A Shift in the Power Lift
In an interview with BBC in 2011, Bill Gates said “the advancement of technology is based on making it fit in so that you don’t even notice it, so that it’s part of everyday life.” This idea has proven true now more than ever. We can think of countless examples such as Uber and Airbnb, where the emergence of technology and innovation has not only disrupted industries but has physically altered our perception of the world around us. A year of lockdowns and social distancing presented yet another example of this technological disruption, and this time, within the fitness industry.
Almost immediately following the initial spread of COVID, the CDC quickly deemed gyms as “hotspots”, due primarily to the disease’s ability to rapidly spread through respiratory droplets. The closing of gyms abruptly uprooted the daily exercise routines of many Americans, and gyms suffered tremendously. Per a report from the International Health, Racquet & Sportsclub Association, “Heading into the pandemic, the U.S. had roughly 40,000 health clubs generating $35 billion in annual revenue. At the end of 2020, the industry has lost $20.4 billion in revenue, while about 6,400 clubs—17% of the total—closed permanently.” Additionally, nearly half of the three million jobs within the health industry were lost, and major corporate chains such as 24-Hour Fitness and Gold’s Gym filed for bankruptcy.
It’s no secret that due to the pandemic, fitness has shifted from the gym to the living room, with companies like Peloton, Mirror, and Tonal leading the charge. As Peloton’s COO Tom Cortese put it in a recent interview with CNBC, the firm’s initial goal was to shift the fitness industry from commercial gym environments into the most convenient place on earth. Consumers, desperate to maintain their routine, shelled out lots of cash to purchase technologically advanced equipment to replicate their gym experience. Despite its high initial cost of $1,995, Peloton’s recent fiscal fourth-quarter sales surged 172%, generating $607.1 million in revenue and swinging an $89.1 million profit, far exceeding expectations. This success has caused major concern across various venues, from chain gym companies to boutique spin gyms. Jeff Zwiefel, chief operating officer of Life Time Inc., voiced this concern in a recent report by the WSJ where he stated, “many of our members have developed habits in a significant way, routines they never had before Covid.” Before the emergence of such sophisticated fitness machinery, an upscale chain like Life Time may not have seen at-home fitness products as a threat whatsoever. Now, companies like peloton offer live classes that directly replicate the niche fitness instruction that Life Time provides. The numbers justify this concern. A recent survey by consulting firm McKinsey & Co. found that “68% of those who started using an online fitness program during the pandemic said they planned to continue for the long term.”
The newfound convenience of at-home workouts leads to another benefit: people are working out more. A recent study conducted by Mindbody, an online wellness platform, showed that 56% of respondent consumers work out five or more times a week. Additionally, Peloton recently reported that “connected fitness subscribers are averaging 24.7 workouts per month, up from 12 a year earlier”. When respondents in the Mindbody study were questioned on the benefits of working out at home, there was a surprising recurring theme. Many attributed their increase in working out to the ability to try new things without fear of judgment. Removing themselves from experienced trainers and members’ eyes, beginners can truly feel comfortable starting their fitness journey. However, the success of online fitness can also be attributed to a seemingly opposing factor. With the introduction of live-streamed classes that connect consumers with others through online groups and message boards, online fitness platforms aim to replace in-person classes, just as Zoom has done for meetings and classes. In a certain sense, this may be the most alarming truth that gyms face because it takes away their primary service of in-person care. People have been able to replace the connection that they had with a real trainer with one that they’ve never met and probably never will. As one dedicated Peloton customer remarked in an interview with CNBC, “Peloton has such a personal connection for me, specifically Robin (referring to a Peloton trainer) when she is talking to that screen, she is talking to me.”
From their convenience to the balance between privacy and interconnectivity, the new online connected fitness industry poses a major threat to the future of traditional gyms even as restrictions ease and capacity limits increase. The question of whether gyms can adequately respond and return to their previous successes is yet to be seen. But as the world attempts to return to “normal,” the traditional fitness industry is undoubtedly facing a new normal.
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Photo Credit: Pixabay
Photo Caption: There has been a shift during COVID-19 to at-home workouts.
