Jonathan Machado

28 September 2020

5 min read

The COVID-19 pandemic has transformed every aspect of our lives, forcing tens of millions who once regularly hit the gym to rethink how they work out.

Sheltering at home has been a boon for at-home smart fitness solutions like Peloton, Mirror, and Tonal — Peloton saw sales surge 172 percent during its fourth quarter — but should those same companies brace themselves for increased user churn and decreased engagement once it’s generally safe for people to return to their favorite studios or gyms?

Let’s analyze the offline fitness world to see if we can answer this question.

The offline fitness market is a very distributed network, with dozens of gyms sprawled across every city. The total addressable market of each branch is typically the population working or living in a 5-minute radius from the gym.

There is a psychological barrier to overcome, because the further away a gym is, the less likely someone is to go. You may really like one particular fitness studio in San Francisco, for instance, but if it’s all the way across the city, you’re probably not going to visit it very often.

Also, unlike online streaming or gaming, where users subscribe to multiple services like Netflix, Amazon Prime, and others, in the offline fitness world consumers are likely to coalesce around one particular gym.

The pandemic obviously upended that whole dynamic, driving many people instead to work out at home and rely on streamed classes and at-home equipment to meet their fitness goals.

But what will the smart fitness landscape look like when the pandemic eventually ends and the world returns to something resembling some kind of “normal”? Will users drop their fitness apps and go back to their local gym? Will they willingly give up the benefits of the on-demand, always available, rich content experiences that digital fitness allows for?

I estimate that similar to other tech “revolutions,” we’ll end up with a hybrid model that is a mix of online and offline fitness options. While I expect a certain level of consolidation to occur in the smart fitness world, I do believe that unless companies in the space prepare for the post-pandemic era, most will experience significant churn.

Here are a few ideas of what they can do about it.

Celebrity collaborations

Bringing in top-notch trainers or celebrities to record classes, for instance, could help build value and market share. In sportswear, partnerships with celebrities and well-known, celebrated athletes are nothing new — Nike has lifetime deals with Cristiano Ronaldo, LeBron James and Michael Jordan; Adidas partnered with Beyoncé to release her athleisure line — but such deals would be largely uncharted territory in the smart fitness world.

But imagine if Jennifer Lopez taught a limited series of full-body strength classes exclusively on one app or if Peter Sagan, one of cycling’s greatest talents at the moment, taught a string of at-home spin classes.

Increased gamification

Introducing gamification features to make fitness addicting — features that extract the essence of the gaming world and offer users virtual or physical rewards — for accomplishing certain tasks could help convert users, too. Studies have shown that not only can gamification features be motivational, but they also positively affect “competence satisfaction,” the feelings of effectiveness you experience that results from accomplishing a task. Building compelling gamification features into an app improves the experience, making the app more of a potentially more attractive draw to possible new users but also increasing stickiness and enjoyment of the app experience among existing ones.

To be fair, some fitness apps and smart gear already do that — a virtual badge for beating a personal workout record, an email for hitting 150 bike rides, or a smartwatch animation for reaching your daily number of steps — but those rewards are rudimentary and superficial at best, and not at all that meaningful. Instead, imagine companies dangling prizes like discounts on gym memberships and free studios classes, gear and apparel for accomplishing different fitness tasks. Wouldn’t those rewards incentivize you to work out that much harder?

Bundle online-offline experiences

Large tech players bundling fitness options with other products and services already do a pretty good job of tracking workouts, but those experiences fail to capture the entire fitness experience, which users value. In fact, 75% of U.S. consumers said in 2018 that technology was important in managing their health, and the global mobile health market is expected to grow at a CAGR of 36.5% between now and 2022.

One scenario that could play out: a hybrid model combining offline and online, where apps track users’ workouts at home and at the gym to offer a more holistic picture of their fitness routine. In theory, apps could track workouts where a user began spinning at home but used weights, gym balls, or stations at the gym. And gyms could potentially capitalize on this by partnering with app makers, so users who participate in this new hybrid model receive discounts.

Ultimately, when the pandemic finally lifts, at-home fitness companies will be forced to adapt as consumers spend more time once again outside their homes. But all this adaptation will also drive innovation within the larger fitness space, as both offline and online players offer experiences that bridge their homes and the outside world. For fitness enthusiasts, that’s a win-win.

COVID-19 may have created a new opportunity for smart fitness startups, but it will not be with us forever. In order for them to fully capitalize on this opportunity, they need to start building now for a sustainable future.

Header image by Risen Wang on Unsplash