WELCOME TO THE [MEMBERSHIP] EXPERIENCE ECONOMY

America’s GDP has been growing for 8 straight years, gas prices are low, unemployment is under 5 percent, and the last 18 months have been quietly excellent for wage growth, particularly for middle- and lower-income Americans.

We’re clearly not in a recession.

Yet, major retailers are closing hundreds of stores. The worst year on record was 2008, when 6,163 stores shut down.  Barely a quarter into 2017, year-to-date retail store closings have already surpassed those of 2008… it’s possible more than 8,600 brick-and-mortars will close their doors in 2017.

Of course Amazon.com and other online players are partially responsible for the decline of retail in America, but not nearly to the degree you might think. In 2016, only 6% of retail purchases were made online. But retailers are down by a lot more than 6%.

Want to know what categories are doing better than ever?

Travel is booming. Hotel occupancy is booming. Domestic airlines have flown more passengers each year since 2010, and last year US airlines set a record, with 823 million passengers. Events and live music are booming, with the live-touring business growing over 400% in the past decade.

The rise of restaurants is perhaps the most dramatic. In 2016, for the first time ever, Americans spent more money in restaurants and bars than at grocery stores.

In other words, we’re buying fewer things, but more experiences.

We’re spending more than ever on togetherness, entertainment and fitness. We hunger less for prestige, more for experiences and relationships. In fact, more than three-quarters of millennials report they would choose to spend money on a desirable experience rather than buy something desirable.

Due to the digital age’s increased access and availability of products, consumers increasingly value offline experiences…especially the less accessible ones.

Seemingly, private clubs are well positioned to benefit from an experience economy.  

But beware, the tradeoff for charging “admission” is heightened expectation – well beyond providing quality products and addressing members by name. Excellent design, marketing, and delivery will be every bit as crucial for member experiences as they are for products and services. In the experience economy, ingenuity and innovation will always precede growth in revenue…something the club industry has historically resisted.

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