The 3 Biggest Questions Facing the Fitness Industry
With gyms re-opening, there are new questions about where and how consumers choose to work out.
Many credit Jack LaLanne as the godfather of modern fitness. Although he invented some of the machines in use today in commercial gyms, he is best known for his television show that taught people how to exercise at home during its 35-year run.
Since then, the number and type of gyms have taken off. Some were gritty and catered to the hard core. Some were luxurious, with latte bars, boutiques and childcare. Regardless of what you were looking for, there was a gym for you.
Then came Covid-19, and millions of people went back to working out at home, a la LaLanne. The transition happened so suddenly, in fact, that news reports warned of a kettlebell shortage. The market responded and, as if overnight, a new generation of at-home equipment and programs appeared.
Now, with gyms re-opening, there are new questions about where and how consumers will choose to work out. People who never imagined working remotely quickly learned that they actually preferred it. Could the same thing happen with their workouts?
Who will survive in a market in which consumers have more and different choices?
Competition has always been fierce in the fitness industry. However, in the past, gyms competed with gyms. Treadmills, stationary bikes and NordicTracks competed with one another for share of wallet. However, the recent rise of increasingly sophisticated at home equipment — and people's willingness to shell out serious money for it — have changed the dynamic completely.
Peloton, Tonal, Concept2, CLMBR, among others, can all give you a great workout in the comfort of your own home. Some of the connected machines can even simulate the class experience. Will people who invest in one of these machines feel the need to make the same financial or time commitment to a gym that they did pre-pandemic?
Two can play that game. After they watched membership decline during Covid, many brick and mortar gyms began offering virtual options, as well. According to one industry trade group, 72% of fitness clubs now offer on-demand and livestream group workouts. This is up from 25% in 2019.
Will consumers want to mix it up?
For many, the gym was more than a place just to work out. It also provided motivation, sensory stimulation and social interaction.
So, yes, you could burn lots of calories on the expensive water rower. It might even look cool in the bedroom or home gym. But the appeal of going to group fitness classes or working out with a gym buddy — now that we once again can — may be too much to resist. Like the hybrid work environment, the hybrid workout arrangement might be the best of all worlds.
What can we learn from Peloton?
Through much of the pandemic, Peloton was at the top of the at-home fitness industry. However, their sales plateaued, and their aggressive growth goals became increasingly out of touch with the market. As a result, their CEO stepped down, thousands of employees were let go and their stocks hit new lows.
To some extent, this was a problem of their own making. Peloton doubled down on their luxury strategy and seemingly overestimated their ability to grow beyond their cult following, rather than adapting to the increasingly competitive market. To be sure, Peloton had other problems, such as faulty treadmills and supply chain nightmares. But the company's fall from grace is not lost on others in the market.
Here's what we know for sure: We may not know the fate of the industry for some time. Every year, gyms sell 12% of their memberships in January. By the end of the month, half of those new memberships are going unused.
Related: The At-Home Fitness Boom
In other words, when it comes to fitness, consumer needs, desires and "sticktoitiveness" tends to wane over time. As gyms and home equipment makers wrestle for market share, it may take some time for this to shake out.
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