscle will be heavily demanded. This also creates room for innovation among fitness instructors, as they create workouts specifically catered to different women's body types.
(Source: IBISWorld, 06/19/12)
||CE Industry Will Face Second-Half Challenges
The consumer electronics industry may be in for a rocky holiday season, as early promotions, lean inventories, an unstable economy and a surfeit of legacy products produce a volatile brew for the back half of 2012.
Consumer Electronics Association chief economist and senior research director Shawn DuBravac provided the mixed forecast at the recent CEA Research Summit.
Setting the backdrop for Holiday 2012, DuBravac painted an erratic macroeconomic picture that could pressure consumer spending throughout the second half. While technology products held up better than other durable goods last year, led by demand for smartphones and tablets, CE has been losing that lead through the first six months of 2012, as overall consumer spending falls from last year's levels.
Smartphones and tablets will remain the industry's twin growth drivers, DuBravac said. Smartphone unit volume will grow 22 percent this year in the U.S., making the category larger than all computing and tablet products combined, while worldwide tablet volume will climb 118 percent to some 120 million units.
Other CE categories are not faring as well. Unit volume for flat panel TV is flat year-to-date and revenue is down 3 percent on weakness in plasma and smaller screen sizes, which are being cannibalized by tablets. But LCD unit volume is up nearly 26 percent so far in 2012 on strength in 50-inch and larger displays.
Similarly, falling demand for MP3 players has been a drag on audio volume, which has fallen 6.6 percent in units and 18 percent in revenue year to date.
In digital imaging, demand for mirrorless and DSLR products (up 6 percent in units and 17 percent in revenue in 2012) couldn't offset declines in overall category volume, which fell 31 percent in units and 6 percent in revenue year to date.
Looking ahead to the holiday season, DuBravac predicted that retailers will begin their Black Friday promotions even earlier than previous years, some as soon as early October, in order to gauge holiday demand, and that historically low inventory levels for retailers and OEMs may leave some dealers scrambling for product by the end of the selling season.
(Source: TWICE, 06/27/12)
Daily Sales Tip: Your Opening Statement
When making a sales call, keep your opening statement short, understandable and credible.
Your goal is to start a dialogue rather than a one-sided discourse in which you preach about the features and benefits of your product or service. You establish who you are, why you're there, and why the prospect should be interested in what you have to say.
There are many ways to open the call, but the common objective of good openings is to lead the prospect to agree that you're allowed to ask questions.
Source: Marketing consultant Ted Barrows