Fortune 100 VP | Silicon Valley Executive | Founder of BestBox.co | Growth Advisor | Author of The Digital Intrapreneur | CoachTony.ca
The way most people were exposed to or became involved in fitness in the past was pretty cut and dry. Physical gyms and classes were the primary drivers of the industry. Sure, there were niche apps and home programs that worked for some, but arguably only a fraction. In light of the Covid-19 pandemic, however, I believe the industry has changed not only significantly but permanently.
Earlier this year, I wrote an article titled “Putting Your Fitness Business On The Digital Road Map,” and over the last six months, there has been a veritable explosion of digital growth in this sector. From banner brands all the way down to small-town gyms, fitness professionals have had to get smarter and more agile to deliver the kind of digital fitness experience consumers are demanding during this unprecedented time in our global history.
Big Players Making Moves In The Digital Fitness Market
The way I see it, there is no bigger signal of this seismic shift than a company like Apple entering the marketplace. Apple is one of the largest companies in the world, and it carries on its back a metric ton of consumer influence, choice and perception. The company recently launched its virtual fitness application, Apple Fitness+, available on the Apple Watch and iPad products.
In a similar vein, Lululemon — a company that has largely operated as a clothing business — recently purchased the at-home fitness company Mirror, which sells smart mirrors that stream home workout classes. The company has already upped its projections for Mirror’s profits in this fiscal year, from $100 million to $150 million.
Spin giant Peloton has seen sales explode in the fourth quarter, 172% over last year, with subscriber numbers up 113%. Demand for at-home and digital-ready fitness is high, and its supply chain is struggling to keep up. When companies of this size are driving digital innovation at this level, it’s a clear signal that we’ve crossed into new territory.
Spikes In Mergers And Acquisitions
Anytime we see increased activity around mergers or acquisitions in an industry, it’s a sign that things are shifting. Perhaps it is consolidation because everyone is running out of money. Or, more likely to be the case right now, it’s the breakneck speed of growth — everyone is buying each other up in the hopes of being the one to lead the pack.
In 2019, Mindbody, a technology platform for health and fitness companies, was acquired for just under $2 billion. And earlier this year, Eric Roza, a tech entrepreneur with extensive experience in the software and digital space, acquired CrossFit. I believe this acquisition will bring a renewed focus on increasing digital developments in a company that was already trending up before the pandemic began.
Another company in this space, Zwift, allows runners and bikers to exercise in a simulated 3D world via its online indoor training app. The company recently landed $450 million for its next round of funding. Needless to say, there is a lot of money going around in the digital fitness space right now.
What Comes Next For Digital Fitness?
Observing big transitions like this makes me think about where I’ve seen these trends before. My background in e-commerce has allowed me to spot a synergy between the way consumers demanded changes to their shopping experience and the way they’re now expecting fitness to be delivered to them.
In today’s remote world, there is a wide spectrum of people looking into fitness, and it seems they’re all looking for something different. Many still want a physical option to be available to them. (Commitment to that is contingent, of course, upon people’s specific life situations and the status of the virus rates in their area.) Some are likely anxious and uncertain, so they may prefer to work out only at home. Others fall somewhere in the middle.
These circumstances are very similar to when consumers began demanding omnichannel e-commerce options. There will always be some loyalty to certain apps or brands if they’re important to the consumer or a key part of their day, but otherwise, I find that the biggest demand is for convenience.
Convenience can take many forms, from accessibility to variety. People can afford to be fickle about how they want to access and buy their fitness these days. As a result, they’re driving the market to create innovative new options.
If you’re a fitness professional looking to adapt to this new wave of digitization, there are a few paths you can explore. If you have physical space, strongly consider re-optimizing it for your virtual services in ways like removing areas that are going unused due to health restrictions.
Ultimately, you need to ask yourself what the simplest way is that you can become digital. Can you run one class but have some people in the gym and some people virtual? Can you pre-record workouts and schedule them in advance to send out to clients?
How can you adjust priorities, tactics or even talent to better meet the needs of the new digital world of fitness?
Consumers want their workouts in gyms and at home, on their phones and their tablets, and on demand — whenever, wherever. Fitness has gone digital, and there’s no going back. You’ve got behemoths like Apple competing with established brands like Peloton as well as scrappy new startups and local mom-and-pop gyms down the street. The whole market has shifted massively, and the power lies in the hands of the consumer.
In part two, I’ll talk about the shifting nature of the fitness consumer base and how companies can tailor their offerings to best appeal to this new customer segment.
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