Fitness digitalization – band-aid solution to COVID-19 pandemic or irreversible new fitness standard?
Uncertainty, urgency, change, adaptation, reaction, disruption. A small – but representative – bucket of words peaking usage since 2004 according to Google Trends, that very well conveys the convulse times that most industries are undergoing in the aftermath of COVID-19 pandemic. The fitness industry – one of the hardest disrupted – has not been an outlier.
Is fitness digitalization here to stay? How well entrenched are the new at-home and outdoor fitness routines? Will in-person workout tribe rewards outweigh the convenience, thrift and breadth unearthed by the new models to consumers? Who, if anyone, will win?
No magic ball, other than time, can allow us to answer these questions, but the fitness industry has made its bet and overall, it is fitness digitalization.
Survival or bet, fitness players have shifted to digital
COVID-19 has left no fitness player indifferent: from the bitter taste left to health clubs and fitness professionals to the rather sweet one left to existing digital apps and retailers of smart at-home equipment.
Overnight change is the new standard, and health clubs and freelance professionals – forced overnight to turn to digital to survive – have been no exception. Limits on in-person occupancy levels, inconvenient safety requirements, and individuals’ safety concerns – still persisting ten months after the outbreak – continue to threaten the economic viability of current business models, and have pushed the remaining minority of change-averse optimists to shift to the digital model as a last resort to give continuity to their incomes and keep customers engaged.
Digital is no easy solution, but rather a catalyzer of competition. In a context of mass digital content and low barriers to entry, retaining the loyalty of current customers or – even more difficult – acquiring new ones, is not only extremely difficult but also capital-intensive. The hazard is exacerbated for the many players that – constrained by the breath of their in-person fitness proposal – offer niche content digital models in a world where fitness routines are diverse, and individuals are not willing to assume the extra cost of multi-homing. In this context, the ability of these players to successfully capitalize on the digital trend is somewhat unclear and, as of today, most have been cornered to offer it as a complimentary service to an in-person membership.
A whole different side of the coin has been the one faced by existing digital apps and retailers of smart at-home equipment, for whom saying that “the sky has never been brighter” is likely not an exaggeration. Health and fitness app downloads grew by 46% worldwide between Q1 and Q2 of 20201 and retailers of smart at-home equipment have experienced spectacular growth, with Peloton set to double sales during the pandemic from $910 million sales in 2019 to $1.8 billion by end of 2020 according to JPMorgan estimates2.
Not everything is bright for these players though. Not few were the lucky ones already well-placed in the market pre-pandemic, ready to take advantage of the momentum and favorable wind (Calm, Headspace or MyFitnessPal were highest-grossing apps in the pandemic peak1), and definitely many were the adventurous souls that saw this as an upcoming major opportunity and, most importantly, one here to stay. With everyone wanting to get their share of the pie, competing in the digital fitness space becomes a fiercer game by the day.
Fierce or not, today digital fitness is an “In or Out” and fitness players of different natures have made the choice to survive. The question is how many will thrive.
Are mixed models the solution to the enigma or just health clubs’ wishful thinking?
With the accelerated move from fitness suppliers towards digital a reality, the outstanding question remains what fitness individual’s preferences will be in terms of online vs. offline fitness routines, when health clubs recover full operational normalcy.
Health club industry key stakeholders have made their bet: Equinox Executive Chairman suggested that “the future is going to be more about marrying the online and offline together, […]3” and industry trend references “expect a blurring of boundaries between in-home and gym-based exercise, as consumers continue to adopt a more portfolio-based approach to their exercise regimes […]4.
Mixed models are surely a sensible prediction but, where are the boundaries that define these to-be mixed models? What will the share of in-person training be in these models and, most importantly, how much will individuals be willing to pay after realizing they can “fit for free”?
The role of in-person training in mixed models relies on a combination of time and the ability of health clubs to integrate in-person training in a way that builds onto the convenience and cost effectiveness that individuals already take for granted and will not be willing to give up when clubs are fully operational.
Time is of essence. As people invest further in home-gyms, digital becomes more affordable and progress is made in what health clubs believe to be the basis of their competitive edge – community feeling – the switching costs rise and the reasons to return become increasingly blurry.
1. Carmen Ang, 2020, “The Growth of Home Fitness Apps”, Visual Capitalist,viewed 27 October 2020, <https://www.visualcapitalist.com/the-growth-of-home-fitness-apps-2020/>
2. Willem Roper, 2020, “Peloton Sales Double During Pandemic”, Statista, viewed 27 October 2020, https://www.statista.com/chart/22836/peloton-annual-sales/
3. Sara Dramer, 2020, “Equinox Executive Chairman: The future of fitness will be ‘about marrying the online and offline’”, yahoo!finance, viewed 27 October 2020, < https://finance.yahoo.com/news/equinox-executive-chairman-the-future-future-of-fitness-will-be-about-marrying-the-online-and-offline-132202427.html>
4. HCM Handbook 2019, 2019, The essential resource for health and fitness professionals, pp. 19