The exercise industry has been shaken up over the last 12 months leaving us with a fascinating blend of competition. Take an increasing use of technology in the industry and changing consumer behaviour catalyzed by lockdown as our key ingredients for disruption, and we are left with a fiercely competitive outlook for the future.

Let’s start with the consumer. While lockdown restrictions have forced brands to adapt their offering, it has also forced consumers to quicken their pace of adoption accordingly.

Consumers who rejected the idea of home workouts have had their barriers involuntarily removed only to find it isn’t all that bad. Benefits have surfaced. Increased flexibility and comfort with the at-home showering amenities are fine but there is a larger, more frightening benefit realization for the exercise industry incumbents. Technology has enabled at-home workouts to be as tough and grueling as they were previously perceived only possible at a gym or studio.

The obvious case study for this is Peloton. The at-home fitness brand that sells exercise bikes or treadmills with a monthly subscription fee enabling you to join virtual classes with a live instructor. This last bit is key; technology allows us to be better connected. Through this connection, the user is held accountable to work hard. Whether it is through a sense of community or competition, one of the key drivers for studio classes has been replicated.

Brands are now able to avoid high fixed costs of rent and maintenance previously seen as barriers to entry. They’ve identified another passage into the industry using tech causing a flurry of new entrants. What Peloton is to the tried and tested spinning class, Fight Camp hopes to be for the tried and tested boxercise class? Each has its own close competition. Zwift goes after the more serious at-home cyclist and Punchlab is offering a similar at-home service to Fight Camp without the need to purchase as much equipment.

What does this change in landscape mean for the incumbents? Traditional gyms have had to be agile. Instead of simply pausing memberships over lockdown, many have developed capabilities to serve the at-home consumer. GymBox has created an alternative membership focusing solely on at-home workouts. A quick glance on Psycle’s website and you are directed initially to their at-home proposition before searching for their physical studios.

This leaves us with questions about the future of the industry that need answers. Is this convergence between digital and physical temporary? For example, how heavily will GymBox push their at-home package once their facilities re-open? Conversely, will we see a world where Peloton diversifies into physical studios? Is it now essential for the traditional exercise brand models to have an alternative offer enabled by technology? How long can the new entrants hold on to their technological competitive advantage?

Perhaps a more essential question is whether these different players are even fighting on the same battleground for the same consumer. Data from my Strava activity history confirms my engagement with the app. This followed the exact pattern of lockdown 1.0 and 2.0 in the UK last year before I ditched the app and took myself back to the gym. Are we experiencing a bout of Stockholm syndrome and the barriers to at-home workouts will snap back as soon as the previous routine becomes available? If each approach fulfills a different set of needs then the competitive space is wide open.

The increasing use of tech in the exercise industry has opened opportunities for new brands while creating challenges for existing and slower-to-react brands. Lockdown restrictions have opened the eyes of consumers to alternatives. How brands act now could have a lasting effect on their position in the new-look, crowded category of the future.

Categories: Tech & Content, Health

BY ENGINEER Nick Campbell

nick.campbell@thevalueengineers.com